Schilling-04

Schilling-04 - StrategicManagementof...

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Chapter 4 STANDARDS BATTLES  AND DESIGN DOMINANCE Strategic Management of  Technological Innovation   Melissa Schilling
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2 In 1980, Microsoft didn’t even have a personal computer (PC)  operating system – the dominant operating system was CP/M written  and sold by Gary Kildall through his company Digital Research As the market for personal computers grew and IBM realized they  were missing out on what might be a significant industry, they rushed  to get a PC to market.  Kildall, for some unclear reason, did not get back to IBM fast  enough so they turned to Bill Gates who was already writing  software for IBM. Gates bought an operating system from Seattle Computer  Company and called it MS DOS. It was a clone of CP/M.  The success of the IBM PCs (and clones of IBM PCs) resulted in the  rapid spread of MS DOS, and an even more rapid proliferation of  software applications designed to run on MS DOS. Microsoft’s  Windows was later bundled with (and eventually replaced) MS DOS. Had Gary Kildall signed with IBM, or had other companies not been  able to clone the IBM PC, the software industry might look very  different today! The Rise of Microsoft
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3 Discussion Questions: 1. What factors led to Microsoft's emergence as the  dominant personal computer operating system  provider? Is Microsoft's dominance due to luck, skill, or  some combination of both? 2. How might the computing industry look different if Gary  Kildall had signed with IBM? 3. Does having a dominant standard in operating systems  benefit or hurt consumers? Does it benefit or hurt  computer hardware producers?   The Rise of Microsoft
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4 Overview Many industries experience strong pressure to  select a single (or few) dominant design(s). Once selected, producers and customers focus  their efforts on improving their efficiency in  manufacturing, delivering, marketing or deploying  this dominant design rather than continue to  develop and consider alternatives There are multiple dimensions of value that shape  which technology rises to the position of the  dominant design. The strategies of firms can influence several of  these dimensions, enhancing the likelihood of their  technologies rising to dominance.
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5 Why Dominant Designs Are Selected Increasing returns to adoption   When a technology becomes more valuable the more it  is adopted. The more they are used, the more they are understood 
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Schilling-04 - StrategicManagementof...

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