Aligning technology licensing strategies and business competitiveness: A case of photovoltaic technology firms in India

Geographical position has been identified in strategic management literature as a critical asset. The sub-continental geographical position of India provides it with an estimated annual solar insolation (a measure of solar radiation energy received on a given surface area in a given time) of about 5 trillion kWh. Licensing from international technology leaders has been the traditional technology strategy of Indian firms and expand on it through process innovation in alignment with development needs. The business value thus created is dependent on the efficient use of licensed technological capabilities. In this paper, a framework capturing the relationship between the licensors' technological capabilities and licensees' existing position in the industry value chain is proposed. This helps us to understand how a licensee firm leverages the available technological strength towards its value chain expansion. We measure the value chain competencies through industry value chain and financial analysis and technological competencies through patent proximity method. In this work, we apply this framework to study the efficiency of the Indian photovoltaic technology firms in leveraging its licensing strategy. Such a framework allows firms to identify and align their technology strategies to the potential growth opportunities, be it vertical or horizontal.