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7. TECHNOLOGY LIFECYCLE.pdf - HSC 2408: TECHNOLOGY AND...

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1 |P a g eHSC 2408: TECHNOLOGY AND INNOVATION BY DR PETER SASAKA7.0 TECHNOLOGY LIFECYCLEStatistical regularities show that the product lifecycle can be used to forecast the way the product attributes,demand, production and competition will change as the product matures. A related and more useful conceptis the technological lifecycle. This links market growth and technology.Technological aging/lifecycle graphTechnologyDevelopmentApplicationLaunchApplicationGrowthMatureTechnologyTechnologySubstitutionIt has been seen that technological change generally follows the course described by the technologylifecycle graph. By plotting the market volume over time for any industry, one can identify the changes inthe industry. This is called technological aging of the industry. This exercise can be carried out both for theproduct as well as the process. When a new industry based on new technology is begun, there will come apoint in time that one can mark as the inception point of the technology.7.1Phases of Technological Aging/LifecycleThe various phases of technological aging/lifecycle using Automobile as anIllustration are as follows:Phase I: Technology DevelopmentThen the first technological phase begins with the rapid development oftheTIME
2 |P a g enew technology. This phase is called the Technology Development phase.In the case of the automobile, it would be from 1887 to 1902, asexperiments with steam, electric and gasoline powered vehicles wereconducted.This is an exciting time, because product improvements continue andimproved processes for producing cheaper, better products are innovated.This is the time of eliminating weak competitors.Phase II: Applications LaunchThis phase is the creative period of product experimentation.This lasts till the time a standard design has been worked out and rapid growth of the market begins.This occurred with Ford's Model T design.During this phase, failure rate of firms in the industry continues to be high, but successful firmsgrow.Corporate R & D becomes important to maintain incremental model improvements. For example,by 1923 only eight major American firms had remained in the automobile industry, capturing 99 percent of the market.Phase III: Applications GrowthDuring this phase there is a rapid growth in the penetration of technology into markets.After some time, however, the innovation rate slows down and the market peaks; no new marketsare created.Phase IV: Mature TechnologyIn this phase, process innovations are dominant.Very few firms survive, of the original lot.Competition is primarily on price and segmented market lines.Production is specialized and efficient.Economies of scale and marketing dominance continue to whittle down competitors, to thefinal few.

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Term
Spring
Professor
student
Tags
Marketing, Product life cycle management

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