Gore-Tex Patents and Its Success - Essay Example

1. At the end of the patent protection phase the best strategy is to increase R&D investment as well as reposition the product whose patent is expiring at a lower price point to continue to generate sales.

2. The fabric technology of the firm has been utilized in a wide range of products. The company has applications for winter coats, backpacks, shoes, and trousers. The firm has been able to obtain prestigious contracts such as the 1969 contract that enabled the company to manufacture cables to reach outer space US-led moon missions. The firm has a diversified product portfolio with multiple applications which include: new standards for comfort and protection for work wear and active gear; advanced science of regenerating issues destroyed by disease or traumatic injuries; next-generation materials for printed circuit boards and fiber optics; and new methods to detect and control environmental pollution.

3. The emphasis on technology and innovation has helped Gore become a multinational firm whose market value exceeds one billion dollars. Despite the company’s success, the continuous emphasis on technology is a strategy that has drawbacks and increases overall business risk. Once the patent of technology expires any firm can imitate the company’s product without incurring in any of the original research and development investment the firm incurred in. Another major drawback of placing a high emphasis on technology is that these types of products at times become obsolete very fast as other more advanced technologies begin to appear in the marketplace. When a company becomes a victim of obsolete technology all the inventory of the product that became obsolete becomes worthless.

4. Companies that utilize compensation plans in which the employees become part of the ownership group through stock option plans are business entities in which the human capital of the firm is more likely to show greater loyalty which leads to lower employee turnover and higher retention rates. The employees realized when they are paid in stocks that their efforts have a direct correlation with the value of their equity investment. Since this particular firm, Gore-Tex, is a privately held company the stocks of the firm are not as liquid, thus the employee might have some difficulty selling them in the open marketplace. Also as times move forward and more new employees and the current employees continue to receive compensation in the form of equity stocks the value of these stocks might get diluted which means that the employee will own more stocks that are worth less money. Read More