BA 469 lecture ch7 - 7 Strategy in High-Technology...

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1 7 Strategy in High-Technology Industries
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2 Overview Technology The body of scientific knowledge used in the production of goods or services High-tech industries Those in which the underlying scientific knowledge that companies in the industry use is advancing rapidly, and by implication so are the attributes of the products and services that result from its application
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3 The Importance of High-Tech Technology is accounting for an ever larger share of economic activity Many low-tech industries are becoming more high tech High-tech products are making their way into a wide range of businesses Even in industries not thought of as high tech, technology is changing aspects of the product or production system
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4 Technical Standards and Format Wars Technical standards A set of technical specifications that producers adhere to when making the product or a component of it Format wars Battles to set and control technical standards The source of product differentiation is based on the technical standard
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5 Technical Standards for Personal Computers
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6 Benefits of Standards Helps to guarantee compatibility Can help to reduce confusion Can help to reduce production costs Can help to reduce the risks associated with supplying complementary products
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7 Establishments of Standards Companies may lobby the government to mandate an industry standard Technical standards are often set by cooperation among businesses Public domain Standard is often selected competitively by market demand
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8 Network Effects and Positive Feedback Network effects The size of the network of complementary products is a primary determinant of demand for an industry’s products Positive feedback Reinforcing network effects to encourage adoption of a standard
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9 Positive Feedback in the Market for VCRs
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This note was uploaded on 10/22/2010 for the course BUS 496 taught by Professor Staff during the Spring '08 term at University of Nevada, Las Vegas.

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BA 469 lecture ch7 - 7 Strategy in High-Technology...

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