Standards & Formats

Shringar M. Tiwari 131322

D. Haresh Kumar 131323
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Chapter-7
Strategy and Technology
Technical Standards and Format Wars in
High-Tech Industries

High-technology Industries are those in which the

underlying scientific knowledge that companies in the
industry use is adancing rapidly! and "y implication so are
the attri"utes of the products and serices that result from its
application

Examples# $omputer! Tele communications! consumer

electronics! pharmaceuticals! power generation! aerospace

%hy High#tech &ndustries '

(arger share of economic actiity

(ow#tech &ndustry "ecoming more high tech

High#tech products into wide range of "usinesses

$ircle of high#tech industries is "oth large and e)panding

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Standards

a level of quality or attainment

something used as a measure, norm, or model

in comparative evaluations

Technical Standards

A set of technical specifications that producers

adhere to when making the product or a
component of it

Format Wars

Battles to set and control technical standards

Examples of Standards and Formats

Standards

Layout of the computer keyboard

Dimensions of the containers used to ship

goods on trucks , railcars and ships

PC

Formats

AC vs DC

ony!s Blue "ay vs #oshiba!s $D D%D

&'("#) vs* Dvorak keyboard format

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*specially in High#tech &ndustries! the ownership of
technical standards can "e an important source of
competitie adantage.
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&n many cases! the source of product differentiation is
"ased on the technical standard.
!
"ompetiti#e $d#antage
%enefits of Standards
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&t helps to guarantee compati"ility "etween products and their
compliments.
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&t helps to reduce confusion in the minds of consumers.
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The emergence of a standard can help to reduce production
costs.
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&t also helps to reduce the risks associated with supplying
complementary products and thus increase the supply for those
compliments.
&
Esta'lishments of Standards
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$ompanies in an industry might lo""y the goernment
to mandate an industry standard
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Technical standards are often set "y cooperation
among "usinesses without got. often through
&ndustry +orum
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Standard is often selected competitiely "y market
demand
(
Strategies of winning the standard / format war?
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Standard war
+ind a way of proiding sufficient "enefit that enough consumers
are willing to "ear the switching cost associated with moing to a
new product.
)
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Format war
+inding ways to make networks effects work in their faor
and against their competitors.
supply of complements
,ggressiely pricing - marketing
$ooperate with competitors
(icense the +ormat
*
How do companies leverage
The company promoting the technological standard will
want to deelop a killer application itself#that is ! deeloping
the appropriate complimentary products. Howeer! it may
also "e a"le leerage the application that other deelopers.

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