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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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1. The technology S-Curve best explains innovation in the music industry as it is a useful framework describing the substitution of new for old technologies (Christensen, 1992). This links to the music industry as the LP vinyl initiates the S-Curve as it began as a radical innovation, establishing the learning curve. As companies begin to understand the technology better, it allows incremental changes to be made, for example, newer models of the iPod. Smith (2010) mentions that as technology becomes better understood, it is better controlled and increases diffusion. As the product and the S-Curve matures, it reaches its natural limit, attracting competitors to enter the music market and create new technology. For example, Phillips created the first audio cassette tape once the vinyl matured, creating a new S-curve.

2. In between periods of radical innovation you would expect to find incremental changes. Incremental innovation allows for the selling of newer products by being able to use knowledge and expertise the company has already gained (Smith, 2010). An example of incremental innovation is the improvement of digital cameras, increasing the quality from 5MP cameras to 8MP. This has improved further throughout time.

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4. The theory of punctuated equilibrium best describes innovations in the music industry as it follows waves of radical discovery. Changes in the music industry such as the LP record, compact audio cassette player and the MP3 player are new technological breakthroughs. In between these radical innovations are incremental innovations which are more modest changes, exploiting existing products to improve upon them in some small manner. Incremental changes may be popular to undertake allowing sunken costs from prior investments to be spread among future outputs (Smith 2010). Sabatier and Weible (2014) state how most policy models explain either stability or change while punctuated equilibrium comprises of both. Punctuated equilibrium is effective in its explanation as it accounts for all the stages of technological innovation within the music industry.

5. At times of technological breakthrough, one has a number of new competing designs. Technological breakthrough of the MP3 players had two competing companies at one time. Diamond Multimedia's Rio 100 MP3 player was launched in the US at the same time as the Korean manufacturer Saehan launched the MPman. These two designs therefore competed against each other, however, 3 years later, Apple created the iPod, taking the MP3 market by storm and diminishing the Rio 100 and the MPman. As mentioned by Peneder and Woerter (2014) the innovation opportunity determines the impact of competition on the firm's research effort. This therefore implies that the success of innovation can be determined from the level of market research and competition, in this example, both Diamond Multimedia and Saehan were overtook by Apple.

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6. Columbia Records were keen to establish a standard for vinyl LP records as they wanted their product to be used and widely accepted as a standard for society. The LP standard started with a speed of 78rpm, decreasing to 33.3rpm, making the record play longer. Columbia Records hoped that it would become a de facto standard. According to Keil, (2002) a de facto standard triggers a bandwagon effect causing new people to adopt to the technology. This could cause a virtuous cycle that may increase the lead of technological standards, until it has at least gained a dominant position. Columbia Records were trying to avoid market failure by making the LP a dominant design.

7. Technological breakthroughs require other factors for the success as an invention does not always become an innovation. In the case study, Columbia Records refused to patents their design allowing other companies to use their technological design to act as a standard for improvements. This ensured their product was successful as it acted as the dominant design in the music industry. When a dominant design emerges, competition then shifts away from design and towards other variables such as branding, promotion and price (Ramsey, 2015). Market research is vital as the LP vinyl was initially aimed at the classical genre, however with the rising disposable income of young people, this lead to the introduction of pop music. The case study shows the importance of marketing and following consumer trends as Sony's Walkman popularised listening to music on the move (Smith, 2010). Hwang and Kim (2011) studies showed that in order to develop a more accurate empirical model for innovation, it is necessary to take into account two conditions, industrial scope in the analysis and user roles in innovation. Their in-depth study continues to show the importance of other factors in innovation success.

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8. It was beneficial for Sony and Philips to collaborate to develop the CD format as it allowed a joint taskforce, bringing together two research teams with different technologies and expertise. This broadened the knowledge of the companies and helped to avoid pitfalls which had affected the earlier and relatively unsuccessful laser disc. Wood (2003) mentions that collaborative learning provides not only knowledge acquisition but also other desirable outcomes, such as communication skills, teamwork, problem solving and the sharing of information. Absorptive capacity theory links to the collaboration of Phillips and Sony as it generates diversity of experience, as well as creating open innovation with a range of skill bases.

9. From the case study and further research, the importance of standards is clear. Each new product which enters the market has quality and compatibility expectations. The International Standards Organisation is a body that tries to create common standards for products and technologies in the hope of improving compatibility and safety. For example, Dolby patented the Dolby A noise reduction system, offering superior sound quality, making a standard from the previous audio cassette tape. Columbia Records new long playing record was an example of a design not patented, in the hope it would become a de facto standard, allowing others to share their idea (Smith, 2010). Brown et al (2010) builds on this by stating how standards provide a mechanism to share knowledge and make this knowledge of a public good, producers and developers can share the best practices and lessons learnt.

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