What are some aspects of a firmâ€s strategy for dealing with change when it considers Creating New Markets?
Creating a new market can be challenging, yet rewarding if a firm can successfully develop a disruptive technology using proper resources and capabilities. When a firm is assessing a potential new market, there are three strategies to consider. A high-end disruption strategy could result in new markets and new players, redefining an industry and the rules and competitors who engage in the market (Carpenter & Sanders, 2008). The high-end disruption can often push out incumbents giving rise to new entry competitors, but competitors too can use this strategy to gain market lead (Carpenter & Sanders, 2008).
Another strategy a firm can utilize when considering new markets is the low-end disruption strategy. This strategy targets less desirable competitors, by focusing on the low end of a market (Carpenter & Sanders, 2008). This strategy can often be successful because it allows a firm to enter a competition market, gain customers, and often is ignored by competitors, allowing for small efforts over time to grow the business. “Incumbents tend to ignore such new entrants because they target the incumbents†least valuable customers.†(Carpenter & Sanders, 2008, p. 182). This strategy adds features or offers a product that is not top of the line, and can usually enter the market and then improve on various aspects of the product or service to generate a brand name and image.
The third strategy a firm can utilize when assessing new markets is a hybrid disruption approach. This approach incorporates the idea of new-market with low-disruption strategies (Carpenter & Sanders, 2008). This strategy seems to be a more conservative approach to strategically entering a new market, by implementing low-disruption technology, while targeting a new market in the process.
After reading the article by Jaruzelski, Staack and Goehle (2014), it seems that many firms recognize the importance of innovating breakthrough technologies, but only 27% feel they are succeeding at executing such R&D, and new product development practices. This seems low when you consider the tremendous opportunities a firm can gain when utilizing breakthrough, disruptive technology to gain competitive advantage. Technology allows a firm to stay competitive in the future. The criticality of investing in R&D is important, but what Jaruzelski, Staack and Goehle (2014) point out is that the amount of spending for R&D doesnâ€t necessarily equate to a successful innovation. In fact, R&D according to Jobs is not about money, and more about the internal workings of the company (As cited in Jaruzelski, Staack & Goehle, 2014). “Our 10-year analysis shows that companies have been raising their innovation game by focusing on two areas: business capabilities, and organization and processes.†(Jaruzelski, Staack & Goehle, 2014, p. 7). The capabilities focused on innovating to customer needs, aligning with business strategy and developing and retaining people within the company, holding a good understanding of the new product or service technology, and striving for lean product development (Jaruzelski, Staack and Goehle, 2014). All these aspects align with what weâ€ve been learning thus far in this class.
Jaruzelski, Staack and Goehle (2014) specifically mention the importance customer needs and wants play into business development and new product development these days. Customers are more involved than ever before in helping establish the dominant product design for firms by sharing their needs and wants and having firms develop to them. According to Gallagher (2007), “As it stands now, it seems the dominant design concept does not achieve its full potential because it is simply what winds up being adopted.†(p. 378). Although customers drive dominant product designs, firms still seem to be missing the target on developing to what customers need and want are.
The movers and the shakers are the firms who practice the need seeker strategy (Jaruzelski, Staack and Goehle, 2014). These firms identify customer needs early, develop to the needs, and are first to market to prove to customers they have solutions and are listening to their customers. “In our 2011 study, we found that what sets Need Seekers apart is their ability to execute on their strategy—to combine all the elements of innovation into a coherent whole, with a culture that supports innovation.†(Jaruzelski, Staack and Goehle, 2014, p. 12).
How can the Value Curve be used to anticipate change?
Changes in an industry can be challenging for a firm to anticipate. New, disruptive technologies can create new markets or redefine pre-existing markets. These disruptive technologies can push old firms out of positioning and can bump market leaders out of markets, allowing new entrants to enter and compete. The value curve can be a tool a firm can use to anticipate changes in an industry, and prepare the firmâ€s strategy for the change. “The value curve helps managers visualize how new disruptions might be targeted.†(Carpenter & Sanders, 2008, p. 182). The value curve illustrates the key success factors as perceived by incumbents along with the level of delivery of the major groups of firms (Carpenter & Sanders, 2008). “Being able to visualize how competitors perform along these differentiators helps reveal the assumptions being made by the industry.†(Carpenter & Sanders, 2008, p. 183). By having a clear picture of competitors†attributions, industry performance, and future firm assumptions on the market and future state, a firm can develop a strategy to defend or pursue new market opportunities and anticipate change.
Jaruzelski, Staack and Goehle (2014) emphasize the importance of innovation, and using market research along with customer feedback to develop new products and services. Using the value curve can help a firm gain some predictability of competitors†activities, and in addition should use feedback by customers, and the resources and capabilities internally to innovate towards future opportunities in the market.
According to Jaruzelski, Staack and Goehle (2014): One priority that Need Seekers cited in our survey this year as being important to their future success—open innovation—complements their approach by enabling them to seek new ideas and insights from a networked community beyond the borders of the company and its traditional partners.†(p. 14).
In order to define new ideas, a firm must understand what competitors are doing, and any market changes that may be coming. The value curve helps a firm anticipate such changes, and can also help guide innovation decisions for the business.
Carpenter, M. A. & Sanders, Wm., G. (2008). Strategic management: A dynamic perspective. Upper Saddle River, NJ: Pearson Prentice Hall.
Gallagher, S. (2007). The complementary role of dominant designs and industry standards. IEEE Transactions on Engineering Management, 54(2), 371-379.
Jaruzelski, B., Staack, V., & Goehle, B. (2014). Proven paths to innovation success. Global Innovation 1000, 77(2014), 1-16. Retrieved from https://www.strategy-business.com/media/file/00295…
Do you need a similar assignment done for you from scratch? We have qualified writers to help you. We assure you an A+ quality paper that is free from plagiarism. Order now for an Amazing Discount! Use Discount Code “Newclient” for a 15% Discount!NB: We do not resell papers. Upon ordering, we do an original paper exclusively for you.
The post please-rewrite-in-your-own-words-and-add-some-research-into-each-thought-with-your-own-references-9 appeared first on Essay Fount.
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but you proved you are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 11***| Rating: ⭐⭐⭐⭐⭐
"This company is the best there is. They saved me so many times, I cannot even keep count. Now I recommend it to all my friends, and none of them have complained about it. The writers here are excellent."
"Order a custom Paper on Similar Assignment at essayfount.com! No Plagiarism! Enjoy 20% Discount!"
