Innovation

CPA

-1

Nayomi Ekanayake Student number M00436434

WORD COUNT 1,532

1) Discuss what determines whether an industry is likely to have one or a few dominant designs? Apply this to Blu-Rays industry.

A dominant design is a strategy that becomes an industrial standard for a specific type of product. As soon as the design develops, the industry gets security and is able to capitalize heavily and in a long-term basis. The dominant designs are not only dogged by its technology alone. Furthermore, the more exposed and compound a product is and more socially and politically questionable, the more its dominant design is influenced by the society. Increase returns to adoption, in the sense when technology is used more and more the more valuable it becomes, and more they use it the more it is been improved. When the technology is used more, the knowledge and understanding of the technology accumulate. Two of the primary sources of increasing returns are 1) learning effect and 2) Network externalities. Learning effects

The learning effects will have the utmost influence on the cost and output, in the sense producers, will be proficient to making it more effective and efficient as the standard technology is accepted and used for a long term basis. The cost of production declines as individuals become more efficient with the increased use. When the learning curve increases it also leads to an increase in the performance and a decline in the costs due to low wastage levels. Network externalities Network externalities is the significance created through the installed based and the compatibility factors, which Blu-ray had won over with a high in house installed base of content consumers, and winning over the compatibility by strategies such as through game console business, complementary hardware, and the massive provision of multimedia contented producers.
Nayomi Ekanayake M00436434

Multi-dimensional value framework The multi-dimensional value framework studies various components of a new technology that will create the overall value that is being accessible to the customer. It comprises of three main components: Standalone technological utility, Installed base and the complementary goods availability. Using this value framework firstly the standalone value of Blu-ray should be considered, and thereafter analyze the value created by the mixture of the stand-alone technology with the value of the installed base and the convenience of the complementary goods, which emerges the dominance in the industry. According to the multiple dimensions of value framework, the war between Blu-ray and DVD, the old standard format, shows us that DVD has still the power in value for the costumers due especially to its larger installed base. The DVD format, which is surely in the precise phase, has reached the maturity that leads to a large availability of complementary goods and to triumph dominant preference within the consumers. Meanwhile, Install base gets a high rank with new customers of Blu-ray. That fact makes Blu-ray dominant in the market. In order to attract more consumers, Sony may introduce new technologies for people who are using Blu-ray technology to upgrade it to new features. Comparing to other technologies Blu-ray has more advanced technology. So people who are currently using other technologies will switch to Blu-ray in order for them to get the most advanced technology and to get the experience of it. Therefore it increases Blu-rays install base as well.

Nayomi Ekanayake M00436434

2) In the Honda case, hybrid vehicles were developed by powerful firms, such as Honda. Using Honda as a case example, discuss the advantages and disadvantages, a) Firms as innovators The firm can relish the first mover advantage and could gain sufficient revenue for the paticular innovation if the product gets successful before any other firm can duplicate it or make a substitute for it. A firm can also create a exclusive process flow or an improvement on to a current product or service in offer. When we take Honda firm as an example they have been doing researches for over so many years and it will also be an added advantage for them to produce new products. The innovative product may lead to generate an improved product or service value for its customer. The new creation may also rise in the returns and decrease the production cost of the product. The innovation/new creation results can be limited to the firm and may have a possiblity of not cross the designing rooms of the same firm. The innovation may be expensive and at times not be accepted among the market or the commercial environment. A huge benefit will be the capital they have to innovate and produce new products. finally they have competitive advantage and also because of the brand image they have their innovation could be succesful. b) Universities as innovators Universities may lead to improved knowledge sharing in terms of innovative knowledge tools, new educational systems with wider visions to clarify the thought process of a student. In universities they always tend to follow the current trend in the external environment and work on innovating products. Which means the students who are in universities will be more competitive in their specific core field of study. A university with healthier teaching and learning practice will deliver a better innovation and a better innovator amongst other worthy innovator forms a better firm. Also when we take a university there are students with many different ideas but for them to innovate new products the funds available are limited this may be a disadvantage for universities who try to innovate new products. Finally when universities act as innovators there will be so many job opportunities for their university students as they have different talents and innovations which can be an opportunity. But the Universities cannot appropriately market their research when compared with firms.
Nayomi Ekanayake M00436434

c) Government institutions as innovators Governments innovation ideas may lead to superior flow of funds and decrease of the project execution time. The restructurings performance process is highly essential in countries like India, which are reflected as most expanded in relation of religion, language and area. The innovation may in the form of public-private collaboration projects a fresh system of tax reform, a new project to another transport system in a solidly populated city. When we look at the disadvantages of this, lack of financial discipline may lead to less efficient development process etc. May also lack complementary resources to implement innovation in the marketplace. They may not be able to discover skilled people to work with them as majority of people desire working for private firm. May also lose a proportion of the capital if the research is not a success. It can increase the rate of taxation to re-claim the capital later snowballing the cost of living. d) How would Honda benefit from the involvement from b) and c) When Universities and Government join and innovate products together then there is extensive knowledge and other resources and can often invest in a long term basis or for any risky projects without any hesitation for purposes of advancing science (rather than being pressured upon speedy profitable returns.) Many universities encourage their students on research and development and they usually triumph research funding through publication of their research results now as the government is also innovating together Honda will be highly benefited from the research and development side and also from the funding side. When they are jointly innovating, the government acts as a public entrepreneur and project consumerist in addition to its traditional regulatory role in setting the rules of the game so Honda will benefit from the governments involvement. Since the government is involved, licensing and second sourcing agreements will be easier. The strength of protection mechanism is also there for an example patent rights, copy rights and also trade secrets. Government invests for researches in their own laboratories and their science parks. Because of these factors Hondas production and research cost will decrease and will be benefited. Honda will be benefited with the scientific background and the free labs offered from the universities and also the scientists who are already available for their projects, and not forgetting the science parks and the incubators that are available for research entities. When we take the political level in to consideration when the government is involved Honda will have a competitive advantage over others, and also the raw materials and other sources which is needed to carry out certain tasks can be easily imported and outsourced without any obligations. Last but not least the collaboration between the university and the government will have a huge impact on Honda and will be highly benefited throughout the project.
Nayomi Ekanayake M00436434

Reference
Anderson, Philip and Michael L. Tushman (1990), Technological Discontinuities and Dominant.

Arthur, Brian W. (1989), Competing Industries, high Returns, and Historical Occasions, Economic Journal, 99 (March), 116-131.

BlogSpot website "Sources of innovation" (online) available http://farzanalibaloch.blogspot.com/2008/08/innovation-and-technologymanagement.html viewed on [26th March 2013]

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Dominant Design, Philip Anderson and Michael L. Tushman, Research-Technology Management, May/June 1991, pp 26-31.

Funk, Jeffrey L., 2003. "Dominant designs advantages," Research Policy, Elsevier, vol. 32(8), pages 1325-1341, September.

Highered.mcgraw-hill (2011) "Standard Battles and Dominant Design" (online) available at: http://highered.mcgrawhill.com/sites/007338156x/student_view0/chapter4/ viewed on [25th March 2013] Mighty student (2011) "advantages and disadvantages of sources of innovation" (online) available at: http://www.mightystudents.com/essay/advantages.disadvantages.individuals.5747 3 viewed on [28th March 2013]

Nayomi Ekanayake M00436434