Assignment on S-Curves

Topics: Crossing the Chasm, Technology, Technology adoption lifecycle Pages: 5 (1721 words) Published: December 10, 2010
According to Richard N. Foster (1985), S-curves are a phenomenon showing the typical paths of product performance in relation to investment in R&D. Technology S-curves are usually showing the performance of technology against time. Technology S-curve is different from product life cycle curve because its fluctuation is hardly predictable and highly dependable on the technological product or service improvements. According to Clayton M. Christensen (1992) in Exploring the limits of the technology S-curve, the technology S-curve is a useful framework describing the substitution of new for old technologies at the industry level. Christensen examines the usefulness of S-curve framework for managers at a firm level in planning for new technology development while using the information from the technological history of the disk drive. In most cases technology S-curve is used for high-tech products where the innovation of technology is main success factor directly influencing demand for that product. While using this framework we must always remember diffusion of innovations theory, pioneered by Everett Rogers, which posits that people have different levels of readiness for adopting new innovations and that the characteristics of a product affect overall adoption. Rogers classifies individuals into five groups: innovators, early adopters, early majority, late majority and laggards. In terms of the S-curve, innovators occupy 2.5%, early adopters 13.5%, early majority 34%, late majority 34%, and laggards 16%. Such theory makes technology S-curve less flexible because the real effect for the demand is lagged (Figure No. 1) Figure No. 1. A graph of Everett Rogers Technology Adoption Lifecycle model. Describe two different types of technology S-curves. Explain how they differ and why they have the shape they do? There are two different types of S-curves which differ in fluctuation intensity and shape depending on what kind of product or service company is providing and what strategies are used to introduce or improve that product/ service. Those S-curves can be separated as ‘rugged’ (Figure No. 2) and ‘smooth’ (Figure No. 3). Rugged S-curves have more intense fluctuation because companies innovate by using high risk – high return tightly coupled strategies such as shotgun sampling. Such strategies have some randomness which makes them very risky and affordable only for big companies because costs of such strategies are accordingly high. Of course, they are only random to some extent because those companies already have a good knowledge of their industry and technologies but invention of something absolutely new requires taking some trials. In most cases, such products or services are highly independent and hard to copy. Such strategies were used by Merck which is one of the biggest pharmaceutical companies in the world. They developed methods to screen and test huge numbers of potential drugs simultaneously. In their case the research was too slow especially because researches were not fully aware of the business environmental conditions. Another big company, BMW, conducted tests on their cars and motorcycles in virtual environment conditions with the goal of stability and safety improvements. Such technology was efficient because they managed to cut costs by creating realistic situations in virtual environment. When using such strategies company must be a veteran in its industry and have perfect knowledge of their technology limitations, industry standards and requirements. .

Figure No. 2. Example of ‘rugged’ S-curve.
Another type of S-curves is ‘smooth’. Its fluctuation is more stable because companies use modular strategies which are not so risky and are oriented to product improvements rather than installments. Moreover, products or services which are developed by such strategies are more easily copied so company should either be innovator or try to find other solutions on product’s/ service’s lifecycle peak....

References: * Richard Foster (1986), Innovation: The Attacker 's Advantage;
* Clayton M. Christensen (1992), Exploring the limits of the technology S-curve;
* Everett M. Rogers (2003), Diffusión of innovations;
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