Question

Briefly discuss the reason why firms can still benefit from their innovation despite imitation by other rival firms?

Answer 1

A firm's innovative capacity reflects the efficiency of its scientifict team and the general ability of a firm's R&D department to create new technologies. To develop a sustainable competitive advantage, firms must sure that they create new technologies and products more rapidly than do their rivals. Although this innovation may still contribute to the firm's efficiency. The rate of knowledge diffusion is important because it determines the extent to which, as well as for how long, a firm can captire the value of its innovation. Firms can often block imitations by using patents, company reputations, brand names etc. The innovation leads to create a trustability about the efficiency of a company. The full profit of resulting an innvoating technlogy received by the firm fully. Technology innovation also creates firm as a market leader, and imitations of other firms make them follower. So innovation despite imitation is important in reflecting the company's efficiency, customer's trustability and mainly the profit for being a market leader.