innovation technology questions

Innovation technology questions

1 Explain how computer-aided design and flexible manufacturing technologies help create small niches in the market place. Provide an example to illustrate your answer

Answer: Computer-aided design and flexible manufacturing help create small niches in the marketplace by allowing firms to develop and produce a greater number of versions of their products. This means that companies can now tailor their offerings to small niches in the marketplace. For example, in 2012, Toyota offered 16 different passenger vehicle lines under the Toyota brand (e.g., Camry, Prius, Highlander, and Tundra). Within each of the vehicle lines, Toyota also offered several different models (e.g., Camry L, Camry LE, Camry SE) with different features and at different price points. Students’ answers will vary.

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2At a retreat by the Cleveland City Council, community leaders held a discussion on attracting and developing new businesses and increasing employment rates in the city. One leader suggested that the city should consider sponsoring a business incubator. Explain what an incubator is and how this might help the city meet its goals. What other ideas should be considered

Answer: An incubator is an institution designed to nurture the development of new businesses that might otherwise lack access to funding or advice. It allows companies to share costs and resources until they can stand on their own. If an incubator were started in Salisbury, it would help new businesses to grow and prosper. These businesses could then move out to locations of their own and hire local residents as employees. The city would not have to offer tax breaks or compete with other cities for the location of existing companies, but would be growing their own businesses.

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3 How can the s-curves be used as a prescriptive tool? What would be the limitations of this approach?

Answer: Managers can use the s-curve model as a tool for predicting when a technology will reach its limits and as a prescriptive guide for whether and when the firm should move to a new, more radical technology. Firms can use data on the investment and performance of their own technologies, or data on the overall industry investment in a technology and the average performance achieved by multiple producers. Managers could then use these curves to assess whether a technology appears to be approaching its limits or to identify new technologies that might be emerging on s-curves that will intersect the firm’s technology s-curve. Managers could then switch s-curves by acquiring or developing the new technology.

However, there are many limitations to doing this. First, it is rare that the true limits of a technology are known in advance, and there is often considerable disagreement among firms about what a technology’s limits will be. Second, the shape of a technology’s s-curve is not set in stone. Unexpected changes in the market, component technologies, or complementary technologies can shorten or extend the life cycle of a technology. Furthermore, firms can influence the shape of the s-curve through their development activities. For example, firms can sometimes stretch the s-curve through implementing new development approaches or revamping the architecture design of the technology.

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4 Explain what factors characterize the technology trajectory. Discuss the factors that determine the success of a new technology, besides its quality and technical advantage. Include a diagram showing the trajectory and the factor’s influence

Answer: Increasing returns to adoption also imply that technology trajectories are characterized by path dependency, meaning that relatively small historical events may have a great impact on the final outcome. Though the technology’s quality and technical advantage undoubtedly influence its fate, other factors, unrelated to the technical superiority or inferiority, may also play important roles. For instance, timing may be crucial; early technology offerings may become so entrenched that subsequent technologies, even if considered to be technically superior, may be unable to gain a foothold in the market. How and by whom the technology is sponsored may also impact adoption. If, for example, a large and powerful firm aggressively sponsors a technology (perhaps even pressuring suppliers or distributors to support the technology), that technology may gain a controlling share of the market, locking out alternative

technologies.

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5. Even though many aerospace manufacturing firms are very profitable, there are very few upcoming firms. Explain the reason using Porter's five-force model. 

Answer: According to Porter’s five-force model, the threat of potential entrants is influenced by both the degree to which the industry is likely to attract new entrants (i.e., is it profitable, growing, or otherwise alluring?) and the height of entry barriers. Entry barriers can include such factors as large start-up costs, brand loyalty, difficulty in gaining access to suppliers or distributors, government regulation, threat of retaliation by existing competitors, and many others. In the aerospace manufacturing industry, this threat is relatively low because of the entry barriers. The cost of starting an aerospace company is high and the existing companies are well-established. These companies are large, have the contacts, personnel, and skills necessary to meet the market demand, making it almost impossible for a new company to compete with them.

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