ATHENA WEEK 2 - 3 Flashcards
Dominant design
a single product or process that dominates a product category
is the dominant design always officially reinforced/acknowedged
no
What happens after a dominant design emerges?
Producers and customers stop focusing on alternative designs and instead work on improving, manufacturing, and marketing the dominant design.
Why do industries often settle on a dominant design?
increasing returns to adoption
What are increasing returns in the context of dominant design?
It means the more a product is used, the higher the return or benefit from using it, due to a large installed base.
Two of the primary sources of increasing returns are
- network externalities: the value of a good to a user increases with the number of other uses of the same/similar good
- learning effects: as individuals/producers repeat the process, they lean to make it more efficient
absorptive capacity
ability of an organization to recognize, assimilate and utilize new knowledge
installed base
the number of users of a good
complementary goods
additional goods and services that enable or enhance the value of another good
What is a common result of a dominant standard in a market?
It creates winner-take-all markets, where one firm or design dominates the industry.
What is path dependency in technology and innovation?
It means that future outcomes depend heavily on the past events and choices that happened along the way.
Q: What two things create the value of a technology when competing for design dominance? (graph)
Network externalities and technological value
In Graph (a), what does lower technological value mean for a product?
The product’s value mostly depends on how many people use it (network effects)
In Graph (b), what does higher technological value mean for a product?
The product starts off valuable because of its technology, and gets even more valuable as more people use it.
What is the main takeaway from the design dominance graph?
Technology’s value matters — even if the user base is small, better technology gives an advantage.
How do customers choose between two competing technologies?
They compare the total value of each option, which includes both tech performance and number of users.
buyer utility map
6 different utility levers (customer productivity, simplicity, convenience, risk, fun and image, environmental friendliness) and 6 stages of buyers’ experience (purchase, delivery, use, supplements, maintenance, disposal).
What factors influence the value of a new technology besides its standalone benefits?
installed user base and the availability of complementary goods
Why might a technically better new technology struggle against an older one?
Because the older technology has a large user base and existing support products, making it more valuable to users.
What must a new technology do to compete with an established one?
It must offer significantly higher standalone utility to convince users to switch.
What makes adoption easier for a new technology?
If it can integrate with the existing user base and complementary goods, its overall value increases, making it easier to adopt.
What three factors create the full value of existing technology in the diagram?
Technological utility, installed base, and complementary goods availability.
