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Strategic Implications for New Entrants

Suresh

By Dr Suresh Vidyasagar Menon-Chief Consultant & Business Advisory for Six Sigma, Operations, Strategic Management and Information Security

The new entrants or attackers have several advantages over established enterprises. Pressures to continue the existing, out-of-date business model do not hamstring new entrants, which do not need to worry about product cannibalization issues. They need to worry about their established customer base or about relationship with established suppliers and distributors. Instead, they can focus all of their energies on the opportunities offered by the new disruptive technology, move along the S-curve of technology improvement and rapidly grow with the market for that technology. This does not mean that the new entrants do not have problems to solve. They may be constrained by a lack of capital or must manage the organizational problems associated with rapid growth; most important they may need to find a way to take their technology from a small, out of the way niche into the mass market.

Perhaps one of the most important issues facing new entrants is choosing whether to partner with an established company or go it alone in an attempt to develop and profit from a new disruptive technology. Although a new entrant may enjoy all the advantages of the attacker, it may lack the resources required to fully exploit them. In such a case the company might want to consider forming a strategic alliance with a larger established company to gain access to those resources.

  • It is very important for a first mover to develop a strategy to capitalize on first mover advantages. A company can choose from three strategies, develop and market the technology itself, do so jointly with other company, or license the technology to existing companies. The choice depends on the complimentary assets required to capture a first mover advantage, the height of barriers to imitation and the capability of competitors.
  • Technological paradigm shifts occur when new technologies emerge that revolutionize the structure of the industry, dramatically alter the nature of competition, and require companies to adopt new strategies in order to succeed.
  • Established companies can deal with paradigm shifts but new entrants may find it difficult.

In Today’s scenario adopting Artificial Intelligence tools should be a must in maintaining the strategic goals of the organization along with other defensive measures like implementing tools on cybersecurity etc. and of course Six Sigma (DMAIC & DFSS) Implementation which many organizations are already doing.

About the author

Dr Suresh Vidyasagar Menon has 31 years plus of overall experience in IT, around 3 Years in Auditing of ISO 27001-Information Security Standard, has executed 25 plus projects in IT and two turnkey projects for eastern railways (Liluah) and has to his credit 14 publications in International Journals of Science, Engineering & Technology. Dr.  Suresh is also a Member of the Six Sigma Hall of Fame and an awarded reviewer for various International Journals.

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