The approach used relative to technical capabilities

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The approach used relative to technical capabilities can be classified as: 1. Destroy—usually to replace with better technology. Out with the old, in with the new. (Single vs Double hulled tankers) 2-2
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2. Preserve—the technology may be old but the firm believes it still has utility. (Crayola crayons) 3. Develop—can give the firm a competitive leap over others in the industry. (Sears adopting Internet technology) ii. Market capabilities represent the firm's capacity to get the product to the market place and into the hands of purchasers. Engineers may develop new technical capabilities but if there is no way to distribute or sell the product, then competitive advantage is not likely to appear. c. Technology and Competitive Advantage i. Competitive advantage— something the firm does better than any of its competitors. ii. Sustainable competitive advantage— a competitive advantage that customers value and other firms cannot easily duplicate. iii. When we analyze technology as a component of competitive advantage, we can categorize technology into the following groups: o Continuous versus Radical Technology o Maturing Technology o Offensive versus Defensive Technology d. Continuous versus Radical Technology—these are ends of the continuum. i. Continuous technology— Changes in technology that while not constant reflect a progression of changes that happen over a relatively short period of time. Because of the short period of time between advances, these advances are perceived as being continuous. Example: the personal computer becoming lighter and more mobile. o Continuous technology supports existing corporate structure and allows competitive advantage to be generated by doing being the first to introduce new technology or being the price leader. ii. Radical technology— Causes a dramatic change in the way things are done. Example: when the microcomputer was originally introduced, it changed the way information was processed and stored in organizations. Other examples include Henry Ford's introduction of the assembly line. 2-3
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o Radical technology can create new industries and destroy existing ones. It is a clear threat for those who are using a continuous approach with existing technologies. iii. Next-generation technology —Is between radical and continuous. Example: The personal computer is a next- generation technology from the mainframe computer. It was made possible by the radical technology of the silicon chip. iv. Disruptive technology— It is very possible for a disruptive technology to be radical technology, but this is not necessarily true. It is possible for a non-radical technology to generate price leadership, and by doing so it may disrupt the market or segments of the marketplace.
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