Technology strategies and standard competition

Transcription

Student presentations
Technology strategies and standard competition
29/04/2015
Technology strategies and standard
competition – comparative cases of
Apple and Microsoft
Jarunee Wonglimpiyarat
Journal of High Technology Management Research
Agenda
1.
2.
3.
4.
5.
6.
7.
8.
Structure
Main aspects
Theoretical framework
Methodology
Technological change
Case Study
Conclusions
Back-up
Structure of the Paper
1. Introduction
2. Theoretical Framework
(1)
(2)
(3)
(4)
3.
4.
5.
6.
7.
Innovation and innovation process
Porter‘s five forces
Technology standards and platform
Strategies in managing technological innovations
Methodology for analysing the platform creation process
Understanding the process of technological change in various industries
Case study of Apple and Microsoft‘s technology strategies
Generalisable principles synthesised from the case study analysis
Conclusions
Main Aspects of the Paper
Objective:
•
to understand how innovative firms pursue strategies in securing the benefits from an innovation (based on the ILCM)
Case:
•
Innovation cases of the tech firms Apple and Microsoft
Method:
•
In order to analyse these cases a new methodolical framework of platform is developed by the paper
Assumption:
•
A firm‘s ability to establish an industry standard and lock-in customers allows to create competitive advantage
Theoretical Framework – Sum up*
• Innovation and innovation process:
•
•
•
•
•
Definition
S-Curve
Technology push and demand pull
Innovation life cycle model
Product life cycle model
• Porter‘s five forces
• Argues that a firm‘s strategy is influenced by these five forces
• Technology standard and platform
• Platform: cluster of capabilities or competencies capable of creating competitive advantage
• Strategies in managing technological innovations
• Adoption of strategies is important in managing innovations and in making innovation happen
*for further information go the the back up slides
Methodology
•
•
This study synthesises variables for use as indicators of technology platform
1.
High performance relative to exisiting practices in several dimensions of performance
2.
Variety of continuing applications
3.
Intermediary serving multiple value chains
4.
Subject to obsolence from new technology
5.
Mostly single ownership
6.
Controls channel of supply customers
7.
Utilising numercially intensive analystic processing
This methodology allows the understanding of the way innovators build up a technological capability to gain competitive advantage
Process of technological change in industries
• Innovation life cycle model as main concept behind
Case: Apple and Microsoft
Apple:
• with launch of Macintosh: strategy of not licensing MacOS to OEM Hardware suppliers
 Constrained growth of Apple and limited potential to create a business platform
Microsoft:
• pursuit of low-cost licensing strategy: direct cooperation with PC manufacturers for licensing
Windows + increase of value of Microsoft Windows for PC users due to product bundling
strategy
 de facto standard for operating system in PC industry
Result Case: Apple and Microsoft
Analysis shows:
Value of PC
to consumer
Future
demand
Availability of
softare
apllications
Size of
installed
base
Microsoft succesfully established a
technology platform which allows it
to launch further related software
products
• thanks to its control of the technology platform and the de facto standard for
operating systems Mircosoft achieved competitive advantage
• this ability enables Mircosoft to control the delivery channels and own the
customers, which lead to a continuing advantage in the operating system market
Conclusions
• The ability to establish an industry standard enables an innovator to create competitive advantage and…
•
…provides a platform to excel the innovation process by generating a continuity of commercial successful
innovations
• The innovator‘s strategies are consistent with the potential of platform creation
• Technology platforms emerge from a combination of strategies
• The platform needs to be consistently renewed to maintain platform advantage (e.g. aquiring software firms)
“Grazie Mille“ for your attention
Theoretical Framework – back up
• Innovation and innovation process:
•
Definition: process of transforming technology frontier into the commercialised product/process innovation in a competitive market
•
S-Curve: stages characterized by the efforts to transform an invention into an innovation
•
Technology push (emphasize on R&D) and demand pull (emphasize on market)
•
Innovation life cycle model: describes the process of innovation and the degree of technological change
•
Product life cycle model: reflects innovation diffusion along four temporal stages
Theoretical Framework – back up
• Porter‘s five forces:
• Based on resources based approach
• Argues that a firm‘s strategy is influenced by these five forces
• To defend itself against or to influence these forces a firm should find its position in an
industry
Theoretical Framework – Back Up
• Technology standard and platform:
• Platform: cluster of capabilities or competencies capable of creating
competitive advantage (in terms of subsequent innovations)
• Concerning innovation diffusion standards can affect competition
• Ability to establish standards could provide a technology platform allowing
the innovation to outreach firm‘s borders
• Two patterns:
1. uniform standardisation (diffusion requires standardisation among
multiplayers) – e.g. credit cards
2. Without uniform standardisation (diffusion does not require formal
adoption of standards among multiplayers) – e.g. Windows System
• Porter: use of technology platform = resource to achieve competitve
advantage
Theoretical Framework – Back up
•
Resourced-based approach: firms compete according to their different capabilities and strategies to cope with changing
environment are strictly associated
•
First to market (take advantage of benefits from initial demand = extra profit before competitors respond) or follower (capture
profit making opportunities, respond more accurately to customer needs)
•
Adoption of strategies is important in managing innovations and in making innovation happen
•
The changes of strategies due ever changing market competition influence the progress of innovation
Theoretical Framework – Back up
•
Resourced-based approach: firms compete according to their different capabilities and strategies to cope with changing
environment are strictly associated
•
First to market (take advantage of benefits from initial demand = extra profit before competitors respond) or follower (capture
profit making opportunities, respond more accurately to customer needs)
•
Adoption of strategies is important in managing innovations and in making innovation happen
•
The changes of strategies due ever changing market competition influence the progress of innovation
Technology study &
standard competition
Comparative innovation cases of apple & microsoft
TEAMWORK: Riccardo Raccis; Michele Sunda; Mattia Porta.
Introduction
• The first Personal Computer
models were really expensive
(20000$) and only people or
organizations with technical
knowledge and specific needs
were allowed to get it.
Introduction
• Understanding the potential mass-market grow, two principal actors started
to develop product for users with low competence, Apple and Microsoft.
But which kind of product was needed
by mass-market ?
Technology push
Demand pull
Porter: Five forces analysis
Threat of new
Entrants
-Low Threat:
Needs of huge
investment
Bargaining Power
of Buyers
-High, PC was an
unknown
technology
Threat of Rivalry
among existing
firms
-Higer Threat,
strong competition
among existing
firms
Threat of
Substitute
Products
-Low threat, the
PC technology
was unique
Bargaining Power
of Suppliers
-Low, Intangible
product does not
require specific
relation.
Microsoft’s solution
Threat of new
Entrants:
partnership with
IBM
Bargaining Power
of Suppliers
Windows allow
every Software
House to create
programs
compatible with
him
Threat of Rivalry
among existing
firms: partnership
with IBM
Microsoft
Threat of Substitute
Products
-Not alternative of
product for the
same range of price
Bargaining Power
of Buyers
-Commercialization
through partner
channel
Threat of Rivalry
among existing firms
-It did not takes in
account this threat
Threat of new
Entrants
-It did not takes in
account this threat
Apple
Bargaining Power of
Suppliers:
Apple products was
both software and
hardware. Motorola
was the mono
hardware supplier.
Apple’s solution
Bargaining Power of
Buyers
-The products Lisa
and Machintosh were
really expensive
(10000$)/ low
willingness to pay
Threat of substitute
product: disruptive
policy
Scurve analysis
Historical evidences
Thank you
competition
Comparative cases of Apple and Microsoft
Innovation Management
Camilla Casciu, Lucia Demurtas, Aga Lubkiewicz
Professor : Francesca Cabiddu
competition
1. Introduction
2. Theoretical framework
3. Methodology for analysing the platform creation process
4. Understanding the process of technological change in various industries
5. Case study of Apple and Microsoft's technology strategies
6. Generalisable principles synthesised from the case study analysis
7. Conclusions and avenues for future research
1. INTRODUCTION
• Understanding the use of technology strategies and competition to
establish technology standards.
• The use of the new methodological framework platform in analysing
a comparative case study.
• The contribution of the new methodological framework platform in
the area of innovation management.
2. THEORETICAL FRAMEWORK
• Innovation and Innovation process
Innovation is a process of
transorming the technology frontier
into the commercialised
product/process innovation in a
competitive market.
The innovation process presents a Scurve, based on the efforts of the
innovator to adapt a technological
development (invention) for
tranformation into an innovation
(commercial product).
• Five forces Porter's approach
The use of competitive strategy seen as the way to achieve competitive advantage. The five forces of
competitive position model are: 1. Relations with suppliers; 2. Bargaining power of buyers; 3. Threats of new
entrants; 4. Threats of substitute products or services; 5. Rivalry amongst existing firms.
The firm's strategy, influenced by these forces, has to find a position in a industry to defenc itself
against the forces or to influence them in its favour.
• Technology standards and platform
Stardards can affect the environment of competition.
There are two patterns of development:
With uniform standardisation (among multiplayers), or without standards.
Being first to the market can help firms to take advantage of benefits from initial
demand in the market and enjoy an extra profit until competitors can respond.
• Firms compete according to their different capabilities.
• “Perfect competition was incompatible with innovation. As a matter of fact, perfect competition is and
always has been temporarily suspended whenever anything new is being introduced.....”
(Nelson and Winter and Schumpeter).
• The adoption of strategies is important in managing innovations and in making the
innovation happen.
• The innovatory strategies can change over time.
• The change of the strategies influence the progress of innovation .
3. Methodology for analysing the platform creation process
• “Platform”, is used to describe a cluster of capabilities or competencies able of creating
competitive advantage for a firm in terms of subsequent innovations.
• Continuity of commercially successful innovations
• Synthesises of different variables for use as indicators of technology platform ( Table 2)
4. Understanding the process of technological change in various
industries
•The innovation life cycle model is adopted as an approach to analyse the process of technological change in various industrial
sectors.
• The process of technological change in the video recording industry represents a succession of S- Curves. The successive Scurves represent the process of technological changes from magnetic recording technology to laser disc technology, compact disc
technology and digital versatile disc (DVD)/high definition DVD (HD‐DVD) technology and Blu Ray disc technology.
• The process of technological change in the computer industry represents a succession of S-Curves. The technological
improvement follows the S-curve to reflect technology progression from mainframe, minicomputer, PC.
• In the energy industry, the process of technological change presents an envelope of S-curves.
• In the bank card industry ,the process of technological change presents a progress from the magnetic stripe technology towards
the smart card technology. The process of bank card innovation diffusion presents a parallel substitution of technology.
• In the mobile telephony industry, the innovation process, based on the theory of innovation life cycle, represents the
generations of mobile system from 1G to 4G . A succession of S-curves represents versions of mobile communication
Innovation Management_ Camilla Casciu, Lucia Demurtas
Computer industry
Video recording industry
Bank card industry
Energy sector
Mobile telephony industry
Strategies of Apple and Microsoft to cope with still changing competitive conditions.
Competition
At the beginning of competition between both companies, Apple decided about not licensing Mac OS to Original Equipment Manufacturer (OEM)
hardware suppliers. Apple was not good informed, that Microsoft was a good follower who was ready to launch a similar product to MAC OS
(Microsoft Windows). Strategy of not licensing shows that Apple omitted the importance of speed in using other PC’s manufactures distribution and
they missed they chance to bring and innovation to the market.
As a result Microsoft Windows was faster on the market than MAC OS, and MAC OS failed. Making a mistake with providing the not licensing
strategy lowered Apple's capability to compete and limited the potential to have a competitive advantage.
Microsoft
At that time Microsoft made very good move and pursuit a low-cost strategy with which it could license Windows via OEM arrangements with PC
manufacturers.
Microsoft also used product bundling strategy which increased the demand for the product and reduced the scope of competing suppliers. The
strength that Windows was distributed by global PC manufacturers made it good adopted and thought as a standard.
Microsoft could enjoy a continuing competitive advantage from its ability to dominate the PC industry with the extension of Windows standards.
Strategies of Apple and Microsoft to cope with still changing competitive conditions.
Apple
Competition for potential platform creation began for Apple when they launched Apple Lisa.
But regarded to customers opinion, Apple set the price too high (Apple Lisa $10 000 while
standalone PC $2 000). Still it was a big innovation because Apple Lisa ran as a closed system,
which was preventing software development firms from writing application programmes.
Even though for customers those innovative Apple’s machines was not seen as valuable for
customers to purchase for that high price.
In result Apple failed to establish a business platform even if it was an early mover in the PC
Windows operating system market and might have established their technologies as standard.
5. Case study of Apple and Microsoft's technology
strategies
SWOT analysis of the strategic position of Apple and Microsoft.
6. Generalisable principles synthesised from the case study
analysis
Technology push and demand pull & Technology S-curves
Case study analysis has shown that innovation diffusion depends not only on conventional technology push and demand pull models
but also on dynamic interactions between them two.
•
• The level of technology adoption and diffusion might be
seen as an S-curve.
So the technology S-curves reflect the adoption,
diffusion and market acceptance of innovation.
With the improving technology from SMS to mobile Web
(HTML and HXTML) and mobile client application, Apple
and Microsoft launch their mobile innovations which
helps spur the mobile market adoption. In response to the
customers' demand for web-based applications and thirdparty applications, the S-curve of technological innovation
progresses from mobile e-market towards mobile banking to
provide value-added web-based applications.
6. Generalisable principles synthesised from the case study
analysis
Five forces Porter
Porter’s research is significant to make a selection of
strategies for Apple and Microsoft, particularly the
strategies of mobile Internet and mobile commerce.
CONCLUSIONS The study has shown that
technology platform emerges from a combination of
strategies and that the platform needs to be
consistently upgraded/renewed to maintain a platform
advantage. It could be argued that technology could
render competitive advantage to innovators. However,
over time, the technology platform in competition
tends to be open to allow plug-in of various
applications which would create increased value to
customers.
Journal of High Technology Management Research
Technology strategy and standard competition
Comparative innovation cases of
Apple and Microsoft
Innovation Management 2015
Students: Carlotta Cambarau, Sara Filippetti and Sonia Pili
The enviroment influence innovation
Cupertino (Silicon Valley) California
Steve Jobs had
the wind in the
sails
Redmond (Washington) - Stati Uniti
Bill Gates was
the
pioneer of the
PC
Tools used for the case study analysis of Apple
and Microsoft’s technology strategies:
1) Innovation life cycle model
2) Five forces Porter’s approach
3) Technology standards and platform
Innovation life cycle model
Technology Standards and platform
Macintosh was born in 1984
High price
High quality
Niche product used by a
few
Windows was born in 1985
Average price accessibile to
all
Virtuous circle: more people
use windows and more
people will buy windows
Innovation Life Cycle
Model:
the S – Curve for Apple
Technological
change
1980
1990
2000
2010
Today
Time
Model:
the S – Curve for Microsoft
Technological
change
1980
1990
2000
2010
Today
Time
Where
’s revenues comes from?
Where’s
revenues comes from?
3%
Microsoft business division
31%
35,10%
Server and Tools
Windows & Windows Live
23%
28%
Entertainment and Devices
Division
Online Services Division
Unallocated and other
28%
Product Innovation
Apple TV
Product Innovation
Office
X-Box
Windows
Microsoft
visual
studio
Zune
Windows
Phone
SkyDrive
Bing
Apple
High
• -Low investment in Customer Service
• -Average Marketing investment
• -Human Resources count 80,400 highly
qualified people
• -Minimum investment in
Research&Development (€ 3.5 billion dollars)
REWAR
D
Low
Low
INVESTMENT
High
•
•
•
•
High
-Average investment in Customer Service
-High Marketing investment
-Human Resources count 127.104 qualified
people
-Substantial investments in
Research&Development (€ 10.6 billion dollars)
REWAR
D
Low
Low
INVESTMENT
High
The Apple Marketing
Philosophy
Empathy
The company will truly understand needs of the market better than any other company.
Focus
In order to do a good job they decide to eliminate all of unimportant opportunities.
Impute
People judge a book by its cover.
The company may have the best product, the highest quality, the most useful software etc..
presenting them in a slipshod manner, they will be percived as slipshod; presenting them in a
creative, professional manner, the company will impute the desired quality.
Marketing
philosophy
Network Marketing
Each windows product is compatible with another windows product.
Be customer focused
There are a lot of jokes about the customer service of Microsoft but if you really look at it,
the reason why Microsoft is actually working is because help is available offline as well as
online. Your computer might crash for any reason, but generally you are able to specify the
reason for the crash and if you are a techie you will be able to rejuvenate it.
Easy to use
Make products which can be used by the youngest or by the oldest in the easiest manner. Like
Nokia in mobile phones, Microsoft OS is known for its ease of access. The start button has
been revolutionary.
Apple’s Innovation Strategy to achieve
competitive advantages
• Focus on digital consumer opportunity
• Simplify the consumer experience
• Design the most beautiful products
• Combine hardware, software and cloud
• Expect to invent the next big thing
Innovation Strategy
to achieve competitive advantages
• Microsoft defines innovation as “the conversion of knowledge and ideas into
new or improved products, processes, or services to gain a competitive
advantage.”
• The use of social media sites, and the ability to get immediate feedback and
input from employees, customers and markets allows company to accelerate
innovation.
• Online, social collaboration also serves as a self-documenting form of
innovation, developing a record of the innovation process to help identify,
protect, and develop intellectual property.
• Beyond software technology, new trends in manufacturing such as the rise of
the “maker movement” and additive manufacturing have also lowered the
threshold to bring innovations to market.
In the innovation battle, the winner does not necessarily offer the lowest price or
provide the best thecnology, but often effective competition could be enhanced if an
innovetor could establish its technology as an industry standards.
When speaking about innovation it quickly becomes clear that leadership, commitment
and culture count. While strategy, processes and technology play a large role, people
matter. Having strong leadership for innovation is crucial. In fact, many companies are
putting in place executive-level positions responsible for innovation.
As more CEOs realize that they lack an organizational competency for innovation, the
matter is evolving into a mainstream management competency and discipline. The
bottom line is that formalizing innovation processes improves business value.
Match slogans
“Think different” (1997)
“Designed by … in California”
(2013)
“There is an App for that” (2009)
“Be what’s next” (2011)
"I think, therefore iMac” (1998)
“Your potential. Our passion” (2006)
You’re going to need more popcorn! (2015)
“Where do you wont to go today?” (1987)
Pirates of Silicon Valley
Model
A Comparative Analysis: Apple
Vs. Microsoft
Casu Matteo
Onida Antonio
Pala Stefano
Innovation Management 2014/2015
University of Cagliari
How We Proceed
• Introduction
• Life Cycles and S-Curves
• Porter’s Five Forces as innovation driver
• Apple/Microsoft case presentation
• Conclusions
Introduction
• Demand pull Vs. technology push patterns
• Uniform standardization Vs. de-facto
standardization
• Porter’s Five Forces move innovation strategies
Life Cycle Model
Source: Vernon (1966)
The model depicts the evolution from birth through maturity of
an industry with rich opportunities for product and process
innovation
S-Curves Chart
S-curves visually depict how a product, service, technology or
business progresses and evolves over time. S-curves can be
viewed on an incremental level to map product evolutions and
opportunities, or on a macro scale to describe the evolution of
businesses and industries. Usually the end of one S-curve
marks the emergence of a new S-curve.
S-Curve Charts
Porter’s Five Forces
Case Introduction
Early 80s
IBM was leader in computer hardware
Supply
1981
The first “modern” PC was launched by IBM
with MS-Dos freely powered by Microsoft
1984
Apple launched the first PC with MacOS with
GUI
Case Introduction
1985
Microsoft launched Windows first release
1993
Apple strove introducing the first
pocket pc (Newton PDA)
2000s
Apple’s mobile devices revolution
Apple Strategy
1984
Apple aimed to establish its own standard by not licensing
MacOS to OEM Suppliers
Apple overconfidently assumed its bundle (own
hardware+MacOS) to be stronger than competitors
Apple Strategy
Apple’s strategy failed due to the
overlooking of new entrants in the market
It limited the potential to create a successful
business platform and to gain a competitive
advantage
Apple Strategy
2000s
Apple has accomplished to launch innovative
mobile devices, successfully applying its strategy of
not licensing
Through iPod, iPhone, iPad and ITunes Apple
established a competitive advantage and market
standards
Microsoft Strategy
1985
Windows 1.0 distributed to OEM by
license
Low-price which allowed to reach a
bigger customer segment: particularly
private consumers
Microsoft Strategy
2000s
Microsoft has moved to mobile sector since windows
mobile through to windows phone and acquisition of
Nokia to produce Microsoft devices (Lumia series).
Microsoft failed to establish its licensing strategy in
the mobile sector and nowadays is following Apple’s
bundling strategy
Apple Innovations
Mac Pro iMac MacBook
Degree of
innovation
eMac - iBook
iOS devices
PowerBook
Macintosh
1984
1991
1999
2006
2015
Time
Microsoft Innovations
Degree of
innovation
Windows 8
Windows 10
Windows XP
WP8
Windows 95
Windows 1
1984
Windows
Mobile
1995
2002
2008
2015
Time
Conclusion
• Innovation in technological sector is driven by both
technology push and demand pull patterns;
• Innovations derive by specific strategies which are
influenced by Porter’s Forces;
• Innovation depends on previous technology platform;
• Degree of innovation through time could be represented by
S-Curves Charts;
Technology strategies and
standard competition
Comparative innovation cases of Apple and Microsoft
Nelly Eysholdt | Filippo Figus | Juliane Leinweber | Fabio Muscas
 Platform:
Theory
 enables the creation of products and processes
 that support present or future or past developments
 Life Cycle Model | Phases:





Product Development
Market Introduction
Growth
Maturity
Decline/Stability
 S-curve Phases:
 Reflects the adoption, diffusion and market acceptance of innovation. In other words, it shows the
“innovation life cycle” hat can be describe by the forces of technology push and demand pull and their
interaction.
 Technological standards
 an established norm or requirement e.g. to technical systems
 To establish uniform engineering or technical criteria, methods, processes and practices
Product Life Cycle | s-curve
Apple
Cases and Resume
 Was a market leader in the 1970s but
lost it‘s position in the 80s, because
it‘s strategy of not licensing MAC
OS during the launch of Macintosh
 Launch of Lisa failed because of

Microsoft


being a closed system
 Has regained it’s competitiveness by
the success of the iPhone
(envisioning of mobile internet)

 The strong technology platform enables
it to successfully launch subsequent
innovations of PC, iPod, iPhone,
iPad
 Attempts to establish is own
technology (tablet IOS) as an
industry standard

Established a technology platform which
allows it to launch further related software
products (operating system, PC‘s servers
software).
Established it‘s business platform by
pursuing a low cost licensing strategy of
Windows via OEM arrangements with
the Pc manufactures.
The acquisition strategy to purchase
software firms allows Microsoft to remain
competitive in the operating system
business and let establish Windows as an
industry standard.
The wide adoption and become a de facto
standard helped Microsoft to enter in new
business such as the internet browser,
web TV, computer games.
Leasons learnt | Conclusion
Apple
Mac development projects
launch faster, smaller and much
less expensive computers
Reconceptualised the PC and
transformation into the iPad
 Microsoft
 Consistently improving
the technology platform
and business platform by
purchasing/aquiring
software firms whose
software applications
could be bundled into the
windows operating
system
In order to create competitive advantage it is important to establish an industry standard
Thank you for your attention!
Questions?
MICROSOFT VS
APPLE
TECHNOLOGY STRATEGIES
CASE STUDY:
GIULIA CUCCU
+
APPLE
MICROSOFT
Acquisition Strategy (purchase software firms and soft.
designer):
• - Allow to remain always competitiveness in the operating system
business
Windows Os as industry standard
• - Control delivery channels
• - Own the customers
• - Continuing advantage in the system market
BRAND
STRENGTH
Established
TECNOLOGY
PLATOFORM
+
S CURVE for Apple and Microsoft
This curve reflect the adoption , diffusion and market acceptance of innovation.
100
This curve is based to the
improving technology from SMS to
mobile Web and mobile client
application.
75
50
25
Innovators
2,5%
Early
adopters
13,5%
Early Majority Late
34%
Majority
34%
Laggards
16%
0
BARGAINING POWER OF BUYERS
- Various market offers
- Demand for extra features- product
differentation
- Product brand
BARGAINING POWER of
SUPPLIERS
Industry competitors
and
Rivalry among existing firms
- Technology suppliers
- Size on mp3 player based on chip capacity
- Fragmented supplier industry
THREAT OF SUBSTITUTE
PRODUCTS
- Discman
- Minidiskplayer
- PDAs- Portable radios
- Netbooks
- Laptops
MICROSOFT consistently improves its
technology and business platform by
purchasing/acquiring software applications
could be bundled into the Windows
operating system.
APPLE after the experience with the
Lisa project, launch smaller, faster and
much less expensive computers. Apple
used the knowledge learnt from other
projects to build the product champions (
ex. Ipad )
THANKS FOT THE
ATTENTION
Analysis of the S – Curves
technology strategies and standard competitionComparative innovation cases of Apple and
Alexandra Čipáková
Microsoft
Gabriela Ferenczová
Theoretical framework of S - Curves
• Innovation is a process of transforming the technology frontier into the
commercialised product/process innovation in a competitive market. The
innovation process characteristically exhibits an S pattern. The stages along
the S-curve are characterised by the efforts of the innovator to adapt a
technological development (invention) for transformation into an innovation
(commercial product). The innovation process can be described by the forces
of technology push and demand pull or their interaction as triggers of
innovation.
The product life cycle (PLC) model
• Vernon's Product Life Cycle is a classical model explaining the development as a pattern
of product substitution (the S-curve pattern).
• The phases along the PLC reflect innovation diffusion — the progress of
product/process innovations along the stages of introduction, growth, maturity and
decline.
• PLC shows a progression of innovation from process innovation to product innovation.
• The process of technological change in the video recording industry represents
a succession of S-curves.
• The period of innovation life cycle consists of technology substitutes to
extend the life cycle of technology .
• The envelope of S-curves describes the progress of innovation in the form of
the improving video system over time.
• The successive S-curves represent the process of technological changes from
magnetic recording technology to Blu - Ray disc technology.
• The process of technological change presents a progress from the
magnetic stripe technology towards the smart card technology.
• The process of bank card innovation diffusion presents a parallel
substitution of technology (the two technologies are not independent as
the smart card technology has not yet taken over the existing magnetic
stripe card technology).
• The level of technology adoption and diffusion can be seen as an S-curve.
• The technology S-curves reflect the adoption, diffusion and market
acceptance of innovation.
• In response to the customers' demand for web-based applications and
third-party applications, the S-curve of technological innovation progresses
from mobile e-market towards mobile banking to provide value-added
web-based applications.
ECHNOLOGY STRATEGIES AND STANDARD COMPETITION
Comparative innovation cases
of Apple and Microsoft
Riccardo Contu
Università degli studi di Cagliari 04/2015
THEORETICAL FRAMEWORK
• INNOVATION PROCESS
• FIVE FORCES PORTER’S APPROACH
• TECHNOLOGY STANDARDS AND PLATFORM
• STRATEGIES IN MANAGING TECHNOLOGICAL INNOVATIONS
Innovation is a process of transforming the
technology frontier into the commercialized
product/process innovation in a competitive
market
• INNOVATION PROCESS
The innovation process usually follows an Spattern.
The stages along the S-curve are characterised by
the efforts of the innovator to adapt a
technological development (invention) for
transformation into an innovation (commercial
product). The innovation process can be
described by the forces of technology push
(Schumpeter, 1939) and demand pull
(Schmookler, 1962) or their interaction (Freeman,
1982) as triggers of innovation.
• FIVE FORCES PORTER’S APPROACH
A firm's strategy is influenced by these
forces and suggests the firm to find a
position in an industry to defend itself
against the forces or to influence them in its
favour (Porter, 1980)
• TECHNOLOGY STANDARDS AND PLATFORM
The ability to establish standards
could provide a technology
platform allowing the innovation
to progress from a firm level
towards a country or even a
global level.
• STRATEGIES IN MANAGING TECHNOLOGICAL INNOVATIONS
Firms, according to the resource-based approach, compete according to
their different capabilities. Strategies to cope with a changing competitive
environment are associated with the firm's capabilities. Under the model of
Schumpeterian competition, being the first mover or follower in the industry
not only influences the extent of innovation adoption but also the benefits
secured. When the resources and capabilities required in the diffusion of
innovation are not available
within an economic entity, it is likely that innovators adopt collaborative
strategy and vice versa.
CASE STUDY OF APPLE AND
MICROSOFT’S TECHNOLOGY
STRATEGIES
WHICH EVENTS ARE HIGHLIGHTED BY THE RED ARROWS?
• MICROSOFT WINDOWS
• MICROSOFT WINDOWS 95
• iPHONE
95
• iPHONE
With these products Microsoft first and Apple further managed to reach a
competitive advantage in specific sectors for their platform.
95
• iPHONE
With these products Microsoft first and Apple further managed to reach a
competitive advantage in specific sectors for their platform.
PORTER’S FIVE FORCES ANALYSIS
CONCLUSIONS
The case study has shown that the innovators’ use of strategies is consistent with the
potential of platform creation;
The ability to establish the innovator’s own technology as standard provides a route to
competitive advantage. This is due to the fact that standards can help create network
externality effect through compatibility and moreover standards help tie in the
customers since niche basis. and needs to be consistently upgraded or renewed to
maintain advantage;
Technology platform emerges from a combination of strategies and needs to be
consistently upgraded or renewed to maintain advantage.
ACCORDING TO
YOU…
WHO WILL BE
NEXT ?
THANK YOU FOR THE
ATTENTION
competition:
Apple vs Microsoft
Roberto Arru, Luca Pisanu
Theoretical process
Strategy
Technology standard
Technology platform
Competitive advantage
Strategy
• In the early years of competition, Apple
in its launch of Macintosh adopt the
strategy of not licensing Mac OS to OEM
hardware suppliers
As a result, the Mac OS failed to take off
as quickly as Microsoft Windows
• By pursuing a low-cost licensing
strategy, Microsoft could license its
Windows via OEM arrangments with the
PC manufacturers
Suddenly Microsoft Windows became the
facto leader in the operating system
market
The S-curve
100
Microsoft
Apple
50
0
Innovators
Early adopters
Early majority
Late majority
Laggards
Technology Standard and Platform
The strategy of not licensing
lowered Apple’s capabilities and
opportunity
to
became
standards and limited the
potential to create a business
platform
The wide adoption and de facto
standard of Microsoft Windows
operating system then served as a
strong platform that helped
Microsoft to successfully launch
others products
Apple’s competitive advantages
•
Apple Store
The largest Apple center where you can find
everythings products and the top experts in the
industry
•
Lovemark
The consumer becomes a testimonial of the brand
Apple products. They are
visually appealing,
functional and easy to use
•
Partnership
Apple has also partnered with some brands not
related to the world of computer science and
technology as Nike, Mercedes and The 20° Century
Fox
•
Premium Price
It has a policy of common prices for each
category of its other. Apple applies to its
products a premium price justified by
innovative product, unique design and brand
Microsoft’s competitive advantages
• Low-cost prices
Microsoft could enjoy
a continuing
competitive advantage from its ability to
dominate the pc industry
• Connectivity with multi-systems
Software companies see Apple’s products
compatible with their applications
• Powerful technology
Different types of electronic products as
games, phone, watch etc…
Thanks for your attention!!!

Technology strategies and standard competition

Transcription

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