The successful launch of an innovative product or service is driven by an unexplored market opportunity or a technological breakthrough. Oftentimes, however, firms lack the necessary resource capabilities to exploit new market opportunities; alternately, markets may not exist for firms to successfully profit from technological breakthroughs. In other words, firms suffer from performance gaps between their market opportunities and their resource capabilities. In this study, we organize the growing literature on knowledge management to develop the concept of a knowledge value chain, which we characterize as the transformative engine by which a firm can close such performance gaps. In addition to motivating the framework through case studies and placing the existing research literature in knowledge management within this framework, we also identify several directions of future research.
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