ENT 725 Chapter 4: ENT 725 Chapter 4 Notes.docx

• School: Ryerson University
• Department: Entrepreneurship and Strategy
• Course: ENT 725
• Professor: Phil Walsh

Document Summary

A dominant design is a single product or process architecture that dominates a product category (usually 50% or more of the market) One main reason is because industries exhibit increasing returns to adoption (the more the technology is adopted, the more valuable it becomes) Two primary sources of increasing returns: learning effects, network externalities. The more a technology is used, the more it is developed and the more the effective and efficient it becomes. As individuals and producers repeat a process, they learn to make it more efficient, often producing new technological solutions that may enable them to reduce input costs or waste rates. A firms prior learning shapes its ability to recognize the value of new information and to utilize that information effectively. Absorptive capacity refers to the ability of an organization to recognize, assimilate, and utilize new knowledge.