Limitations of the S-Curve

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Assignment 2
Limitations of the S-Curve

1.
Companies use the technology S-curve analysis as a tool in planning a technology strategy for the organization. It has been observed that technology develops in an S-curve pattern. In the beginning progress for any new technology is slow. As an expertise in the technology builds up, progress moves at a rapid pace. After a while, however, the technology matures and progress slows (Shane, 2009). S-curve analysis is not only used to plot the development of a new technology but also highlight the point of diminishing returns. At the diminishing return point, organizations should be looking into new technology alternatives. However, there are limitations to the S-curve analysis: Limitations of the S-Curve

* The model does not give any clear hints to managers on how to act/react in the face of technological discontinuity * It cannot be inferred from the model, how big the gains will be from new technologies. * The model does not imply when to invest in new technologies and abolish the current one. * The model does not imply how a new technology will look like and by whom it will be introduced. * The model is a generalization of observed technology paths. In reality, the size and structure of the S can vary. Source: http://www.12manage.com/description_s_curve.html

Because of the above limitations, several improvements or expansions to the S-curve model have been introduced. TheAbernathy-Utteback model is such an expansion. It defines the developments of new technology in two phases: the fluid phase and the specific phase (Shane, 2009). There are also other models in use to better predict technology development cycles and the times frame to invest in alternatives. 2.

A common definition of technology strategy is “the approach that a firm takes to obtaining and using technology to achieve a new competitive advantage or to defend an existing competitive advantage against erosion” (Shane, 2009, p. 9)....
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