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Technology strategies and standard competition

29/04/2015

Technology strategies and standard

competition – comparative cases of

Apple and Microsoft

Jarunee Wonglimpiyarat

Journal of High Technology Management Research

Agenda

1. Structure

2. Main aspects

3. Theoretical framework

4. Methodology

5. Technological change

6. Case Study

7. Conclusions

8. Back-up

Structure of the Paper1. Introduction

2. Theoretical Framework

(1) Innovation and innovation process

(2) Porter‘s five forces

(3) Technology standards and platform

(4) Strategies in managing technological innovations

3. Methodology for analysing the platform creation process

4. Understanding the process of technological change in various industries

5. Case study of Apple and Microsoft‘s technology strategies

6. Generalisable principles synthesised from the case study analysis

7. Conclusions

Main Aspects of the Paper

Objective:

• to understand how innovative firms pursue strategies in securing the benefits from an innovation (based on the ILCM)

Case:

• Innovation cases of the tech firms Apple and Microsoft

Method:

• In order to analyse these cases a new methodolical framework of platform is developed by the paper

Assumption:

• A firm‘s ability to establish an industry standard and lock-in customers allows to create competitive advantage

Theoretical Framework – Sum up*• Innovation and innovation process:

• Definition

• S-Curve

• Technology push and demand pull

• Innovation life cycle model

• Product life cycle model

• Porter‘s five forces

• Argues that a firm‘s strategy is influenced by these five forces

• Technology standard and platform

• Platform: cluster of capabilities or competencies capable of creating competitive advantage

• Strategies in managing technological innovations

• Adoption of strategies is important in managing innovations and in making innovation happen

*for further information go the the back up slides

Methodology

• This study synthesises variables for use as indicators of technology platform

1. High performance relative to exisiting practices in several dimensions of performance

2. Variety of continuing applications

3. Intermediary serving multiple value chains

4. Subject to obsolence from new technology

5. Mostly single ownership

6. Controls channel of supply customers

7. Utilising numercially intensive analystic processing

• This methodology allows the understanding of the way innovators build up a technological capability to gain competitive advantage

Process of technological change in industries

• Innovation life cycle model as main concept behind

Case: Apple and MicrosoftApple:

• with launch of Macintosh: strategy of not licensing MacOS to OEM Hardware suppliers

Constrained growth of Apple and limited potential to create a business platform

Microsoft:

• pursuit of low-cost licensing strategy: direct cooperation with PC manufacturers for licensingWindows + increase of value of Microsoft Windows for PC users due to product bundlingstrategy

de facto standard for operating system in PC industry

Result Case: Apple and MicrosoftAnalysis shows:

• thanks to its control of the technology platform and the de facto standard for

operating systems Mircosoft achieved competitive advantage

• this ability enables Mircosoft to control the delivery channels and own the

customers, which lead to a continuing advantage in the operating system market

Future demand

Size ofinstalled

base

Availability ofsoftare

apllications

Value of PC to consumer

Microsoft succesfully established a

technology platform which allows it

to launch further related software

products

Conclusions

• The ability to establish an industry standard enables an innovator to create competitive advantage and…

• …provides a platform to excel the innovation process by generating a continuity of commercial successfulinnovations

• The innovator‘s strategies are consistent with the potential of platform creation

• Technology platforms emerge from a combination of strategies

• The platform needs to be consistently renewed to maintain platform advantage (e.g. aquiring software firms)

“Grazie Mille“ for your attention

Theoretical Framework – back up

• Innovation and innovation process:

• Definition: process of transforming technology frontier into the commercialised product/process innovation in a competitive market

• S-Curve: stages characterized by the efforts to transform an invention into an innovation

• Technology push (emphasize on R&D) and demand pull (emphasize on market)

• Innovation life cycle model: describes the process of innovation and the degree of technological change

• Product life cycle model: reflects innovation diffusion along four temporal stages

Theoretical Framework – back up

• Porter‘s five forces:

• Based on resources based approach

• Argues that a firm‘s strategy is influenced by these five forces

• To defend itself against or to influence these forces a firm should find its position in an

industry

Theoretical Framework – Back Up• Technology standard and platform:

• Platform: cluster of capabilities or competencies capable of creatingcompetitive advantage (in terms of subsequent innovations)

• Concerning innovation diffusion standards can affect competition

• Ability to establish standards could provide a technology platform allowingthe innovation to outreach firm‘s borders

• Two patterns:

1. uniform standardisation (diffusion requires standardisation amongmultiplayers) – e.g. credit cards

2. Without uniform standardisation (diffusion does not require formal adoption of standards among multiplayers) – e.g. Windows System

• Porter: use of technology platform = resource to achieve competitveadvantage

Theoretical Framework – Back up


• Resourced-based approach: firms compete according to their different capabilities and strategies to cope with changingenvironment are strictly associated

• First to market (take advantage of benefits from initial demand = extra profit before competitors respond) or follower (captureprofit making opportunities, respond more accurately to customer needs)

• Adoption of strategies is important in managing innovations and in making innovation happen

• The changes of strategies due ever changing market competition influence the progress of innovation

Technology study &

standard competition

Comparative innovation cases of apple & microsoft

TEAMWORK: Riccardo Raccis; Michele Sunda; Mattia Porta.

Introduction

• The first Personal Computer

models were really expensive

(20000$) and only people or

organizations with technical

knowledge and specific needs

were allowed to get it.

Introduction

• Understanding the potential mass-market grow, two principal actors started

to develop product for users with low competence, Apple and Microsoft.

But which kind of product was needed

by mass-market ?

Technology push

Demand pull

Porter: Five forces analysis

Threat of Rivalry among existing

firms

-Higer Threat, strong competition

among existing firms

Threat of new Entrants

-Low Threat: Needs of huge

investment

Bargaining Power of Buyers

-High, PC was an unknown

technology

Threat of Substitute Products

-Low threat, the PC technology

was unique

Bargaining Power of Suppliers

-Low, Intangible product does not require specific

relation.

Microsoft’s solution

Microsoft

Threat of new Entrants:

partnership with IBM

Threat of Rivalry among existing

firms: partnership with IBM


-Commercialization through partner

channel

Threat of Substitute Products

-Not alternative of product for the

same range of price

Bargaining Power of Suppliers

Windows allow every Software

House to create programs

compatible with him

Apple’s solution

Apple

Threat of Rivalry among existing firms

-It did not takes in account this threat


-The products Lisa and Machintosh were

really expensive (10000$)/ low

willingness to pay

Threat of substituteproduct: disruptive

policy

Bargaining Power of Suppliers:

Apple products was both software and

hardware. Motorola was the mono

hardware supplier.

Threat of new Entrants

-It did not takes in account this threat

Scurve analysis

Historical evidences

Thank you


competition

Comparative cases of Apple and Microsoft

Innovation Management

Camilla Casciu, Lucia Demurtas, Aga Lubkiewicz

Professor : Francesca Cabiddu

Technology strategies and standard competition

1. Introduction

2. Theoretical framework


4. Understanding the process of technological change in various industries

5. Case study of Apple and Microsoft's technology strategies

6. Generalisable principles synthesised from the case study analysis

7. Conclusions and avenues for future research

1. INTRODUCTION

• Understanding the use of technology strategies and competition to

establish technology standards.

• The use of the new methodological framework platform in analysing

a comparative case study.

• The contribution of the new methodological framework platform in

the area of innovation management.

2. THEORETICAL FRAMEWORK

Innovation is a process of

transorming the technology frontier

into the commercialised

product/process innovation in a

competitive market.

The innovation process presents a S-

curve, based on the efforts of the

innovator to adapt a technological

development (invention) for

tranformation into an innovation

(commercial product).

• Innovation and Innovation process

• Five forces Porter's approachThe use of competitive strategy seen as the way to achieve competitive advantage. The five forces of

competitive position model are: 1. Relations with suppliers; 2. Bargaining power of buyers; 3. Threats of new

entrants; 4. Threats of substitute products or services; 5. Rivalry amongst existing firms.

The firm's strategy, influenced by these forces, has to find a position in a industry to defenc itself

against the forces or to influence them in its favour.

• Technology standards and platform

Stardards can affect the environment of competition.

There are two patterns of development:

With uniform standardisation (among multiplayers), or without standards.


Being first to the market can help firms to take advantage of benefits from initial

demand in the market and enjoy an extra profit until competitors can respond.

• Firms compete according to their different capabilities.

• “Perfect competition was incompatible with innovation. As a matter of fact, perfect competition is and always has been temporarily suspended whenever anything new is being introduced.....”

(Nelson and Winter and Schumpeter).

• The adoption of strategies is important in managing innovations and in making theinnovation happen.

• The innovatory strategies can change over time.

• The change of the strategies influence the progress of innovation .



• “Platform”, is used to describe a cluster of capabilities or competencies able of creating

competitive advantage for a firm in terms of subsequent innovations.

• Continuity of commercially successful innovations

• Synthesises of different variables for use as indicators of technology platform ( Table 2)

4. Understanding the process of technological change in various

industries

Innovation Management_ Camilla Casciu, Lucia Demurtas

•The innovation life cycle model is adopted as an approach to analyse the process of technological change in various industrial

sectors.

• The process of technological change in the video recording industry represents a succession of S- Curves. The successive S-

curves represent the process of technological changes from magnetic recording technology to laser disc technology, compact disc

technology and digital versatile disc (DVD)/high definition DVD (HD‐DVD) technology and Blu Ray disc technology.

• The process of technological change in the computer industry represents a succession of S-Curves. The technological

improvement follows the S-curve to reflect technology progression from mainframe, minicomputer, PC.

• In the energy industry, the process of technological change presents an envelope of S-curves.

• In the bank card industry ,the process of technological change presents a progress from the magnetic stripe technology towards

the smart card technology. The process of bank card innovation diffusion presents a parallel substitution of technology.

• In the mobile telephony industry, the innovation process, based on the theory of innovation life cycle, represents the

generations of mobile system from 1G to 4G . A succession of S-curves represents versions of mobile communication

Video recording industry Computer industry

Energy sectorMobile telephony industry

Bank card industry

5. Case study of Apple and Microsoft's technology strategiesStrategies of Apple and Microsoft to cope with still changing competitive conditions.

Competition

At the beginning of competition between both companies, Apple decided about not licensing Mac OS to Original Equipment Manufacturer (OEM)

hardware suppliers. Apple was not good informed, that Microsoft was a good follower who was ready to launch a similar product to MAC OS

(Microsoft Windows). Strategy of not licensing shows that Apple omitted the importance of speed in using other PC’s manufactures distribution and

they missed they chance to bring and innovation to the market.

As a result Microsoft Windows was faster on the market than MAC OS, and MAC OS failed. Making a mistake with providing the not licensing

strategy lowered Apple's capability to compete and limited the potential to have a competitive advantage.

Microsoft

At that time Microsoft made very good move and pursuit a low-cost strategy with which it could license Windows via OEM arrangements with PC

manufacturers.

Microsoft also used product bundling strategy which increased the demand for the product and reduced the scope of competing suppliers. The

strength that Windows was distributed by global PC manufacturers made it good adopted and thought as a standard.

Microsoft could enjoy a continuing competitive advantage from its ability to dominate the PC industry with the extension of Windows standards.

5. Case study of Apple and Microsoft's technology strategiesStrategies of Apple and Microsoft to cope with still changing competitive conditions.

Apple

Competition for potential platform creation began for Apple when they launched Apple Lisa.

But regarded to customers opinion, Apple set the price too high (Apple Lisa $10 000 while

standalone PC $2 000). Still it was a big innovation because Apple Lisa ran as a closed system,

which was preventing software development firms from writing application programmes.

Even though for customers those innovative Apple’s machines was not seen as valuable for

customers to purchase for that high price.

In result Apple failed to establish a business platform even if it was an early mover in the PC

Windows operating system market and might have established their technologies as standard.

5. Case study of Apple and Microsoft's technology strategies

SWOT analysis of the strategic position of Apple and Microsoft.

6. Generalisable principles synthesised from the case study

analysisTechnology push and demand pull & Technology S-curves

• The level of technology adoption and diffusion might be

seen as an S-curve.

So the technology S-curves reflect the adoption,

diffusion and market acceptance of innovation.

With the improving technology from SMS to mobile Web

(HTML and HXTML) and mobile client application, Apple

and Microsoft launch their mobile innovations which

helps spur the mobile market adoption. In response to the

customers' demand for web-based applications and third-

party applications, the S-curve of technological innovation

progresses from mobile e-market towards mobile banking to

provide value-added web-based applications.

• Case study analysis has shown that innovation diffusion depends not only on conventional technology push and demand pull models

but also on dynamic interactions between them two.

6. Generalisable principles synthesised from the case study

analysisFive forces Porter

Porter’s research is significant to make a selection of

strategies for Apple and Microsoft, particularly the

strategies of mobile Internet and mobile commerce.

CONCLUSIONS The study has shown that

technology platform emerges from a combination of

strategies and that the platform needs to be

consistently upgraded/renewed to maintain a platform

advantage. It could be argued that technology could

render competitive advantage to innovators. However,

over time, the technology platform in competition

tends to be open to allow plug-in of various

applications which would create increased value to

customers.

Journal of High Technology Management Research

Technology strategy and standard competition

Comparative innovation cases of

Apple and Microsoft

Innovation Management 2015Students: Carlotta Cambarau, Sara Filippetti and Sonia Pili

The enviroment influence innovation


Cupertino (Silicon Valley) -California

Redmond (Washington) - Stati Uniti

Steve Jobs had

the wind in the

sails

Bill Gates was

the

pioneer of the

PC

1) Innovation life cycle model

2) Five forces Porter’s approach

3) Technology standards and platform

Tools used for the case study analysis of Apple

and Microsoft’s technology strategies:



Innovation life cycle model

Technology Standards and platform


Macintosh was born in 1984

High price

High quality

Niche product used by a

few

Windows was born in 1985

Average price accessibile to

all

Virtuous circle: more people

use windows and more

people will buy windows


Time

Technological

change

1980 1990 2000 2010 Today

Innovation Life Cycle

Model:

the S – Curve for Apple


Time

Technological

change

1980 1990 2000 2010 Today


Model:

the S – Curve for Microsoft


Where ’s revenues comes from?

Where’s revenues comes from?


35,10%

28%

28%

23%

31%

3%

Microsoft business division

Server and Tools

Windows & Windows Live

Entertainment and DevicesDivision

Online Services Division

Unallocated and other

Apple TV


Product Innovation


Product Innovation

X-Box

Bing

Windows

Office

SkyDrive

Windows

Phone

Microsoft

visual

studio

Zune


High

Low

High

REWAR

D

INVESTMENTLow

• -Low investment in Customer Service

• -Average Marketing investment

• -Human Resources count 80,400 highly

qualified people

• -Minimum investment in

Research&Development (€ 3.5 billion dollars)

Apple


High

Low

High

REWAR

D

INVESTMENTLow

• -Average investment in Customer Service

• -High Marketing investment

• -Human Resources count 127.104 qualified

people

• -Substantial investments in

Research&Development (€ 10.6 billion dollars)

EmpathyThe company will truly understand needs of the market better than any other company.

FocusIn order to do a good job they decide to eliminate all of unimportant opportunities.

ImputePeople judge a book by its cover.

The company may have the best product, the highest quality, the most useful software etc..

presenting them in a slipshod manner, they will be percived as slipshod; presenting them in a

creative, professional manner, the company will impute the desired quality.

The Apple Marketing

Philosophy



Marketing

philosophy

Network MarketingEach windows product is compatible with another windows product.

Be customer focusedThere are a lot of jokes about the customer service of Microsoft but if you really look at it,

the reason why Microsoft is actually working is because help is available offline as well as

online. Your computer might crash for any reason, but generally you are able to specify the

reason for the crash and if you are a techie you will be able to rejuvenate it.

Easy to useMake products which can be used by the youngest or by the oldest in the easiest manner. Like

Nokia in mobile phones, Microsoft OS is known for its ease of access. The start button has

been revolutionary.

Apple’s Innovation Strategy to achieve

competitive advantages

• Focus on digital consumer opportunity

• Simplify the consumer experience

• Design the most beautiful products

• Combine hardware, software and cloud

• Expect to invent the next big thing



Innovation Strategy

to achieve competitive advantages

• Microsoft defines innovation as “the conversion of knowledge and ideas into

new or improved products, processes, or services to gain a competitive

advantage.”

• The use of social media sites, and the ability to get immediate feedback and

input from employees, customers and markets allows company to accelerate

innovation.

• Online, social collaboration also serves as a self-documenting form of

innovation, developing a record of the innovation process to help identify,

protect, and develop intellectual property.

• Beyond software technology, new trends in manufacturing such as the rise of

the “maker movement” and additive manufacturing have also lowered the

threshold to bring innovations to market.


In the innovation battle, the winner does not necessarily offer the lowest price or

provide the best thecnology, but often effective competition could be enhanced if an

innovetor could establish its technology as an industry standards.

When speaking about innovation it quickly becomes clear that leadership, commitment

and culture count. While strategy, processes and technology play a large role, people

matter. Having strong leadership for innovation is crucial. In fact, many companies are

putting in place executive-level positions responsible for innovation.

As more CEOs realize that they lack an organizational competency for innovation, the

matter is evolving into a mainstream management competency and discipline. The

bottom line is that formalizing innovation processes improves business value.

“Think different” (1997)

“There is an App for that” (2009)

“Designed by … in California”

(2013)

“Where do you wont to go today?” (1987)

“Your potential. Our passion” (2006)

“Be what’s next” (2011)

"I think, therefore iMac” (1998)

Match slogans

You’re going to need more popcorn! (2015)


Pirates of Silicon Valley


Innovation Management 2014/2015 University of Cagliari


Model

Casu Matteo

Onida Antonio

Pala Stefano

A Comparative Analysis: Apple

Vs. Microsoft


How We Proceed

• Introduction

• Life Cycles and S-Curves

• Porter’s Five Forces as innovation driver

• Apple/Microsoft case presentation

• Conclusions


Introduction

• Demand pull Vs. technology push patterns

• Uniform standardization Vs. de-facto

standardization

• Porter’s Five Forces move innovation strategies


Life Cycle Model

Source: Vernon (1966)

The model depicts the evolution from birth through maturity of

an industry with rich opportunities for product and process

innovation


S-Curves Chart

S-curves visually depict how a product, service, technology or

business progresses and evolves over time. S-curves can be

viewed on an incremental level to map product evolutions and

opportunities, or on a macro scale to describe the evolution of

businesses and industries. Usually the end of one S-curve

marks the emergence of a new S-curve.


S-Curve Charts


Porter’s Five Forces


Case Introduction

The first “modern” PC was launched by IBM

with MS-Dos freely powered by Microsoft

Apple launched the first PC with MacOS with

GUI

1981

1984

Early 80s IBM was leader in computer hardware

Supply


Case Introduction

Microsoft launched Windows first release

Apple strove introducing the first

pocket pc (Newton PDA)

1985

1993

2000s Apple’s mobile devices revolution


Apple Strategy

Apple aimed to establish its own standard by not licensing

MacOS to OEM Suppliers

1984

Apple overconfidently assumed its bundle (own

hardware+MacOS) to be stronger than competitors


Apple Strategy

Apple’s strategy failed due to the

overlooking of new entrants in the market

It limited the potential to create a successful

business platform and to gain a competitive

advantage


Apple Strategy

Apple has accomplished to launch innovative

mobile devices, successfully applying its strategy of

not licensing

Through iPod, iPhone, iPad and ITunes Apple

established a competitive advantage and market

standards

2000s


Microsoft Strategy

Windows 1.0 distributed to OEM by

license

Low-price which allowed to reach a

bigger customer segment: particularly

private consumers

1985


Microsoft Strategy

2000s

Microsoft has moved to mobile sector since windows

mobile through to windows phone and acquisition of

Nokia to produce Microsoft devices (Lumia series).

Microsoft failed to establish its licensing strategy in

the mobile sector and nowadays is following Apple’s

bundling strategy


Apple Innovations

Time

Degree of

innovation

Macintosh

1984

PowerBook

Mac Pro -iMac -

MacBook

eMac - iBook

1991 1999 2006 2015

iOS devices


Microsoft Innovations

Time

Degree of

innovation

Windows 1

1984

Windows 95

Windows 8

Windows XP

1995 2002 2008 2015

Windows Mobile

WP8

Windows 10


Conclusion

• Innovation in technological sector is driven by both

technology push and demand pull patterns;

• Innovations derive by specific strategies which are

influenced by Porter’s Forces;

• Innovation depends on previous technology platform;

• Degree of innovation through time could be represented by

S-Curves Charts;

Technology strategies and

standard competition

Comparative innovation cases of Apple and Microsoft

Nelly Eysholdt | Filippo Figus | Juliane Leinweber | Fabio Muscas

Theory Platform:

enables the creation of products and processes

that support present or future or past developments

Life Cycle Model | Phases:

Product Development

Market Introduction

Growth

Maturity

Decline/Stability

S-curve Phases:

Reflects the adoption, diffusion and market acceptance of innovation. In other words, it shows the “innovation life cycle” hat can be describe by the forces of technology push and demand pull and their interaction.

Technological standards

an established norm or requirement e.g. to technical systems

To establish uniform engineering or technical criteria, methods, processes and practices

Product Life Cycle | s-curve

Cases and ResumeApple

Was a market leader in the 1970s but lost it‘s position in the 80s, because it‘s strategy of not licensing MAC OS during the launch of Macintosh

Launch of Lisa failed because of being a closed system

Has regained it’s competitiveness by the success of the iPhone (envisioning of mobile internet)

The strong technology platform enables it to successfully launch subsequent innovations of PC, iPod, iPhone, iPad

Attempts to establish is own technology (tablet IOS) as an industry standard

Microsoft

Established a technology platform which allows it to launch further related software products (operating system, PC‘s servers software).

Established it‘s business platform by pursuing a low cost licensing strategy of Windows via OEM arrangements with the Pc manufactures.

The acquisition strategy to purchase software firms allows Microsoft to remain competitive in the operating system business and let establish Windows as an industry standard.

The wide adoption and become a de facto standard helped Microsoft to enter in new business such as the internet browser, web TV, computer games.

Leasons learnt | ConclusionApple

Mac development projects

launch faster, smaller and much

less expensive computers

Reconceptualised the PC and

transformation into the iPad

Microsoft

Consistently improving

the technology platform

and business platform by

purchasing/aquiring

software firms whose

software applications

could be bundled into the

windows operating

system

In order to create competitive advantage it is important to establish an industry standard

Thank you for your attention!Questions?

MICROSOFT VS

APPLE

TECHNOLOGY STRATEGIES

CASE STUDY: GIULIA CUCCU

APPLE MICROSOFT

Acquisition Strategy (purchase software firms and soft. designer):

• - Allow to remain always competitiveness in the operating system business

Windows Os as industry standard

• - Control delivery channels

• - Own the customers

• - Continuing advantage in the system market

Established TECNOLOGY PLATOFORM

BRAND STRENGTH

+S CURVE for Apple and Microsoft

This curve reflect the adoption , diffusion and market acceptance of innovation.

Innovators

2,5%

Early

adopters

13,5%

Early Majority

34%Late

Majority

34%

Laggards

16%

0

25

100

75

50

This curve is based to the

improving technology from SMS to

mobile Web and mobile client

application.

BARGAINING POWER OF BUYERS

- Various market offers

- Demand for extra features- productdifferentation

- Product brand

BARGAINING POWER of SUPPLIERS

- Technology suppliers

- Size on mp3 player based on chip capacity

- Fragmented supplier industry

THREAT OF SUBSTITUTE PRODUCTS

- Discman - Minidiskplayer

- PDAs- Portable radios

- Netbooks - Laptops

Industry competitors

and

Rivalry among existing firms

MICROSOFT consistently improves its

technology and business platform by

purchasing/acquiring software applications

could be bundled into the Windows

operating system.

APPLE after the experience with the

Lisa project, launch smaller, faster and

much less expensive computers. Apple

used the knowledge learnt from other

projects to build the product champions (

ex. Ipad )

THANKS FOT THE

ATTENTION

Analysis of the S – Curves

technology strategies and standard competition-

Comparative innovation cases of Apple and

Microsoft Alexandra Čipáková

Gabriela Ferenczová

Theoretical framework of S - Curves

• Innovation is a process of transforming the technology frontier into the

commercialised product/process innovation in a competitive market. The

innovation process characteristically exhibits an S pattern. The stages along

the S-curve are characterised by the efforts of the innovator to adapt a

technological development (invention) for transformation into an innovation

(commercial product). The innovation process can be described by the forces

of technology push and demand pull or their interaction as triggers of

innovation.

The product life cycle (PLC) model• Vernon's Product Life Cycle is a classical model explaining the development as a pattern

of product substitution (the S-curve pattern).

• The phases along the PLC reflect innovation diffusion — the progress of

product/process innovations along the stages of introduction, growth, maturity and

decline.

• PLC shows a progression of innovation from process innovation to product innovation.

• The process of technological change in the video recording industry represents a succession of S-curves.

• The period of innovation life cycle consists of technology substitutes to extend the life cycle of technology .

• The envelope of S-curves describes the progress of innovation in the form of the improving video system over time.

• The successive S-curves represent the process of technological changes from magnetic recording technology to Blu - Ray disc technology.

• The process of technological change presents a progress from the magnetic stripe technology towards the smart card technology.

• The process of bank card innovation diffusion presents a parallel substitution of technology (the two technologies are not independent as the smart card technology has not yet taken over the existing magnetic stripe card technology).

• The level of technology adoption and diffusion can be seen as an S-curve.

• The technology S-curves reflect the adoption, diffusion and market acceptance of innovation.

• In response to the customers' demand for web-based applications and third-party applications, the S-curve of technological innovation progresses from mobile e-market towards mobile banking to provide value-added web-based applications.

TECHNOLOGY STRATEGIES AND STANDARD COMPETITION

Riccardo Contu

Università degli studi di Cagliari 04/2015

Comparative innovation cases

of Apple and Microsoft

THEORETICAL FRAMEWORK• INNOVATION PROCESS

• FIVE FORCES PORTER’S APPROACH

• TECHNOLOGY STANDARDS AND PLATFORM

• STRATEGIES IN MANAGING TECHNOLOGICAL INNOVATIONS

THEORETICAL FRAMEWORK

Innovation is a process of transforming the technology frontier into the commercialized product/process innovation in a competitive market

THEORETICAL FRAMEWORK• INNOVATION PROCESS

The innovation process usually follows an S-

pattern.

The stages along the S-curve are characterised by

the efforts of the innovator to adapt a

technological development (invention) for

transformation into an innovation (commercial

product). The innovation process can be

described by the forces of technology push

(Schumpeter, 1939) and demand pull

(Schmookler, 1962) or their interaction (Freeman,

1982) as triggers of innovation.

THEORETICAL FRAMEWORK• FIVE FORCES PORTER’S APPROACH

A firm's strategy is influenced by these

forces and suggests the firm to find a

position in an industry to defend itself

against the forces or to influence them in its

favour (Porter, 1980)

THEORETICAL FRAMEWORK• TECHNOLOGY STANDARDS AND PLATFORM

The ability to establish standards

could provide a technology

platform allowing the innovation

to progress from a firm level

towards a country or even a

global level.

THEORETICAL FRAMEWORK• STRATEGIES IN MANAGING TECHNOLOGICAL INNOVATIONS

Firms, according to the resource-based approach, compete according to

their different capabilities. Strategies to cope with a changing competitive

environment are associated with the firm's capabilities. Under the model of

Schumpeterian competition, being the first mover or follower in the industry

not only influences the extent of innovation adoption but also the benefits

secured. When the resources and capabilities required in the diffusion of

innovation are not available

within an economic entity, it is likely that innovators adopt collaborative

strategy and vice versa.

CASE STUDY OF APPLE AND

MICROSOFT’S TECHNOLOGY

STRATEGIES

WHICH EVENTS ARE HIGHLIGHTED BY THE RED ARROWS?

• MICROSOFT WINDOWS

• MICROSOFT WINDOWS 95

• iPHONE



95

• iPHONEWith these products Microsoft first and Apple further managed to reach a

competitive advantage in specific sectors for their platform.

PORTER’S FIVE FORCES ANALYSIS

CONCLUSIONS

The case study has shown that the innovators’ use of strategies is consistent with the potential of platform creation;

The ability to establish the innovator’s own technology as standard provides a route to competitive advantage. This is due to the fact that standards can help create network externality effect through compatibility and moreover standards help tie in the customers since niche basis. and needs to be consistently upgraded or renewed to maintain advantage;

Technology platform emerges from a combination of strategies and needs to be consistently upgraded or renewed to maintain advantage.

ACCORDING TO

YOU…WHO WILL BE

NEXT ?

THANK YOU FOR THE

ATTENTION


competition:

Apple vs Microsoft

Roberto Arru, Luca Pisanu

Strategy

Technology standard

Technology platform

Competitive advantage

Theoretical process

Strategy

• In the early years of competition, Apple

in its launch of Macintosh adopt the

strategy of not licensing Mac OS to OEM

hardware suppliers

• By pursuing a low-cost licensing

strategy, Microsoft could license its

Windows via OEM arrangments with the

PC manufacturers

As a result, the Mac OS failed to take off

as quickly as Microsoft WindowsSuddenly Microsoft Windows became the

facto leader in the operating system

market

0

50

100

Microsoft

Apple

Innovators Early adopters Early majority

The S-curve

Late majority Laggards

Technology Standard and Platform

The strategy of not licensinglowered Apple’s capabilities andopportunity to becamestandards and limited thepotential to create a businessplatform

The wide adoption and de factostandard of Microsoft Windowsoperating system then served as astrong platform that helpedMicrosoft to successfully launchothers products

Apple’s competitive advantages

• Apple Store

The largest Apple center where you can findeverythings products and the top experts in theindustry

• Lovemark

The consumer becomes a testimonial of the brandApple products. They are visually appealing,functional and easy to use

• Partnership

Apple has also partnered with some brands notrelated to the world of computer science andtechnology as Nike, Mercedes and The 20° CenturyFox

• Premium Price

It has a policy of common prices for eachcategory of its other. Apple applies to itsproducts a premium price justified byinnovative product, unique design and brand

Microsoft’s competitive advantages

• Low-cost prices

Microsoft could enjoy a continuingcompetitive advantage from its ability todominate the pc industry

• Connectivity with multi-systems

Software companies see Apple’s productscompatible with their applications

• Powerful technology

Different types of electronic products asgames, phone, watch etc…

Thanks for your attention!!!

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