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Technologie und Innovationsmanagement (Subject) / Dominant Design and industry evolution (Lesson)

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• Product and Process innovation model - 3 stages - 2 curves (product innovation and process innovation curve) - y-axis: rate of innovation - x-axis: stage of development - First stage (flowing phase): high product innovation curve (need is stimulated), low process innovation curve (output rate is stimulated) - Second stage (transition phase): higher ProcessIC, lower ProductIC, technology is stimulated in both ways - Third stage (specific phase): ProductIC is very low, ProcessIC ist lower again, but higher than the productIC, cost is stimulated in both ways First stage: uncoordinated process, product performance max. Third stage: systemtic process, product cost min.
• Process and Product Innovation model - flowing phase - high product innovation rate due to search for technical applications for new products, which fit the customers need - diverse product lines, consequently low process innovation rate, because of a required product flexibility - flexible and inefficient production process - decisive (entscheidend) pont: emergence of a dominant design (as a standard for future product developments)
• Process and Product Innovation model - transition phase - breakthrough of a dominant design -> beginning of the transition phase and shift from a quality to a price competition - technological performance looses importance, but pricing policy and other marketing instruments gaining importance - only marginal product innovation for certain components - specific automated product processes - focus on cost reduction opportunities and on increases in productivity
• Process and Product Innovation model - specific phase - rare product and process changes - innovations are espacially cost oriented - mass production (efficient but inflexible)  - learning curve effects such as improved production methods and exploitation of economies of scale are essential for advantages in the competition - expensive, efficient and rigid (starr) production -> high costs of change
• definition dominant design A particular combination of product features which appears to satisfy the market and survives, without major change, for some time. 
• Reasons for dominant designs 1. too high changing costs 2. formal standardization agreement 3. value of design increases with the amount of users (network effects) 
• criteria for a dominant design - best design - economies of scale - first mover advantages - network effects - sociological, politicalm and organizational dynamics

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