Technology Strategy in Lumpy Market Landscapes

Chapter 7 focuses on the “lumpy” markets- markets that are unevenly distributed because of different customer preferences.The author presents a framework that can be used to study lumpy markets and to recognize opportunities to implement emerging technologies across these markets. Customer’s preferences or attributes are restricted by certain key technology barriers and these technology barriers are based on the firm’s capabilities to produce new products with limited resources. Value for new technology arises when it satisfies the customer needs. With ever changing customer preferences, it is difficult for companies to anticipate and analyze market preferences and the benefits of the emerging technologies. As the customer preferences for the new technologies are lumpy, it is difficult for the companies to understand the technological needs of the market.

Pushing technology barriers in lumpy markets
Managers’ deal with lumpy markets by understanding the interaction between market segments and the technology barriers as this helps companies to deploy emerging technologies.

Identifying valuable technologies
Understanding the lumpy markets help companies identify valuable technologies for the market. To understand market lumpiness, technology strategists need to set three conditions:
· Differentiating meaningful attributes
· Understanding how different attributes appeal to different market segment
· Influence of technology barriers on market segments and the attributes.

Lumpy markets can be identified by using attribute matrix tool. Based on the customer reactions and intensity of the reactions, attributes are organized on the matrix and customer responses are categorized into basic, discriminators and energizing features. Once current and future attributes valued by the customer segments are identified, next step is to identify what are the technology barriers that are preventing to develop these attributes. Technology barriers can be identified by creating a barrier register, this helps find specific technology barriers that are restricting firm’s ability to enhance the attribute. With level of uncertainty associated with the attributes and the technology barriers, deploying emerging technologies in the lumpy markets needs to be guided by options reasoning and making small investments. Managers can use position and scouting option to assess the ways to identify deploying emerging technologies.

Identifying positioning options to exploit lumpy markets
There are number of ways companies can use to implement technology development into the markets. Authors suggest three strategies to choose depending upon the extent of lumpiness, the number of barriers and the firm’s level of inclination for change. These three strategies are

Single niche domination: In this strategy one firm moves a technology barrier in such a way that allows it to offer a superior product in a specific niche. This strategy is appropriated for firms with limited investments in technologies.
Niche fusion: This strategy is used to pursue technology that will precipitate the fusion and domination of one or more segments through disrupting one or more technology barriers. This strategy is useful to combine two or more niches together and suitable for technologies which need performance improvement.
Creating a new technology envelope: The most challenging strategy for firm occurs when introducing an entirely new technology. New technology shifts the customer preferences resulting in the death of the incumbent companies.

Identifying Scouting options for applying new technologies
When market and technology applications are uncertain, biggest challenges for the firm is to identify key applications of the emerging technologies. By using dimensional search tool, firms can look for potential attributes that can be developed by the emerging technology and identify the market needs for those attributes.

Conclusion
The chapter concludes by saying that the future of firm is linked to the evolution of attribute available to the customer segments and deployment of emerging technologies can be done by intimately understanding the relationship between the technology trajectories and barriers and the opportunities generated due to the lumpiness of markets.

This chapter was very interesting and gripping for many reasons. This is by far the most interesting chapter of the book. Not sure if it’s the most important one – but definitely most interesting.

Firstly, it showed how much we can dissect and analyze the various forces affecting a trend or a phenomenon (here the lumpiness in the market). The chapter demonstrated how many different ways we can pit the factors against each other to predict a trend.

It also has a shade of what is popularly called “analysis paralysis”. There was probably too much analysis involved to reach a decision. And in the end author puts out a disclaimer that markets will still be very unpredictable no matter how much analysis you might put in your strategic decisions.

Emerging technologies have themselves to blame for such “lumpiness” in the markets. Consumers are kind of spoilt by all the “latest technologies” that they can never get satisfied with any one feature and always want more. Also, there are so many “new” things all the time that consumers are also very confused and sometimes wary of these latest technologies. Many users will buy gadgets or electronics with features they might never use. So it makes it even more difficult to predict what the trend is going to be.

My takeaway from this chapter would definitely be the tools author has used to analyze a trend by pitting the various dynamic factors against each other. These could be applied to many business or strategic decisions.