Friday, August 14, 2015

Technical focus can shortchange development


In many consumer firms, managements become top-heavy with engineers and scientists.

This creates an environment favoring R&D at the expense of fulfilling consumer needs. The firm must remember that the core of competitive advantage is consumer value, not technical superiority. Therefore, technology development should be a supporting function to marketing and insights division.

However, there are cases are selected cash rich firms to be focused on technology development. Often, these cash rich firms can lead supply side innovation. They can create a technology for a non existing market. The argument is that the consumers do not always understand their own demands in the context of new technology. I suppose consumers did not demand instant messaging in the 1800s. They probably demanded for faster horses.

Summarily, most firms must consider technology as a function supporting product development. A few of these cash rich firms can take the lead to uncover supply side innovation.