. The LAW is often not the best defense against theft of intellectual property. Far more effective in such cases are MARKET-BASED strategies that KEEP PIRATES IN PORT.

from defending their core assets to embracing the businesses that threaten those assets. Market Strategies ? ? ? ? ? ? Defend Core Assets Embrace the Threats . Companies facing threats to their intellectual property have a range of alternatives. The choice of strategies – and tactics to support them – depends on the nature and intensity of the threat and the strength of a company’s resources.

Nip It in the bud Defend Core Assets Market Strategies Embrace the Threats 1   “ Act Before Competitors . overwhelms its rivals with a blizzard of new product KEEP THEIR INTELLECTUAL PROPERTY OUT OF SIGHT FROM THE START : For companies that lack Intel’s or Capital One’s resources and core strengths .Capital One. So Catch Their Breath ! ” PREEMPING / OVERWHELMING / EXCLUDING PREEMPTION : Being first to market so that you can capture profit of monopoly scale. and Suppliers) OVERWHELMING: . .Intel preempts rivals by tightly managing its relationships with external constituencies( Customers. Users.1.Coke’s recipe has never been deconstructed or revealed  . the credit card issuer.

.“SEDATING” EFFECT on an underground market in weakly protected intellectual property. Companies do not sue one another for infringement because they know they are likely to infringe the infringer’s patents sometime in the future.2. Prescribe a Sedative Defend Core Assets Market Strategies Embrace the Threats 2  “ Lower The Competitive Intensity ” THREATEN TO RETALIATE CROSS-LICENSING AGREEMENTS: .

. Dig a Honey Pit Defend Core Assets Market Strategies Embrace the Threats 3  “ Entangle Key Assets ” FORGING SYNERGIES CREATE SYNERGIES AMONG RELATED BUSINESSES: Company’s economic viability is usually tied to one or a few key properties.3. . By forging synergies between such properties and adjacent ones company can protect its profits from rivals and poachers.Hit television shows leads audiences to the next program and CROSS PROMOTE other shows on the same network.

Excel. .In the book industry. Word ( stand alone software applications )can be easily copied and disseminated. but the Microsoft itself enhances the value of the package so it makes more likely that a would-be copyist will pay for it. It can be wise to marry that asset to a complementary product.4.  . . ADD-ONS : Provides additional functions or customization for a core application. Make a Bundle Defend Core Assets Market Strategies “ Combine Secure with Insecure Products” MARRY ASSETS / ADD-ONS  Embrace the Threats 4 MARRY ASSETS: (Enhanced value of the package ) In situations where it’s difficult to establish property rights to an asset. publishers sometimes insert a CD or sort of things in t he back cover of their books.

. blank CDs. For example. and portable MP3 players. . Move the Goalposts Defend Core Assets Market Strategies Embrace the Threats “ Redefine the Firm’s Boundaries ” EXPANDING / NARROWING 5  REDEFINE BOUNDARIES: Challenge for companies how to get a piece of COMPLEMENTS.5. not all music-related businesses are vulnerable. computers with a CD burner .Unlike the increasing piracy rates in music industry.

Let the Dogs Out Defend Core Assets Market Strategies “ Relinquish Your Core Assets ” MOVE THE GOALPOSTS. It may pay to disregard the decline in their core. Apple wasn’t afraid to set prices low enough to change music –buying ha bits. By contrast. even though the costs of online delivery are minimal. . then“ REALLOCATION ” Embrace the Threats 6  REALLOCATE RESOURCES TO ADJACENT BUSINESSES: For companies that have moved the goalposts and now encompass more viable businesses. they tried to charge as much for downloads as they did for CDS. .Several of music companies viewed the online customer as a threat.6.

Market Strategies In the Bud NIP IT 1 Prescribe Sedative 2 HONEY PIT 3 DIG Make BUNDLE 4 Goalposts Move 5 DOGS OUT Let the 6 Preempt Deny access Outinnovation Threaten To retaliate Create Synergies Marry assets To complementary products ( Among related businesses ) Preserve The core with Reallocate Resources to Narrow your Adjacent Own business businesses Expand into rivals’ businesses Add-ons .

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