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Technology lecture 2.docx

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Roopa Reddy

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Sustaining Technology Sustaining technology Red arrow -> slow but gradual improvements  Targeting mainstream customers value (enhances product functionality)  Existing firms normally succeed with this  E.g. malls is an improvement from a department store Disruptive technologies Blue arrow -> give different attributes, features, that aren’t valued by the mainstream customers yet  Target a different area of the market  Starting off in the lower performance section, as time improves you meet customers’ needs and become popular fast  Improves technology rapidly until thy meet mainstream performance needs  May perform worst that preexisting goods but have something new and ‘cool’ that people want  Normally win  E.g. Steam ship, couldn’t travel long distance or they would blow up, however as time went on they grew and became reliable, taking out the sailing industry  E.g. Floppy Disks  Products are not valued by the main stream at first Disruptive Innovation in Retailing Retailers mission - Having the right product, at the right place, with the price at the right time 3 prior waves of significant change: - Department store – had everything with less specialized service - Mail order (catalogue shopping) – targeted rural customers, people who couldn’t access the mall as easily, were still able to get the same products (early version of online shopping) - Discount department store – target discount shoppers, in suburban areas, not as good service *Malls are not significant changes because they are the same idea as a department store but better ! Improved what department stores had set up Prior Failures happened because: - Specialists entered after generalists set up model - Started in simple products then moved up Disruptive Innovation in Retailing - Can the internet deliver on retailer’s mission? - Generalist to specialist o Amazon deals with web as vast/confusing space – not limited to one area, simplified the shopping experience online o Cybermalls and consumer comfort increase – collection of specialist stores, put together on one mall online Challenges with online shopping - Takes around 2 weeks to your product - Having the feeling, getting to see it on you - Hear the workers expertise on the product - Returns are hard Upmarket momentum - Clicks setting up mortar to deal with time factor o Stores are being set up online and in store to meet customers’ needs better – helps with turn around when exchange takes place, etc. Psychical stores are limited with space Why do large firms sometimes fail? - Managers focus on satisfying mainstream customers o Ignore new technologies that could become disruptive technologies o Move ‘up-market’ to high margin opportunities o Organizational processes weed out ideas that don’t address current customers’ needs o Organizational structure and capabilities slow response time and ability - Avoid small, uncertain, unfamiliar markets o Niche markets small and financially unattractive o Grow
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