Topic 3 Diffusion of Technology WooYong Park Brief

Topic 3: Diffusion of Technology Woo-Yong Park

Brief Review

Brief Review

Brief Review “Can you tell why the concept of technological paradigm and trajectory is important ? ” Two Critical Reasons - Competition basis (concept) significantly changes between TPs. - Competition basis (concept) continuously changes across a TP. Managerial Implications - TP and TT concepts well explain why firms should change their organizational structures and strategy continuously. - At least, firms should be willing to adopt new organizational changes and strategic decisions.

Topic 3: Diffusion of Technology A question: “Why are some new technological paradigms well adopted, and why not others ? ” Characteristics of a New Product that Influence Adoption

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption (Rogers, 2003) § Relative advantage § Compatibility § Complexity § Trialability § Observability Rogers, E. M. (2003). "Diffusion of Innovations " Press, 5 th Edition.

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Relative advantage • The competitive price and performance for the innovation relative to the established products in the market. • Performance dimensions can include social prestige, savings in time or effort, a decrease in discomfort, and the immediacy of the benefits.

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Compatibility • Whether the innovation is compatible with new skills or training to properly use or understand how a product works. • Whether a component in a product is compatible with others in other products

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Example 1: QWERTY and Dvorak Keyboard

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Complexity • Product complexity in use or understanding

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Trialability • Samples, test drives, test farm plots, and in-plant machine trials are ways of reducing the buyer’s uncertainty with respect to how well the innovation will perform.

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Trialability § Examples

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Observability • People are more likely to adopt an innovation if the benefits can be deduced from observing tangible features of a product. Non-observable benefits or subjective benefits will require far more substantiation in order to be accepted by potential buyers.

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Observability § Example : Aerodynamics in the bicycle industry Shifter Freewheel Derailleur Chain

Topic 3: Diffusion of Technology Characteristics of a New Product that Influence Adoption § Observability § Example : Index shifting technology in the bicycle industry

Topic 3: Diffusion of Technology § How about Electric Car ?