strategy in technology intensive companies

12
Hanatziv St., Tel-Aviv 67015, ISRAEL 03-5108801 03-5108802 @ [email protected] www.mitzuv.com

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Page 1: Strategy in technology intensive companies

Hanatziv St., Tel-Aviv 67015, ISRAEL

03-5108801 03-5108802 @ [email protected] www.mitzuv.com

Page 2: Strategy in technology intensive companies

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Complex and Dynamic Market Chains

Rapid Market Changes

Shrinking Product Life Cycles

Unique Cost Structure

Network Effects

Page 3: Strategy in technology intensive companies

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There is less vertical integration, resulting in long market chains with many organizations along the chain

At the downstream end there are sometimes many niche market opportunities

Market chains are in many cases unstable, with many companies moving up and down the chain

Successful strategies require developing strong relationships with various players along the value chain

Relationships can be focused on sales, marketing, operations or technology

Page 4: Strategy in technology intensive companies

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Page 5: Strategy in technology intensive companies

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New emerging technologies and disruptive technologies create changes , resulting in discontinuities

Disruptive, enabling technologies can invalidate products or entire business models

Difficulty predicting the evolution of customer feature demands and use models

Strategic decisions cannot rely on conventional market research and assumptions

Strategic plans must be dynamic and allow for rapid changes and modifications or be able to withstand change

Page 6: Strategy in technology intensive companies

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Page 7: Strategy in technology intensive companies

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Rapidly shrinking product development cycles allowing fast introduction of new features and products creating cannibalization

Too many features are developed – resulting in high development costs and complicated products

Shrinking product/technology Adoption cycles resulting in shorter product life span

Developing a platform strategy that will allow introducing

new products on the platform

Achieving rapid high sales volume by expanding to many global markets and offering low prices

Page 8: Strategy in technology intensive companies
Page 9: Strategy in technology intensive companies

Innovation

Adopters Visionaries Pragmatists Conservatives Laggards

2% 5% 40% 40% 13%

L I f e C y c l e

The Chasm

Follow instincts

Revolutionary

Rule Breakers

Avoid Crowd

Risk takers

See future

possibilities

Analyzers

Prefer steady

change

Rule followers

Crowd followers

Avoid risk

See today’s

problems

Page 10: Strategy in technology intensive companies

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High upfront fixed costs of research and development and low marginal production costs

Results in high priced products upon introduction with rapidly dropping prices

Companies must achieve high volume sales quickly, resulting in strong price competition

Strategies must identify means for reducing upfront fixed costs, such as outsourcing

Marketing must focus on achieving high volumes quickly

Page 11: Strategy in technology intensive companies

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The value of a product or service to the user depends on the number of other users or if more complements become available

Largely rely on standardized or competing platforms or components developed by other vendors

Encourages companies to invest heavily to become industry standards, or at least to comply with standards

It is common for companies to give away a basic version of their product to encourage adoption and become the standard

The most successful companies are those who build multi-sided platforms (MSPs), which spawn large ecosystems of users and suppliers of complementary products and services

Page 12: Strategy in technology intensive companies

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1. Lack of Market Segment Focus

2. Excessive Pace of Product Improvement

3. Incomplete solutions

4. Too many features

5. Channel mismanagement

6. Failure to Establish the Right Competitive Barriers

7. Misinterpretation of the Technology Adoption Lifecycle Model

8. Irrelevant Market Research

9. New development vs. product customization