The Commodity Battle: A product-market perspective on innovation resource allocation in the Process Industries

Companies in the Process Industries often try to avoid being commodity producers and strive to develop more functional products with higher profit margins. When such products are introduced on the market, they are usually imitated before long. Prices then decline, and the products degenerate in a never-ending product contest conceptualised as the Commodity Battle. The company's position in the supply-chain has been used as a point of departure, and four related matrices have been designed as roadmaps for guiding strategic allocation of resources to innovation. The framework and the empirical findings give theoretical insight, and can already be deployed as one tool for innovation resource allocation. Copyright © 2010 Inderscience Enterprises Ltd.