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Technological innovation strategy and building up sustained competitive advantages in the brazilian emerging cellular telephone market
Unformatted Document Text:  4 The concept of innovation is also related to new and better products, according to Sheth et al. (2001): Innovation is any idea or product perceived by its potential consumer as being new. In the same manner, Chandy & Tellis (1998) define innovation as the capability a firm exhibits to create new products that embody different technologies, which are able to satisfy essential consumer needs in a more efficient way than the existing products. Liao & Chiang (2005) define innovation as the creation of a new product, service or process that includes a sequence of events through time, involving all possible activities, from product development, industrial production to product sales. Afuah (1998) characterizes innovation as the use of new technological knowledge or new market knowledge to offer a new product to the customers. This author classifies a product as new when: (1) the cost is low (2) its attributes are improved (3) it now has new attributes it never had before or it never existed in the market before. Often the new product or service itself is called an innovation, reflecting the fact that it is the creation of new technological or market knowledge. Figure 1 exhibits how new knowledge (technological or market) can develop competences and endowments in the company’s resources, originating organizational and economic implications, before obtaining a new product (low-cost, improved or new attributes). Figure 1. Innovation: organizational and economic implications.Source: Afuah (1998) Drucker (1998) points out the existence of direct and indirect sources of innovation. He defines indirect sources as demographic changes, changes in the perception and new knowledge; direct sources are the unexpected events, inconsistencies, process needs and market or industry changes. Furthermore, Afuah (1998) classifies the sources of innovation in two types: NEW TECHNOLOGICAL KNOWLEDGE NEW MARKET KNOWLEDGE COMPETENCES AND ENDOWMENTS NEW PRODUCT • Low-cost • Improved attributes • New attributes Organizational implications Economic implications

Authors: LEX, SERGIO., Zilber, Moisés. and Sellmann, Maria.
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The concept of innovation is also related to new and better products, according to Sheth  et al.  (2001): 
Innovation is any idea or product perceived by its potential consumer as being new. In the same manner, Chandy & 
Tellis (1998) define innovation as  the capability a firm  exhibits to create new products that  embody different 
technologies, which are able to satisfy essential consumer needs in a more efficient way than the existing products. 
Liao & Chiang (2005) define innovation as  the creation of a new product, service  or process  that  includes  a 
sequence of events through time, involving all possible activities, from product development, industrial production 
to product sales.
Afuah  (1998)   characterizes   innovation   as   the   use   of   new   technological   knowledge   or   new   market 
knowledge to offer a new product to the customers. This author classifies a product as new when: (1) the cost is low 
(2) its attributes are improved (3) it now has new attributes it never had before or it never existed in the market 
before. Often the new product or service itself is called an innovation, reflecting the fact that it is the creation of new 
technological or market knowledge. Figure 1 exhibits how new knowledge (technological or market) can develop 
competences and endowments in the company’s resources, originating organizational and economic implications, 
before obtaining a new product (low-cost, improved or new attributes).
Figure 1. Innovation: organizational and economic implications.
Source: Afuah (1998)
Drucker (1998) points out the existence of direct and indirect sources of innovation. He defines indirect 
sources as demographic changes, changes in the perception and new knowledge; direct sources are the unexpected 
events, inconsistencies, process needs and market or industry changes. Furthermore, Afuah (1998) classifies the 
sources of innovation in two types:
NEW 
TECHNOLOGICAL 
KNOWLEDGE
NEW
MARKET 
KNOWLEDGE
COMPETENCES 
AND 
ENDOWMENTS
NEW PRODUCT
•
Low-cost
•
Improved 
attributes
•
New attributes
Organizational implications
Economic implications


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