Research on Patent Licensing Strategy of Research and Development Uncertainty

In recent years, the high-tech industry has developed vigorously. Most firms innovate to maintain a competitive edge. However, there are uncertainties in the innovation process. In addition, it is not clear whether the success of innovation affects the licensing decisions of firms. Therefore, we build a supply chain to analyze the impacts of production costs and consumer preferences on the optimal licensing strategy for firms engaged in random R&D activities. The research conclusions are as follows: (1) Increased consumer perceived value does not necessarily increase the store brand's profit, and in some cases, it may hurt its profit; (2) Patent licensing may not invariably augment the store brand's profit; indeed, in certain instances, it might even detrimentally impact its profit; (3) Competition and cooperation between two firms may become an equilibrium strategy choice.