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Dominant Designs and Survival of Firms Summary

1. A dominant design is one that changes the dynamics of an entire market by becoming the standard that competitors and innovators follow. It creates a new competitive environment where only a few firms are able to survive. 2. A dominant design emerges when a firm's technical and marketing departments work together to meet customer demands. It is influenced not just by technical factors but also industry regulations, government rules, collateral assets, and organizational structure. 3. Adopting a dominant design leads to greater competition, higher profits, and prices. However, firms must continue innovating to adapt to changes or they risk failure, as inability to transition towards process innovation prevents effective competition.

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Abhay Agarwal
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60 views2 pages

Dominant Designs and Survival of Firms Summary

1. A dominant design is one that changes the dynamics of an entire market by becoming the standard that competitors and innovators follow. It creates a new competitive environment where only a few firms are able to survive. 2. A dominant design emerges when a firm's technical and marketing departments work together to meet customer demands. It is influenced not just by technical factors but also industry regulations, government rules, collateral assets, and organizational structure. 3. Adopting a dominant design leads to greater competition, higher profits, and prices. However, firms must continue innovating to adapt to changes or they risk failure, as inability to transition towards process innovation prevents effective competition.

Uploaded by

Abhay Agarwal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Dominant Designs and Survival of Firms

Case Summary:
The scope of innovation is vast with huge potential of growth in almost any
industry. No firm has mastered the process of manufacturing or the process of
distribution or the process of development. The demands of customers are not yet
completely satisfied and there remains a scope of growth in the market with respect
to process and products.

Talking in terms of product’s evolution both consumers and producers are


experimenting with the current stage. New companies come up with unique
designed products to gain market share while the existing companies keep
enhancing their current products to extend their market share.

In this competitive market there comes the concept of “dominant product


design”. It refers to the design that changes the whole market dynamics. It
changes the competition inside the industry and both competitors and innovators
are compelled to follow the design. It creates a different competitive environment
and only few firms are able to survive the competition against the dominant product
e.g QWERTY keyboard. The dominant design aims at fulfilling the requirement of
many classes of users.

Dominant design occurs when the marketing and technical department work
together to meet customer requirements. The technical options available and the
customer demand together lead to dominant design. It is not always concerned to
the technical aspect; there are many more factors that play an important role. They
are:

1. Industry regulations
2. Government rules and regulations
3. Collateral assets
4. Firm’s strategy
5. Organizational structure

Dominant design often leads to greater competition with higher unit profits,
margins and prices. It provides an edge in the markets where it had superior
advantages over its competitor’s product. But this does not guarantee indefinite
success. A firm has to continue developing its product with change in environment
and the firms that are unable to make transition towards greater process innovation
are unable to compete effectively and they often fail.
Effects of Dominant design on the Industry:

1. Enforcements of standard so that production and other process can be


perfected.
2. Change in direction and pace of innovation: It generally gives a new direction
where companies can expect greater success and better innovation. With
current design as dominant, it would require changes in the current design to
further improve the product.

Phases within the model of innovation dynamics:

1. Fluid Phase: This phase deals with lot of uncertainty in terms of product,
process, structure and management of firms. The changes are rapid and
predicting the outcomes is difficult. It basically deals with two types of
uncertainties namely target where we are not sure who the target market or
what product features are most desired and technical uncertainties where the
firms are not sure of the direction to direct their research and development.
2. Transitional Phase: This refers to the phase where the market for new
product grows with market acceptance of product innovation and emergence
of dominant design. Materials become more specialized and the product and
process innovations start getting tightly linked.
3. Specific Phase: This phase refers to obtaining greater efficiency. The value
ratio of cost to quality becomes the basis of competition. Products get highly
defined with fewer differences between products of competitors.

The case further explains the emergence of dominant designs in various products
that changed the industry dynamics completely. The products emphasized are:

1. Typewriters
2. Automobiles
3. Televisions and television tubes

The products, processes, organization, market and competition have different


dominant design which is dependent on various factors. A firm has to transform to
this design in order to gain or maintain competitive advantage in the industry.

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