Strategies to Commercialise Breakthrough Technologies
20 Pages Posted: 2 Aug 2009
Date Written: 2007
In this paper we focus on the different strategies used by companies during the process of development and diffusion of breakthrough technologies. We distinguish three phases in this process and show that, depending on the length of these phases, pioneers might be confronted with completely different scenarios just after the invention of a breakthrough technology. Different strategies to commercialise breakthrough technologies are also distinguished: a mass market strategy, a niche market strategy and a wait-and-see strategy. We show that the result of these strategies can diverge considerably depending on the scenarios. These strategies are studied in detail for the cases of the photocopier, video cassette recorder, digital camera and microwave oven. Several conclusions are derived from the cases. The main actors involved in the development and diffusion of breakthrough technologies change considerably during the different phases. The market adaptation phase is the most turbulent among all phases: many actors enter and leave the market over a relatively short period of time while making substantial losses. Customer segments and user applications also change considerably during the phases. Usually, niche markets emerge first, i.e. specific customer segments using the technology in specific applications, which diverge considerably from the mass market applications that emerge later. In our cases, pioneers of breakthrough technologies never create a mass market. The pioneers that do survive stick to their niche market strategy. After the pioneer, multiple entrants adopt a similar strategy but many of them have to leave the market later. Only a small number of them survives, either by consistently adopting a niche market strategy or by creating a mass market. The strategy of the entrants that manage to create a mass market is discussed in more detail. The management implications of these findings are large. Companies should be well aware of which phase they are in; their strategies need to be adapted to the phase of the process, strategies that appear to be successful in the market adaptation phase, for example, can be detrimental in a later phase. The results of the case studies also indicate that most successful actors consistently pursue one strategy.
Keywords: breakthrough technology, strategy, breakthrough innovation, photocopier, video recorder, digital camera, microwave oven
JEL Classification: O32, M13, L1
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