have known performance limitations making it difficult to determine the amount

Have known performance limitations making it

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have known performance limitations, making it difficult to determine the amount of improvement to the old technology that is possible once the new one has been introduced. The inability of S-curves to predict when you should shift from an old technology to a new one is an important limitation because shifting too early will saddle your company with a new technology that is inferior to the old one, while switching too late will allow other firms to move up the learning curve and position their product or service as the dominant design or technical standard in the industry. Moreover, in many cases, several things have to happen before a new technology can “take off,” and it is hard to know when that confluence of events will occur. Second, your decision to switch to a new technology shouldn’t just depend on the old technology having reached the point of diminishing returns. It should also depend on your identification of a need for a product based on the new technology, your ability to get customers to switch to products based on the new technology, your company’s capability to produce products based on the new technology, and the expected rate of diffusion of products based on the new technology. Existing technologies will often reach a point of diminishing returns long before you can offer a viable alternative based on a new technology. It can be particularly difficult to get industrial customers to switch to products based on a new technology because product improvements based on existing technology are much easier to integrate into their product development and production activities than are new products based on fundamentally new technology. If your customers need to download instant at 12
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download instant at change their infrastructure or production and product development processes to adopt products based on a new technology, they are going to be resistant to that change. As a result, you will risk losing your existing customers by making the shift to a new technology instead of improving your old technology. Third, switching to the new technology may not make sense because the new technology is initially inferior to existing alternatives and therefore cannot be used to serve the mainstream of the market. To use new technology successfully, you first have to focus on segments of the market that may be less profitable, while investing in the further development of the new technology to get it to the point where it is competitive with existing technologies in mainstream markets. Fourth, as the manager of an incumbent firm, you might be able to deal with decreasing marginal returns to your technology’s performance without immediately changing to a new technology. You can improve your product architecture, enhance components, identify new applications for your products, or even fight the adoption of new technology with legal action or public relations efforts, to maintain, or even increase, your sales.
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