Firms accumulate knowledge through product development activities such as efficient product design, various experimental data, and know-how of project management. By exploiting this knowledge, firms are able to improve product quality, reduce cost, and shorten the development lead time. The more firms accumulate knowledge, the more they are able to gain competitiveness by exploiting their knowledge. However, because of efficiency gained by exploitation, firms can sometimes excessively exploit their knowledge, thus making their products too similar to and less attractive than earlier products and, as a result, lose competitiveness. In this paper, we employ a time series analysis to show that excess exploitation of know-how reduced product creativity in the Japanese video game industry.
International standardization has become a strategic tool for global firms since new industrial policies emerged in developed countries in the 1980s, which allow firms to easily form a consortium to set industry-wide standards. This standardization has created many consensus standards that change the distribution of added value internationally, and has induced transformation in the international division of labor among the developed and developing countries. Platform business is most eminent in the resulting business ecosystem. It harnesses consensus standards to earn global competitive advantages, based on two practices: adjusting the scope of their knowledge and selecting new business partners who adopt the standards.
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