Chapter 3 = midterm

Question 1

What is Technology trajectory?

Answer 1

The path a technology takes through its lifetime. This path may refer to its rate of performance improvement, its rate of diffusion, or other change of interest.

Question 2

What are the 4 most common dimensions for describing technological innovations?

Answer 2

• Product vs Process innovation
• Radical vs Incremental innovation
• Competence-enhancing vs Competence-destroying innovation
• Architectural vs Component innovation

Question 3

What is Radical innovation?

Answer 3

An innovation that is very new and different from prior solutions.

Question 4

What is Incremental innovation?

Answer 4

An innovation that makes a relatively minor change from (or adjustment to) existing practices.

Question 5

What is Component (modular) innovation?

Answer 5

An innovation to one or more components that does not significantly affect the overall configuration of the system.

Question 6

What is Architectural innovation?

Answer 6

An innovation that changes the overall design of a system or the way its components interact with each other.

Question 7

What is Discontinuous technology?

Answer 7

A technology that fulfills a similar market need by building on an entirely new knowledge base. Renders other technologies obsolete.

Question 8

What is technology diffusion?

Answer 8

The spread of a technology through a population.

Question 9

What are limitations of S-curve model as a prescriptive tool?

Answer 9

1. Rare that true limits of a technology are known in advance. Also often disagreement about what the limits will be.
2. The shape of a technology’s s-curve is not set in stone. Unexpected changes in the market, component technologies or complementary technologies can shorten or extend the life of a technology. Firms can influence the shape through their development activities.
3. Whether switching to a new technology will benefit a firm depends on factors, such as:
   - advantages offered by the new technology
   - it’s fit with the firm’s current abilities = effort and time required to switch
   - it’s fit with the firm’s position in complementary resources.
   - the expected rate of diffusion of the new technology. Only following an s-curve may cause a firm to switch technologies earlier or later than it should.

Question 10

What are the Adopter categories in diffusion of innovation?

Answer 10

1. innovators
2. early adopters
3. early majority
4. late majority
5. laggards

Question 11

What is a Dominant design?

Answer 11

A product design that is adopted by the majority of producers, typically creating a stable architecture on which the industry can focus its efforts.

Question 12

What are product innovations and process innovations?

Answer 12

• Product innovations: embodied in the outputs of an organization (goods or services).
• Process innovations: innovations in the way an organization conducts its business, such as the techniques of producing or marketing goods or services. Often oriented toward improving the efficiency of production (reducing defect rates or increasing the quantity produced in a given time)

Product innovations may be more visible than process innovations, but both are extremely important for an organization’s ability to compete.

Question 13

What can radicalness of an innovation be conceived as?

Answer 13

The combination of newness and the degree of differentness. The radicalness is relative, and may change over time or with respect to different observers. An innovation that was once considered radical may eventually be considered incremental as the knowledge underlying the innovation becomes more common. An innovation that is radical to one firm may seem incremental to another.

Question 14

What is a competence-enhancing and a competence-destroying innovation?

Answer 14

• A competence-enhancing innovation builds on existing knowledge and skills
• A competence-destroying innovation does not build on existing knowledge, but rather renders existing knowledge and skills obsolete.
  Whether an innovation is competence enhancing or destroying depends on whose perspective is being taken. An innovation can be competence enhancing to one firm, while competence destroying for another.

Question 15

What is required for a firm to initiate component and architectural innovation?

Answer 15

• Component innovation: the firm have knowledge only about that component.
• Architectural innovation: architectural knowledge about the way components link and integrate to form the whole system.

Question 16

What is a common relationships between the use of different innovation dimensions?

Answer 16

Architectural innovations are often considered more radical and competence destroying than component innovations.

Question 17

What are two things that have been shown to conform to s-curves?

Answer 17

• The rate of a technology’s performance improvement

- The rate at which a technology is adopted in the marketplace

Question 18

What is the general explanation of the s-curve of technological improvement?

Answer 18

When plotted against the amount of money and effort invested in the technology:

1. Slow initial improvement. Fundamentals are poorly understood.
2. Accelerated improvement. Deeper understanding and legitimacy.
3. Diminishing improvement. Reaching inherent limits.

Question 19

How are s-curves in technology diffusion obtained and what do they show?

Answer 19

Plotting the cumulative number of adopters of the technology against time.

1. Initially slow adoption. Unfamiliar technology.
2. Accelerated adoption. Better understood and utilized by mass market.
3. Declined rate of adoption. Saturated market.

Question 20

How can s-curves be used as a prescriptive tool?

Answer 20

• Predict when a technology will reach its limits and for whether and when the firm should move to a new, more radical technology.
• Assess based on data whether a technology appears to be approaching its limits or to identify new technologies that might be emerging on s-curves that will intersect the firm’s technology s-curve.

Question 21

What does the s-curve model suggest about technological cycles?

Answer 21

Technological change is cyclical; each new s-curve ushers in an initial period of turbulence, followed by rapid improvement, then diminishing returns, and is ultimately displaced by a new technological discontinuity.

Question 22

What is creative destruction?

Answer 22

The emergence of a new technological discontinuity can create new leaders and new losers in the industry structure

Question 23

What are the 2 basic phases that technology passes through in Utterback and Abernathy’s model?

Answer 23

1. Fluid phase. Uncertainty about both the technology and its market. Products based on the technology might be crude, unreliable or expensive, but might suit the needs of some market niches. Firms experiment with different factors or features to assess market response.
2. Specific phase. Eventually, producers and customers begin to arrive at some consensus about the desired product attributes, and a dominant design emerges.

Question 24

What are the parts of Anderson and Tushman’s model for cycles of technological change?

Answer 24

1. Era of ferment. Turbulence and uncertainty. Might offer breakthrough capabilities, but there is little agreement about subsystems of the technology or how they should be configured. Different concepts of what purpose the technology should serve, or how a business model might be built around it. Considerable design competition as firms experiment with different forms.
2. Arising dominant design, unless the next discontinuity arrived too soon and disrupted the cycle, or several producers patented their own proprietary technologies and refused to license to each other. Bundles a combination of features that best fulfilled the demands of the majority of the market.
3. Era of incremental change. Firms focus on efficiency and market penetration. Try different models and price points, and to lower production costs by simplifying the design or improving the production process. Continues until the next technological discontinuity.

Question 25

Why do successful firms often resist the transition to a new technology with significant advantages?

Answer 25

They are in their era of incremental change.

• Don’t invest in learning about alternative design architectures and instead invest in refining their competences related to the dominant architecture.
• > less able to identify and respond to a major architectural innovation. The firm’s expertise, structure, communication channels, and information filters oriented around maximizing the ability to compete in the existing dominant design.