過去十年以來，創新管理的新方法已成為許多產業發展的主要驅動力。為了探討汽車廠商產品品質、產品創新與服務創新等議題，本研究試採賽局理論與實質選擇權觀點，分別探討廠商間之競爭策略與消費者之購買決策。並且採用「高品質廠商比較願意從事創新投資」的論點，嘗試論證高品質產品將帶動創新活動。
據此研究目標，本文將創新活動區分為產品創新與服務創新，並以汽車產業為具體例證，分別討論其產品品質對產品創新與服務創新之影響。針對創新與品質之賽局模型推導出創新所需成本為廠商從事創新活動之障礙，此障礙唯於廠商生產高品質產品時可將之克服。再者，另一動態賽局亦指出產品品質與服務創新之間具有非常強固之關聯性。本研究並嘗試以實質選擇權模式評估汽車廠商所採行之服務創新，包括半價保證及延長試駕服務，結果發現有效的服務創新能夠提升消費者購買慾望，進而增加廠商的營收與獲利。本研究亦發現，除了品質之外，消費者對創新產品或服務的偏好程度，亦為創新成功與否之關鍵因素。成功的創新管理有賴企業不斷地創新改良產品，並須持續關注市場狀況，確實掌握消費者需求。
即使不同產業各自的產品創新與服務創新尚未達到普遍一致性，本研究仍強烈支持生產高品質產品之廠商將會在創新活動中非常活躍之論點。從流程管理之論點而言，全面品質管理能夠提昇產品品質，同時可以支持創新管理。

Over the past decade, new approaches to innovation management have become prime drivers of various industries. Considering product quality, product innovation and service innovation in the automotive industry, this study tries to adopt game theory and real option models to analyze competing and consuming behavior among high- quality firms, low-quality firms and rational consumers. With an argument that firms will undertake innovation activities if they produce high-quality products, this study wishes to demonstrate that high quality products will induce both product and service innovations simultaneously.
To achieve the research objective, this study divides innovation into product and service innovations, and then, discusses quality’s impacts on product and service innovations separately. Game theory models concerning quality and product innovation indicate that the fixed cost of innovation, the barrier to a firm’s engaging in innovative activities, is overcome only if a firm produces high-quality products. Moreover, another dynamic game also shows the strong relationship between product quality and service innovation. Applying real options models to evaluate service innovations in the automotive industry, including half-price purchase warranty and extended test drive service, also verify that effective service innovations might increase consumer willing-to-buy and enlarge the sales and profits for the innovative firms. Besides quality, this study also reveals that consumer preference to new product or service is another key successful factor for business innovation management. Successful innovation management depends on continuously improving product and service, concerning the status of expected market, and understanding the needs of potential consumers.
Even though a general consensus on product and service innovations among different industries remains lacking, this study strongly supports the argument that firms producing high-quality products will be active in innovations. From the broader perspective of process management, total quality management, which increases product quality, undoubtedly supports innovation management.

TABLE OF CONTENTS


ABSTRACT………………………………………………………………………… ii
TABLE OF CONTENTS…………………………………………………………… iv
LIST OF TABLES………………………………………………………………….. vi
LIST OF FIGURES………………………………………………………………... vii
CHAPTER 1 INTRODUCTION…………………………………………………….. 1
1.1 Research Background……………………………………………………………. 1
1.2 Research Objectives……………………………………………………………... 3
1.3 Research Boundaries…………………………………………………………….. 4
1.4 Overview of the Research Methodology……………………………………….... 5
1.4.1 Game Theory………………………………………………………………. 5
1.4.2 Real Option Theory………………………………………………………... 5
1.5 Outline of the Dissertation………………………………………………………..6
CHAPTER 2 LITERATURE REVIEW……………………………………………... 8
2.1 Innovation………………………………………………………………………... 8
2.2 Typology of innovation…………………………………………………………... 8
2.3 Service Innovation………………………………………………………………..11
2.4 Product Quality…………………………………………………………………..14
2.5 Product Quality and Innovation Management………………………………….14
2.6 TQM and Innovation Management…………………...………………………….15
2.7 Tools to Evaluate Innovation………………………………………………..……17
2.8 Other Potential Determinants of Innovation………………………………..……18
2.8.1 Individual Influences on Innovation…………………………………..……19
2.8.2 Organizational Influences on Innovation……….…………………………19
2.8.3 Environmental Influences on Innovation……….…………………………20
CHAPTER 3 PRODUCT QUALITY AND PRODUCT INNOVATION:
A GAME THEORY APPROACH……………………………………21
3.1 Basic Model………………………………………………………………………22
3.2 Quality-based Innovation Model…………………………………………………25
3.3 Dynamic Games of the Quality-based Innovation Model………………………..28
3.4 Findings and Discussion…………………………...……………………………..30
CHAPTER 4 PRODUCT QUALITY AND SERVICE INNOVATION:
A GAME THEORY APPROACH……………………………………32
4.1 Service Innovations in the Automotive Industry…………………………………32
4.2 Half-priced Warranties Service…………………………………………………..34
4.3 Basic Model………………………………………………………………………35
4.4 Generalized Model of Durable Products with Half-Price Warranties Service…...38
4.5 Characterization of Equilibrium………………………………………………….48
4.5.1 Full Information Equilibrium………………………………………………48
4.5.2 Incomplete Information Equilibrium……………………………………….50
4.6 Findings and Discussion………………………………………………………….53
CHAPTER 5 AN EMPIRICAL STUDTY: APPLYING OPTIONS TO
EVALUATE SERVICE INNOVATIONS……………………………..55
5.1 Service Innovations in the Automotive Industry…………………………………55
5.1.1 Extended Test Drive Service……………………………………………….56
5.1.2 Sale of Half-priced Warranties……………………………………………..56
5.2 Providing Option-Based Service Innovations……………………………………57
5.2.1 Options-based Valuation of Extended Test Drive Service…………………59
5.2.2 Options-based Valuation of Half-price Purchase Warranties………………60
5.3 Findings and Discussion………………………………………………………….62
CHAPTER 6 CONCLUSIONS AND IMPLICATIONS……………..………...……64
6.1 Conclusions…………..…………………………………………………….…..64
6.2 Management Implications…………….………………………………………..69
6.3 Future Research……….………………………………………………………….70

REFERENCES……………………………………………………………………… 74
Appendix 1………………………………………………………………………….. 81
Appendix 2………………………………………………………………………….. 81














LIST OF TABLES


Table 2.1 Crucial Types of Innovation……………………………………………….10
Table 2.2 Characteristics of Service Innovation…………………………………..…13
Table 5.1 Summary of service innovations in the motor market…………………….62
































LIST OF FIGURES


Figure 1.1 The Flow of this Thesis…………………..…………………………..….7
Figure 3.1 Processes of Quality-based Innovation Models…………………………..21
Figure 3.2 Market Demand Curves of Innovative and Non-innovative Firms………27
Figure 3.3 Extensive-form Game Corresponding to the Quality-based Innovation
Model…………………………………………………………………….29
Figure 3.4 Dynamic Game of Complete Information under q ＝ H…….………….31
Figure 3.5 Dynamic Game of Complete Information under q ＝ L………………...31
Figure 4.1 Product Stages and Corresponding Innovation Activities in the
Automotive Industry.…………………………………….……………….33
Figure 4.2 Extensive-form Game Corresponding to the Generalized Model………...39
Figure 4.3 Consumer Utility when P ≦ r(1/2) ＝ y ≦ r(0), or q ＝ H……….43
Figure 4.4 Consumer Utility when 0 ≦ r(1/2) ＝ y ≦ P , or q ＝ L……….…..44
Figure 4.5 Full-information Solutions in the Subforms of S = 0 and S = 1………...47
Figure 4.6 Dynamic Games of Complete Information under q ＝ H……………….49
Figure 4.7 Dynamic Games of Complete Information under q ＝ L……………….50
Figure 4.8 Extensive-form Dynamic Game of Incomplete Information……………..51

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