1.Of the three types of uncertainty that characterize high-tech markets, which type is ESRI experiencing most acutely? Elaborate and provide strategic implications for ESRI. In Chapter 1 of
Marketing of high-technology products and innovations, the authors state thatthere are three characteristics that all high-tech environments have in common. They areidentified as market uncertainty, technological uncertainty, and competitive volatility (Mohr, J.,Sengupta, S., & Slater, S. (2010). ESRI appears to be experiencing the competitive volatilitymost acutely. Competitive volatility is defined by Mohr, et al as “intensity in the degree of change in the competitive landscape and uncertainty about competitors and their strategies,”(2010).There are three components in the competitive volatility uncertainty. The first is the uncertaintyover who will be the new competitors in the future. ESRI experienced this firsthand with thecompetition they received from Google Earth, Microsoft and the virtual globe. New competitionto the industry can be the cause of disruptive technologies. Oftentimes, their new innovatedtechnologies can make the existing technology obsolete.The next component of competitive volatility is what competitive tactics or strategies will beused by the new competitors. New competitors may render the existing rules or business strategies useless. Newcomers may be able to change the way of doing business for everyoneinvolved. Once again, this was the case for ESRI. ESRI and the other competitors used thebusiness model of gaining revenue from the sale of their GIS software. However, the newcomers(Google Earth and Microsoft) relied on advertising revenue instead of revenues from GIS sales.The final component asks the question “what product will the existing industry compete with”, inthe case with ESRI, the newcomers were able to offer products that did not require any GIStraditional software. They were able to offered virtual globes from the internet.Due to the...
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