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The Utterback Model for Technology Lifecycle

Dynamics

Product/Market uncertainty Innovation & growing demand Functionality No competition

Dominant design Clarify customer needs Increase innovation Compete on quality, availability Technology-design realigned Growth strategies Licensing Joint R&D Supplier guarantee

Pressure on profit margin Similar products Converge product and process innovations Value chain cost control Customer focus Share risk and cost Marketing alliances to attack Mfg. alliances for availability Horizontal mergers Divestiture of mfg

New technologies invade Increased obsolescence Low entry barriers Markets converge with new tech Realign core competency Attackers NPD and gain recognition Alliance tries to gain recognition Disruptive technology Acquire incumbents New market shift Equity finance for attacks

Priorities

Develop and preserve Promotion as standard

Strategic Alliances

Technology and marketing alliance Licensing

M&A

Equity Investments Acquire startups

Acq. competitors Acq. by established player

FLUID PHASE (1975-89)


Dynamics

70s developed PC portfolio Aggressive licensing of Pascal, Cobol & Fortran attracted IBM MS-Dos 1.0

Poorly defined technology Proliferation of Products Small niche Low competition

Priorities

Market Recognition Promotion as PC part

Strategic Alliances

IBM Aggressive licensing

M&A

None

TRADITIONAL PHASE (1982-87)


Dynamics Est. standard Market Growth Priorities Growth Strategy Develop applications for OS Strategic Alliances Aggressive licensing

Improve functionality, address specific needs Broader technology base and user friendly Aggressive licensing to 50 manufacturers Forethought acquisition in 1987

Continue with IBM


M&A Forethought

MATURE PHASE (1988-1994)


Dynamics 45% growthrate Product upgrades and product development to meet customer needs Priorities Easy to Use application Software programs Keeping pace with the technology development Strategic Alliances 36 joint ventures Joint Marketing agreements

Became the Worlds top software vendor Broader technology base and user friendly Improved its OS and application softwares

M&A

2 technology acquisitions

DISCONTINUITIES PHASE (1995-99)


Dynamics 32% growth rate Invasion of internet Priorities Development of Technologies Attempt to get established in the new technology area Strategic Alliances M&A 35 alliances 26 minority equity investments 15 companies were bought

Meeting in pace with the growing world of internet

Comparisons

COMPARISON BETWEEN MICROSOFT AND APPLE


Source: Gartner Inc.

Source: Reuters, Yahoo finance, Computerworld Analysis

Source: Company Website, Reuters, Microsoft Fiscal year end June Source: Company website, Reuters, SEC Filings. Data for year Source: Company year end Sept 30Website, Reuters etc.

Source Yahoo Finance 30, Apple Fiscal

end.

MORE COMPRAISIONS
Market Cap: Apple and Microsoft

Historic Stocks: Apple and

Source:manolution.c

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