To be successful in emerging technology driven industries, companies usually hav
ID: 436992 • Letter: T
Question
To be successful in emerging technology driven industries, companies usually have to fashion a strategy that includes such strategic elements as
A) avoiding the “first mover disadvantages” associated with making early commitments to alternative technologies, wider product selection, different styling, or new distribution channels.
B) building core competencies and competitive capabilities rapidly so as to avoid having to enter into strategic alliances and partnerships and thus share the firm's potential long-term profitability with outsiders.
C) pushing hard to perfect the technology, improve product quality, and develop additional attractive performance features.
D) charging first-time buyers a premium price (to help grow revenues quickly) and being a technological follower (so as to conserve scarce financial resources).
E) not cutting prices until buyer demand really mushrooms and being a late-mover in introducing new products (so as to avoid the costs and risks of introducing something that turns out to be a bust in the marketplace).
Explanation / Answer
The correct answer is B. First mover disadvantages are minimized in a fast moving environment such as emerging technologies. In addition, early movers in these fields build name recognition that can help secure market share, have the opportunity to lock up talent and manufacturing processes, and build their core competencies quickly and move on to product improvement, staying ahead of the competition. Doing so establishes a barrier to entry for imitators who can only compete on a me-too basis. New technology that is unique and fills a genuine need is somewhat price insensitive but late movers are forced to overcome name recognition and the more advanced stage of development of an early adopter.
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