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.

Companies facing threats to their intellectual property have a range of alternatives, from defending their core assets to embracing the businesses that threaten those assets. The choice of strategies and tactics to support them depends on the nature and intensity of the threat and the strength of a companys resources. Market Strategies

Defend Core Assets

Embrace the Threats

1. Nip It in the bud

Defend Core Assets Market Strategies Embrace the Threats

Act Before Competitors , So Catch Their Breath !

PREEMPING / OVERWHELMING / EXCLUDING

PREEMPTION : Being first to market so that you can capture profit of monopoly scale. - Intel preempts rivals by tightly managing its relationships with external constituencies( Customers, Users, and Suppliers) OVERWHELMING: - Capital One, the credit card issuer, overwhelms its rivals with a blizzard of new product KEEP THEIR INTELLECTUAL PROPERTY OUT OF SIGHT FROM THE START : For companies that lack Intels or Capital Ones resources and core strengths - Cokes recipe has never been deconstructed or revealed

2. Prescribe a Sedative
Defend Core Assets Market Strategies Embrace the Threats

Lower The Competitive Intensity

THREATEN TO RETALIATE

CROSS-LICENSING AGREEMENTS: - 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 infringers patents sometime in the future.

3. Dig a Honey Pit

Defend Core Assets Market Strategies Embrace the Threats

Entangle Key Assets

FORGING SYNERGIES

CREATE SYNERGIES AMONG RELATED BUSINESSES: Companys economic viability is usually tied to one or a few key properties. 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.

4. Make a Bundle
Defend Core Assets Market Strategies Combine Secure with Insecure Products MARRY ASSETS / ADD-ONS

Embrace the Threats

MARRY ASSETS: (Enhanced value of the package ) In situations where its difficult to establish property rights to an asset, It can be wise to marry that asset to a complementary product. - Excel, 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. ADD-ONS : Provides additional functions or customization for a core application. - In the book industry, publishers sometimes insert a CD or sort of things in t he back cover of their books.

5. Move the Goalposts

Defend Core Assets Market Strategies Embrace the Threats

Redefine the Firms Boundaries

EXPANDING / NARROWING

REDEFINE BOUNDARIES: Challenge for companies how to get a piece of COMPLEMENTS. - Unlike the increasing piracy rates in music industry, not all music-related businesses are vulnerable. For example, blank CDs, computers with a CD burner , and portable MP3 players.

6. Let the Dogs Out

Defend Core Assets Market Strategies Relinquish Your Core Assets MOVE THE GOALPOSTS, then REALLOCATION Embrace the Threats

REALLOCATE RESOURCES TO ADJACENT BUSINESSES: For companies that have moved the goalposts and now encompass more viable businesses. It may pay to disregard the decline in their core. - Several of music companies viewed the online customer as a threat, they tried to charge as much for downloads as they did for CDS, even though the costs of online delivery are minimal. By contrast, Apple wasnt afraid to set prices low enough to change music buying ha bits.

Market Strategies

In the Bud

NIP IT

Prescribe Sedative

HONEY PIT

DIG

Make BUNDLE

Goalposts

Move

DOGS OUT

Let the

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