While many marketers believe that
market segmentation is the `be all and end all' of growth, technological
change is perhaps growth's greatest catalyst. Numerous examples can be cited from
the industry to support this claim. First, technological changes have enabled
the growth of Microsoft from a fledgling company to the colossus of the
computer industry. Second, the emergence of
Internet-enabled products (e.g., Walkman, Washers,
etc.), suggests that technology creates new growth markets. Third, the meteoric
rise of Amazon and Dell demonstrates how technological changes propel small
outsiders into market leaders.
Currently the topic of technological evolution has been studied primarily in
the technology management literature. The central premise in this literature is that
the performance of a new technology starts below that of an existing technology,
crosses the performance of the older technology once and ends up at a higher plateau, in
the process tracing a single S-shaped curve. There is scattered empirical support for this
premise and limited theoretical support for
various aspects of the S-shape curve (e.g.,
Foster, 1986; Utterback, 1994a; Christensen,
1997). Nevertheless, belief in this premise is so
strong that it has become a law in the strategy literature. Numerous authors have
derived strong managerial implications about this premise (e.g., Foster, 1986;
Christensen, 1997). They have warned that even
though managers might be able to squeeze out an improvement in performance from a
mature technology, the improvement is typically costly, short-lived and small. Thus,
the primary recommendation is that managers quit a maturing technology and embrace
a new one to stay competitive. |
