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Unformatted text preview: Dominant designs and standards Era of ferment emergence of the dominant design
Output b) Innovation a) # firms & designs b) Scale of operation c) Equipment & employees a) Cost b) Process c) Few and similar d) Large e) Specialized & automated a) Features b) Product c) Many and different d) Small e) General & skilled time The history of the bicycle The Walking Machine The Velocipede or Boneshaker The High-Wheel Bicycle The High Wheel Tricycle The Highwheel Safety The Hard-Tired Safety The Pneumatic-Tired Safety The Kids' Bike Technology cycle stages
Radical innovation/discontinuity (often outside the existing industries) 2. Variation: Era of ferment 3. Emergence, selection of dominant design Retention: Era of incremental change
1. – – Enabling technologies Materials: Steel alloys (now: zirconium, titanium, aluminum alloys, carbon fiber) Pneumatic tires for cars Why do dominant designs emerge? Increasing returns to scale – Learning to produce – Learning to use (user preferences) – Complementary goods, technologies – Scale of production (recall early auto industry) – Scale of R&D – Network externalities (AEM 322) Do dominant designs always emerge (in all industries)? Pharmaceuticals? Apple vs. “IBMcompatible” computers? Switches on table lamps? Furniture? Formats for High Definition DVD? Dominant designs and technological standards DD are not always the single standard DD are not always proprietary – Windows, Mac OS, Linux De facto industry standard vs. de jure standards
– E.g. Windows vs. IPv6 – Bicycle design; 4 wheels on cars What are the benefits of standards/dominant designs? Downsides? Summary: Implications of technology cycles for firms’ survival
Discontinuities can be… Competenceenhancing Competencedestroying – IT in cars – Cassette player to reeltoreel magnetic tape recorder (“8 track”) makers – – CD in music storage Calculators to sliderule makers Biotech for pharmaceuticals? Management over the technology cycle
1. 2. 3. 4. – Place your bets – Entertain multiple options Discontinuity Ferment – Try to get in your own IP/innovation Standardization/dominant design(s) Incremental change What are the respective strategies? – Improve and prepare for the next wave Strategies for competing over the technology cycle
12. Discontinuity, ferment
– Invest in multiple technologies, features, designs R&D alliances, minority investments, “skunkworks” operations: allow for BUSINESS MODEL INNOVATION Alliances to drive adoption of own technology; industry associations to foment own IP for standards Focus on process innovation, growth, new markets Invest in gathering information about other industries, technologies that are potentially disruptive 3. Standardization/dominant design(s)
– 4. Incremental change
– – ...
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This note was uploaded on 02/19/2009 for the course AEM 4370 taught by Professor Leiponen,a. during the Spring '08 term at Cornell.
- Spring '08