Generally speaking, the paper "Managing Innovation and Entrepreneurship" is an outstanding example of a management assignment. The notion that barriers to imitation are always needed if you are a good entrepreneur and have the ability to appropriate value from innovation is a statement that I consent with. This is because if imitations are left unchecked without barriers being enforced, the imitators will target the firm’ s customers through strategies such as cutting down costs and offering free products, which may further drive down the firm’ s profits. In the long run, the competitive environment caused by imitators can continue up to a level whereby actually no profits are left for the firm (Baron & Shane, 2005). Barriers to imitation are also essential because they prevent the imitators from trying to obtain the resources required to exploit the firm’ s business ideas.
In many incidences having imitations results in a rise in the cost of resources due to the fact that the demand for the resources becomes high therefore prices for resources are increased by the resource suppliers (Baron & Shane, 2005). And if the prices of resources are increased the aftermath implication is that the profits of the firm will be undermined. Innovations and the Barriers Used Two major broad categories of innovation exist.
One of the innovation types is the incremental innovation which involves improvements that are made on the products, services and processes (including, financial organizational and commercial) of an enterprise. The second category of innovation is the radical innovation which entails coming up with new ideas, new ways of undertaking business and also adopting or developing new technologies. Various types of barriers are used by entrepreneurs to protect the innovations adopted.
One of the barriers adopted by entrepreneurs is that of obtaining control of resources. This particular barrier is applied to incremental innovations such as product innovation. Products are most cases developed from the resource, which are basically tangible. Services on the other hand require intangible resources such as the skills of employees and service lines. In order to develop a barrier against imitation, entrepreneurs have ensured that they gain control over the key resources that are needed to come up with the new product or the service (Baron & Shane, 2005).
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