Sailing a Blue Ocean in Information Technology : High-Value Software Innovation through Willingness to Cannibalize

Building on extant literature in innovation management and marketing, we develop a factor model for explaining firm value innovation from both an industrial and a post-industrial perspective. Our model focuses on value innovation and analyzes it from the aspect of willingness-to-cannibalize affected by firm size and inter-firm linkages. We highlight the mediating role of willingness-to-cannibalize that may reconcile the different views about the roles of firm size and inter-firm linkages in firm-level software innovation portfolio management. We test the model by conducting a survey involving 113 Taiwanese software firms. Our data show a good fit to the model and support all but two of the hypotheses it suggests. The model can explain a significant portion of the variance in value innovation as well as willingness-to-cannibalize. Our findings have several implications for strategic systems portfolio management that we also discuss