BU111 Lecture 7: Lecture 7 Technology & Economic
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BU111 Full Course Notes
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Focused on always improving your existing product in expected ways: target: mainstream, high-margin customers with enhancements in product functionality, an incumbent firm is one that already exists in the market, eg. Disruptive technology: different performance attributes not valued by mainstream, eg. Apple disrupted ibm"s powerful computer market by introducing basic, cheaper computers. Start in lower performance segment, the initial product is poor, improves rapidly; enters mainstream market: new, disrupting firms often win. If uber creates car-sharing service is it disruptive: airbnb disrupts hotel industry through cheaper prices, key consideration. Why do large firms fail: the capabilities of the firm slows down response time, organization structure and capabilities slow response time/ability and influence choices, organizational processes weed out ideas that don"t address customer needs. Ignore new technologies: move to higher margin opportunities, avoid small, uncertain, unfamiliar markets, nice markets small and financially unattractive, growth potential uncertain, lower profit margins, risk of being criticized if you fail.
