The Renewal Process And Obstacles to Innovation

Cover The Renewal Process And Obstacles to Innovation
The Renewal Process And Obstacles to Innovation
Zenon S Zannetos
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The net effect is a reduction of the manufacturing cost of the product.
There is invariably a basic conflict in process innovation in that specialization is achieved at the expense of flexibility and independence. Heavy investment of time and money normally creates "fixities" and huge facilities which cause technical and technological interdependences among the products and services using the facilities, at any moment in time and over the economic life- time of the facilities. So a miscalculati
...on on the high side may result in a lower product cost at the beginning, but may inhibit the adoption of new process technology later on when it becomes -8- available. Also it may, as I will soon argue, get the firm locked in to an obsolete product. Underinvestment, on the other hand, may affect the initial profitability of the firm and erode some of its competitive advantage.
A synchronization of the product life cycle and that of the process technology is imperative. Unfortunately, within many firms these two classes of decision, product and process innovation, are usually made independently and serially.


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