Technology and Innovation Strategy

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Pages: 13

Category: Business and Industry

Date Submitted: 10/29/2011 05:55 AM

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1. Introduction

The concept of a business model facilitates the discussion of the way in which a newly innovative technology can bring a firm economic value. There are considerable academic research has been devoted to scoping the business concept, and most of them include the rationale of how an organization creates, delivers, and captures value (Osterwalder, 2009), According to Chesbrough and Rosenbloom (2002), the success of the commercialization of new technology largely depends on the business model adopted more than the technology itself. They also suggest the business model of an innovation is the construct that mediates the value creation process between the technical and economic domain. As shown in Figure 1:

Technological characteristics & potential Economic output

Figure 1. The role of the business model

The purpose of this paper is to use the Chesbrough Rosenbloom approach (2002) to analyse the business model of a recognized innovation--Radio Frequency Identification (RFID). A RFID business model framework will be first described. In order to assess whether or not the proposed business model is a good model, a Wal-Mart case will be used as criteria to test the theriacal relevance behind this model. The final part discusses on how the business model should be changed and business model innovation for future improvement.


Radio frequency identification technology has moved into mainstream applications that help speed and handling of manufacturing goods and materials (Want, 2006). It enables identification from a distance without requiring a line of sight. RFID tags support can discern many different tags located in the same general area without human intervention. RFID is more expensive than traditional labeling technologies, however; it does offer superior value and is now be viewed as a critical price point that...