Technology Cycles and Innovation

Technology cycles and innovation are two useful phenomena that can be used to explain how competitive advantage of companies can be maintained over time. Technology cycle can be defined as the period of time between the birth or introduction of a new technology and when it is replaced by a newer and substantially better technology. Technology cycle occurs whenever there is major advance in the knowledge, tools and techniques in a field. Innovation is the successful implementation of novel and useful ideas. Innovation is connected to technology cycle in the way that it forms the trigger to effect the technological discontinuity that replaces the old technology with the new technology.

Innovation can be easily copied or modified by the competitors and implemented in more intuitive manner. One great way to protect and maintain sustainable competitive advantage is to create a stream of innovative ideas and products over time, so that, there are frequent technology cycles, say every year. This gives little time for the competitors to copy the benefits obtained from an innovation. Innovation stream forces the industry to go for technology.

Article Copyright - Deepesh Joseph (2003-2020)

Research Reference:

1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Costs and Benefits of Planning

Planning has advantages as well as disadvantages. This means that even though planning aids in improving organizational and individual performance, it might not work very well all the time throughout the existence of the organization. One important benefit of planning is that it encourages managers and workers to direct their persistent efforts towards activities that accomplish their goals and away from those that are less relevant.

One of the major costs of planning is that over-commitment to plans will impedes company's efforts to adapt to frequent changes in their environment. Another easily identified pitfall is that planning usually fails when the planners (usually the top management) are detached from the actual implementation of the plans (done by the development team). To prevent this, the planners should have active participation and provide extensive support for the implementation
activities.

Article Copyright - Deepesh Joseph (2003-2020)

Research Reference:
1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

"Cognitive Dossinance" and how to ease it

Cognitive dissonance is an insecure feeling, or lingering doubts, consumers sometimes have after making large purchases. One way to reduce Cognitive dissonance (CD) is to introduce full money back guarantee on dissatisfaction within a stated time period, say 2-3 weeks after purchase. Another way to reduce CD is by allowing product evaluations where the user is allowed to use the product for a limited time period and then has the option whether to buy it or not. As a marketing manager of a desktop software, I will make the trial version of the software available for free download over the internet. Users can freely download, test, evaluate and then extend the trial period if they wish to, by purchasing the product. This way, the users are devoid of any dissatisfaction after purchase, since they have evaluated the software fully.

Article Copyright - Deepesh Joseph (2003-2020)

Research Reference:
1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Influencing Problem recognition of customers

The consumer can be influenced by exposing him to some stimuli that makes him realize about his potential need or desire for something. A good method will be to expose him to some sort of advertisement. For example as a marketing manager of a ABC company that produces dandruff
remover shampoos, I will work on collaborating with Wal-Mart to display multimedia advertisement on the TV terminals at the cash counter, showing how a person is greatly satisfied and relieved by the use of ABCshampoo.

Article Copyright - Deepesh Joseph (2003-2020)

Research Reference:

1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Market segmentation

Market segmentation is the process of separating the varied market into segments, each of which has similar characteristics. For example, a cosmetic company may segment its market according to age and sex, thus concentrating on baby lotion (age), adult shampoo (age), after-shave (sex) and eye-liner (sex). The organization could then do research in each segment to study how large a market is for its products and arrive at products that is of high value and quality for that particular segment.

Article Copyright - Deepesh Joseph (2003-2020)

Research Reference:
1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Simple NPV & ROI calculation (Example 001)

Case: A company invests $15000 and receives a $11000 cash benefit at the end of the first year and a $12100 cash benefit at the end of the second year. (Assume Cost of Money = 10%)

Calculation:

	t=0	t=1	t=2
Costs
Onetime investment	(15000)
Benefits
Cash		11000	12100
F	(15000)	11000	12100
P	(15000)	10000	10000
NPV	20000 – 15000 = 5000
ROI	5000/15000 = 33.33%

NPV = Σ P = 10000 + 10000 – 15000 = 5000
ROI = NPV/Initial investment = 5000/15000 = 33.33%