Diffusing knowledge-based core competencies for leveraging innovation strategies: Modelling outsourcing to knowledge process organizations (KPOs) in pharmaceutical networks

Samir Gupta, Arch Woodside, Chris Dubelaar, Don Bradmore

Research output: Contribution to journalArticleResearchpeer-review

42 Citations (Scopus)

Abstract

As pharmaceutical firms try to market their products and reduce costs, vertically integrated structures hamper innovation processes. Yet, pharmaceutical firms must innovate to compete. Outsourcing knowledge intensive activities to knowledge process organizations (KPOs) serves to reduce innovation process obstacles. Grounded in diffusion theory and strategic management literature, this conceptual paper explores four interrelated strategic concepts: core competencies, economies of scale and scope, knowledge sharing, and learning. This paper claims that (a) accumulated core competencies of multinational pharmaceutical companies (MPCs) erode over time and these companies become dependent on KPOs (b) MPCs must understand how KPOs manage core competencies (c) economies of scope benefit KPOs enabling them to sustain competitive advantages for their MPC partners, meanwhile the benefits from economies of both scale and scope shift from MPCs to KPOs (d) KPOs need to monitor their rate of learning to remain competitive. The paper identifies implications for industrial managers and directions for future research.

Original languageEnglish
Pages (from-to)219-227
Number of pages9
JournalIndustrial Marketing Management
Volume38
Issue number2
DOIs
Publication statusPublished - Feb 2009
Externally publishedYes

Fingerprint

Knowledge processes
Modeling
Knowledge-based
Outsourcing
Core competencies
Innovation strategy
Pharmaceuticals
Multinationals
Innovation process
Economies of scale and scope
Managers
Knowledge sharing
Diffusion theory
Economies of scope
Costs
Strategic management
Competitive advantage
Integrated
Product market

Cite this

@article{4dceff50975e4dfbba3e5b101ee59e23,
title = "Diffusing knowledge-based core competencies for leveraging innovation strategies: Modelling outsourcing to knowledge process organizations (KPOs) in pharmaceutical networks",
abstract = "As pharmaceutical firms try to market their products and reduce costs, vertically integrated structures hamper innovation processes. Yet, pharmaceutical firms must innovate to compete. Outsourcing knowledge intensive activities to knowledge process organizations (KPOs) serves to reduce innovation process obstacles. Grounded in diffusion theory and strategic management literature, this conceptual paper explores four interrelated strategic concepts: core competencies, economies of scale and scope, knowledge sharing, and learning. This paper claims that (a) accumulated core competencies of multinational pharmaceutical companies (MPCs) erode over time and these companies become dependent on KPOs (b) MPCs must understand how KPOs manage core competencies (c) economies of scope benefit KPOs enabling them to sustain competitive advantages for their MPC partners, meanwhile the benefits from economies of both scale and scope shift from MPCs to KPOs (d) KPOs need to monitor their rate of learning to remain competitive. The paper identifies implications for industrial managers and directions for future research.",
author = "Samir Gupta and Arch Woodside and Chris Dubelaar and Don Bradmore",
year = "2009",
month = "2",
doi = "10.1016/j.indmarman.2008.12.010",
language = "English",
volume = "38",
pages = "219--227",
journal = "Industrial Marketing Management",
issn = "0019-8501",
publisher = "Elsevier",
number = "2",

}

Diffusing knowledge-based core competencies for leveraging innovation strategies : Modelling outsourcing to knowledge process organizations (KPOs) in pharmaceutical networks. / Gupta, Samir; Woodside, Arch; Dubelaar, Chris; Bradmore, Don.

In: Industrial Marketing Management, Vol. 38, No. 2, 02.2009, p. 219-227.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - Diffusing knowledge-based core competencies for leveraging innovation strategies

T2 - Modelling outsourcing to knowledge process organizations (KPOs) in pharmaceutical networks

AU - Gupta, Samir

AU - Woodside, Arch

AU - Dubelaar, Chris

AU - Bradmore, Don

PY - 2009/2

Y1 - 2009/2

N2 - As pharmaceutical firms try to market their products and reduce costs, vertically integrated structures hamper innovation processes. Yet, pharmaceutical firms must innovate to compete. Outsourcing knowledge intensive activities to knowledge process organizations (KPOs) serves to reduce innovation process obstacles. Grounded in diffusion theory and strategic management literature, this conceptual paper explores four interrelated strategic concepts: core competencies, economies of scale and scope, knowledge sharing, and learning. This paper claims that (a) accumulated core competencies of multinational pharmaceutical companies (MPCs) erode over time and these companies become dependent on KPOs (b) MPCs must understand how KPOs manage core competencies (c) economies of scope benefit KPOs enabling them to sustain competitive advantages for their MPC partners, meanwhile the benefits from economies of both scale and scope shift from MPCs to KPOs (d) KPOs need to monitor their rate of learning to remain competitive. The paper identifies implications for industrial managers and directions for future research.

AB - As pharmaceutical firms try to market their products and reduce costs, vertically integrated structures hamper innovation processes. Yet, pharmaceutical firms must innovate to compete. Outsourcing knowledge intensive activities to knowledge process organizations (KPOs) serves to reduce innovation process obstacles. Grounded in diffusion theory and strategic management literature, this conceptual paper explores four interrelated strategic concepts: core competencies, economies of scale and scope, knowledge sharing, and learning. This paper claims that (a) accumulated core competencies of multinational pharmaceutical companies (MPCs) erode over time and these companies become dependent on KPOs (b) MPCs must understand how KPOs manage core competencies (c) economies of scope benefit KPOs enabling them to sustain competitive advantages for their MPC partners, meanwhile the benefits from economies of both scale and scope shift from MPCs to KPOs (d) KPOs need to monitor their rate of learning to remain competitive. The paper identifies implications for industrial managers and directions for future research.

UR - http://www.scopus.com/inward/record.url?scp=61649096360&partnerID=8YFLogxK

U2 - 10.1016/j.indmarman.2008.12.010

DO - 10.1016/j.indmarman.2008.12.010

M3 - Article

VL - 38

SP - 219

EP - 227

JO - Industrial Marketing Management

JF - Industrial Marketing Management

SN - 0019-8501

IS - 2

ER -