The SCurves

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The S-Curves

• Craig S. Galbraith, MBA, MSc, Ph.D.
• University of North Carolina Wilmington
• Mgt 354, Technology Management, Fall 08

Presentation information derived from various
sources, including Henry C. Co, California
Polytechnic and State University and Rebecca
Henderson, MIT
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Recapitulation

• Four major forces that influence the nature of
  industry structure in technology oriented
  industries.
• Learning curves
• Evolution of competition
• Dominant product designs (consumer preferences,
  standards boards, dominant competitor, dominant
  buyer)
• Entry and exit of firms (1st move advantages v.
  follower)
• Technology diffusion (market S-curve)
• Technology change (technology S-curve)

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Technology and S Curves

• Technology -- A process, technique, or
  methodology -- embodied in a product design or in
  manufacturing/service -- which transforms inputs
  of labor, capital, information, material, and
  energy into outputs of greater value.
• Technology Change -- A change in one or more of
  the inputs, processes, techniques, or
  methodologies that improves the measured levels
  of performance of a product or process.
• Many growth phenomena in nature show an S
  shaped pattern
• Any single technical approach is limited in its
  ultimate performance by chemical and physical
  laws that establish the maximum performance that
  can be obtained using a given principle of
  operation.

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Technology SubstitutionEx Read-Write Head (Disk
Drive)

• First Technology incremental improvements to the
  original ferrite-head/oxide disk technology
  enabled manufacturers to grind the heads to
  smaller, more precise dimensions.
• Second Technology thin-film photolithography
  displaced ferrite-heads in most disk drives
  between 1979 and 1990.
• Third Technology magneto-resistive heads.

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8 inch, 5 ¼ inch, and 3 ½ inch drives
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Technology SubstitutionEx Intersecting
Performance Trajectories of Successive Disk
Drive Technologies
Average areal density of all models introduced,
in millions of bits per square inch. Bold entry
indicates year in which the architecture captured
over 50 of total industry shipments in 30-100 mb
drives. Underlined entry indicates year in which
the architecture captured over 50 of total
industry shipment in 100-300 mb.
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New Applications Creates New Opportunities

• The new technology (2) is deployed in a new
  application (B) wherein performance is defined
  differently than it had been in the established
  market, Application A.
• Technology 2 is in fact the superior performer in
  Application B and achieves a measure of
  commercial maturity there.
• At some point in this progression the new
  architecture becomes capable of addressing the
  performance demanded in the original market more
  effectively than the established technology.

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Responding to Strategic Threats

• Who wins? the electronic calculator

Bowmar, Inc originally an LED manufacturer,
designed and manufactured first US, and most
advanced pocket calculator (1971) the Bowmar
Brain (240) Bowmar became worlds largest
manufacturer of calculators in early
1970s Bowmar went bankrupt in 1976 TI, HP, and
Japanese firms dominanted.
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Leading Firms Downfall

• CDC, the dominant 14-inch producer in the OEM
  market, was upstaged by entrants Micropolis,
  Priam, and Shugart in the 8-inch architecture.
• Seagate, Miniscribe, and Tandon entered to
  dominate the 5.25-inch generation, eclipsing the
  former leaders.
• Conner Peripherals and Quantum achieved similarly
  dominant positions in the market for 3.5-inch
  drives relative to the leaders in the in the
  5.25-inch architecture.
• None compete is USB read/write technology

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Where are the major strategic decision points?
New Technology Participation decisions
Maturity
Performance
Contraction decisions
Discontinuity
Takeoff
Expansion and cost management decision
Ferment
Pre-commercial decisions
Pre-dominant design program decisions
Time