Technological Factors

Question 1

What is a disruptive technology and an example

Answer 1

They do the same job in a different, more innovative and cheaper way. Don’t target mainstream customers and grow rapidly
Ex. Airbnb

Question 2

What is an example of sustaining technology? And example

Answer 2

Technological changes in expected ways. They target mainstream consumers. Finding better ways to serve customers through innovation. Incumbents usually win.
Ex. Tesla

Question 3

How large firms can avoid failure

Answer 3

Monitor outside their industry, partner with young firms, design by job not by customer

Question 4

Name the 4 opportunities of technology

Answer 4

Products- innovation, uniqueness, tangible/material advancements
Improved information use, access and sharing- IT advancements, intangible
Competitive advantage- barriers are lower
Customization- autonomous machinery, changing for sales, products

Question 5

What are the 4 threats of technology?

Answer 5

1) imitation- costly to develop but easy to share
2) new tech and entrants in unfamiliar areas- hard to pivot
3) information overload- so many things to look at when researching
4) disconnected employees and customers- working from home, online shopping

Question 6

What does installed base mean

Answer 6

The number of users

Question 7

Explain lock in

Answer 7

The size of investment, if it’s large there won’t be a resistance to switch

Question 8

Explain switching costs

Answer 8

The cost of moving, higher makes lock in worse

Question 9

Explain complementary goods and an example

Answer 9

Increases the value for your product (ex. Hardware in a computer)

Question 10

Explain technology standards and an example

Answer 10

Enables compatibility of complementary goods (ex. You can’t make a phone that needs to be charged without an outlet)

Question 11

Explain the network effect and an example

Answer 11

The value depends on the users (ex. Social media- it’s only valuable because all your friends use it)

Question 12

Explain the 3 tactics for small companies to succeed

Answer 12

1) enter with a product/ market that large firms don’t care about
2) don’t go after the mainstream because they are for big companies
3) large firms don’t go after your if they are not good at your skills or your target margin is too low

Question 13

Explain the 4 tactics for large firms to avoid failure

Answer 13

1) monitor outside of the industry
2) partner with young firms (ex. TD and AI)
3) establish venture units (ex. Have separate units that are not biased)
4) design by job not by customer (ex. Milkshake video)