Schilling-08

Schilling-08 - StrategicManagementof...

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Chapter 8 COLLABORATION  STRATEGIES Strategic Management of  Technological Innovation   Melissa Schilling
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2 Abgenix spent seven years and $40 million to produce a  genetically-engineered mouse that could produce  antibodies that would treat human illnesses. One antibody, ABX-EGF showed great promise for treating  several types of cancer. Abgenix had to decide whether to: License  ABX-EGF to a pharmaceutical company which  would do all further testing and commercialization (bear  little risk and receive license royalties) Use a  joint venture  with a biotechnology company to  complete the testing and commercialization (bear  moderate risk and split profits) Pursue the ABX-EGF project as a  solo venture  (bear  all risks and keep all profits) The XenoMouse
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3 Overview Firms must often choose between performing  innovation activities alone or in collaboration. Collaboration can enable firms to achieve more,  at a faster rate, and at less cost and risk. However, collaboration also entails sharing  control and rewards, and may risk partner  malfeasance. The advantages of going solo are compared with  those of collaborating, and then different forms  of collaboration are compared.   
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4 Reasons for Going Solo Whether a firm chooses to engage in solo development or  collaboration will be influence by: Availability of capabilities  (does firm have needed  capabilities in house? Does a potential partner?) In 1970s Monsanto developed powerful herbicide, but killed 
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Schilling-08 - StrategicManagementof...

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