LESSONS IN PRODUCT INNOVATION - A CASE-STUDY OF BIOTECHNOLOGY FIRMS

Firms that are able more quickly than others to add value through prod uct development will be the winners in technology-based industries. Th is paper examines value-added progress by contrasting four agricultura l biotechnology firms that have managed to create value with one that failed to do so. Lessons were induced for new firms struggling to deve lop products in emerging industries such as biotechnology. The followi ng findings emerged from manager interviews and secondary data. In con trast to the 'progressive' firms, the failed firm neglected to develop a clear product-market focus, complementary skills outside its core t echnology, and relationships with universities and government. These c ontrasts seemed to stem from differences in the financing arrangements and the level of organizational politics. The failed firm received a generous one-time funding and had a relatively high lever of politics, whereas the funding of the progressive companies was tied to performa nce milestones and little politicking took place. The reasons for orga nizational politics are discussed.