The Technological Conundrum: How Rapidly Advancing Technology Can Lead to Commoditization

36 Pages Posted: 21 Mar 2015

See all articles by Tat Chan

Tat Chan

Washington University in St. Louis - John M. Olin Business School

Ravi Dhar

Yale School of Management - International Center for Finance

William P. Putsis

University of North Carolina (UNC) at Chapel Hill - Marketing Area

Date Written: March 19, 2015

Abstract

Much of the recent empirical IO research has been conducted in the context of relatively mature, stable (often consumer packaged goods) markets. In these markets, consumer preferences and competitive interaction are often characterized by relatively stable patterns over time. In contrast, modeling and estimating analogous patterns in rapidly changing technology intensive industries, where brand preferences and technology evolve rapidly, can be challenging. Our primary objective in this research is to build on recent developments in econometric estimation and modeling to assess the time varying shifts in consumer brand preferences in a rapidly changing technology industry. In doing so, we document an interesting technological conundrum – technological advancement can often lead to commoditization. In the Personal Computer (PC) market, this began with differentiation that was initially central to success in a market that has been increasingly commoditized over time. Methodologically, we adopt a factor-analytic approach to model and estimate the evolution of consumer brand preferences over time.

Keywords: High technology markets, brand strategy, evolving consumer preferences, industry life cycle

Suggested Citation

Chan, Tat and Dhar, Ravi and Putsis, William P., The Technological Conundrum: How Rapidly Advancing Technology Can Lead to Commoditization (March 19, 2015). Available at SSRN: https://ssrn.com/abstract=2580902 or http://dx.doi.org/10.2139/ssrn.2580902

Tat Chan (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Ravi Dhar

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520-8200
United States

William P. Putsis

University of North Carolina (UNC) at Chapel Hill - Marketing Area ( email )

Chapel Hill, NC 27599
United States
919-843-6459 (Phone)

HOME PAGE: http://www.kenan-flagler.unc.edu/Faculty/search/index.cfm

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