It is not about superior technology

There are many differences between managing mature markets and new ones, where innovation plays a central role. In existing and mature markets companies follow the principles of good management. They protect intellectual property, try to be the first to market, invest in internal capabilities and superior technology.

In emerging and innovative markets, however, a completely different managerial mindset is required. Competing in those markets, contrary to what most people believe, is not about having a superior technology.

It is beyond discussion the fact that technological excellence is a building block of competitive advantage in most industries. In emerging markets, however, superior technology is neither necessary nor sufficient to win.

The introduction of the Computer-Assisted Tomography systems illustrates the point. The first CAT scanner was introduced in 1972 by EMI, a British firm that patented all the key technologies involved. The system basically transferred X-rays and other diagnostic information into a three-dimensional computerized image.

After a couple of years established manufacturers of medical equipment, including General Electric and Siemens, jumped into the new market. EMI, however, did not feel threatened. It had undoubtedly the best technology around; its scanners had a much higher definition and more advanced features.

General Electric knew it could not compete head to head with EMI, it decided therefore to invest in scanners with a faster scanning speed, at the expense of image quality. After some years General Electric had conquered the vast majority of US market for CAT scanners, despite its inferior technology.

Over that period all the major hospitals were having critical problems with patient throughput, hence why they decided to go with General Electric’s equipment. EMI invested too much in its technology and ignored what was happening in the surrounding environment. Competing in emerging markets is not about superior technology but rather about understanding the customer’s need and evolving your product rapidly to match the changes in the market place.

Search this site

My Sites

Recent Posts