•When looking at different products, such as probiotic yogurts, omega-3 bread, vitamin- boosted cereals, juices or dietary supplements, it is not always obvious if the product is a food or drug. •The industry landscape starts changing accordingly. For example, Nestlé recently acquired Pfizer’s baby nutrition business. Other examples: •Biopharmaceuticals •E-health •Nano-chemistry •Human-cyborg relations •Smart grids
SLOANREVIEW.MIT.EDU FALL 2013 MIT SLOAN MANAGEMENT REVIEW 67 growth. We have also identified four important drivers of industry convergence: technological ad- vancement, open architectures and standards, policy and regulatory reforms, and changes in cus- tomer expectations and preferences. (See “The Drivers of Convergence,” p. 69.) Four Strategic Pathways Companies have used four basic strategies to pre- serve and capture value during convergence: technology pioneer, market attacker, ecosystem ag- gregator and business remodeler. We will explore these pathways here. (See “Guiding Principles for Implementing Convergence Strategies,” p. 72.) The Technology Pioneer Technology pioneers provide superior technological solutions that pro- actively contribute to the advancement of convergence between industries. They enter the market early and make strategic choices about the appropriate technological specialization as well as the control of intellectual property. New ventures following this path recognize that they need to demonstrate the technological poten- tial of their inventions and evaluate the conditions for early customer adoption. Consider video and data delivery provider Round Box, of Florham Park, New Jersey, which developed a novel way to stream video over mobile networks. The founders saw their venture as a “mobile broadcast conver- gence company,” with a technological solution for optimizing TV streaming to mobile phones. They already had a prototype. The challenges — and this is common among technology pioneers — were getting large carriers and network providers to em- brace their technology and protecting their intellectual property. Successful technology pio- neers we studied pursue these goals in several ways. They drive standards. One way to advance your technology is to promote standardization activities within the industry. Kineto Wireless, a private com- pany in Milpitas, California, for example, is a leading provider of IP-based over-the-top solutions to mobile companies. In advancing Unlicensed Mobile Access technology, which ensured standardized approaches for handsets and infrastructure equip- ment, Kineto Wireless established a market foothold for its own technology solutions. They become the technology of choice. Technol- ogy pioneers need to become well recognized for their leadership, thus making it more difficult for downstream players to promote substitute products.
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