Strategies for Survival in Fast-Changing Industries
"Strategies for survival in fast-changing industries", by C.M. Christensen et al, Management Science 44 (12), December 1998, pages S207-220
In a fast-changing industry, knowledge of certain type of technologies become obsolete much faster than the other industries, hence it is important to know the different technology strategies which will determine its posterior success. Christensen used the disk drive industry in his paper to illustrate his hypothesis that both the technological and market strategies that an entrant applies are interrelated and that their joint effect is crucial to whether the firm can survive.
One of the strategies that are mentioned in the paper is for firms to incorporate elements of dominant design in their new products to reduce the probability of failure in a fast-changing industry such as disk drives. Yet, I beg to differ.
The adoption of a dominant design in a fast-changing industry will indeed cause the firm to gain a lot of market share. However this will only apply for firms if the change is elements of its products, in Christensen case, the hardware design and function. Despite the changes made, people will find it easier to continue to utilize the product since they are familiar with the basic structure of the product. After all, the basic product has been tested and proven. On the other hand, there are other fast-changing industries which are impacted by their fickle consumer market. For this, the firms have to adapt to the ever-changing environment where consumers' brand loyalty is low. There will be a need to incorporate personalize features into their products to suit the market. An apt example would be the fragrance industry (perfumes) where firms have to adjust to the seasonal changes in preference of the customers. Hence a dominant design will not aid a company to gain market share in this case.
Also, this strategy will only be applicable to firms if identity is not a determining factor for sustainability. In
In a fast-changing industry, knowledge of certain type of technologies become obsolete much faster than the other industries, hence it is important to know the different technology strategies which will determine its posterior success. Christensen used the disk drive industry in his paper to illustrate his hypothesis that both the technological and market strategies that an entrant applies are interrelated and that their joint effect is crucial to whether the firm can survive.
One of the strategies that are mentioned in the paper is for firms to incorporate elements of dominant design in their new products to reduce the probability of failure in a fast-changing industry such as disk drives. Yet, I beg to differ.
The adoption of a dominant design in a fast-changing industry will indeed cause the firm to gain a lot of market share. However this will only apply for firms if the change is elements of its products, in Christensen case, the hardware design and function. Despite the changes made, people will find it easier to continue to utilize the product since they are familiar with the basic structure of the product. After all, the basic product has been tested and proven. On the other hand, there are other fast-changing industries which are impacted by their fickle consumer market. For this, the firms have to adapt to the ever-changing environment where consumers' brand loyalty is low. There will be a need to incorporate personalize features into their products to suit the market. An apt example would be the fragrance industry (perfumes) where firms have to adjust to the seasonal changes in preference of the customers. Hence a dominant design will not aid a company to gain market share in this case.
Also, this strategy will only be applicable to firms if identity is not a determining factor for sustainability. In