case study
Management of Technology
1. What factors do you think influenced whether (1) consumers, (2) retailers, or (3) movie producers supported Blu-ray versus HD-DVD?
(1) Consumers
Price. Most of customers want to have a player, which has the lower price.
Films. More sources can attractive more consumers.
Quality. The quality of the player and the quality of the movies are important to the customers.
(2) Retailers
Demand. They want to sell what consumers’ want.
Revenue. Which one can bring more income to them.
Supply. Which company can make sure the supply of their products.
(3) Movie Producers
Cost. The costs of make different format of movies.
Demand. The market demands what kind of format of movies.
2. Why do you think Toshiba and Sony would not cooperate to produce a common standard?
A lot of things can encourage the market toward natural monopolies. While some alternative platforms may survive by focusing on niche markets, the majority of the market may be dominated by a single (or few) design(s). Sony that is able to lock in its technology as the dominant design of a market earns huge rewards and may dominate the product category through several product generations. When Blu-ray technology is chosen as a dominant design, not only does Sony have the potential to earn near-monopoly rents in the short run, but Sony also is in a good position to shape the evolution of the industry, greatly influencing what future generations of products will look like. However, if Sony supports Blu-ray that is not chosen as the dominant design, it may be forced to adopt the dominant technology such as HD-DVD, effectively forfeiting the capital, learning, and brand equity invested in its original technology. Even worse, Sony may find itself locked out of the market if it is unable to adopt the dominant technology. Such standards battles are high-stakes games—resulting in big winners and big losers. That’s why Toshiba and Sony would not cooperate to produce a
1. What factors do you think influenced whether (1) consumers, (2) retailers, or (3) movie producers supported Blu-ray versus HD-DVD?
(1) Consumers
Price. Most of customers want to have a player, which has the lower price.
Films. More sources can attractive more consumers.
Quality. The quality of the player and the quality of the movies are important to the customers.
(2) Retailers
Demand. They want to sell what consumers’ want.
Revenue. Which one can bring more income to them.
Supply. Which company can make sure the supply of their products.
(3) Movie Producers
Cost. The costs of make different format of movies.
Demand. The market demands what kind of format of movies.
2. Why do you think Toshiba and Sony would not cooperate to produce a common standard?
A lot of things can encourage the market toward natural monopolies. While some alternative platforms may survive by focusing on niche markets, the majority of the market may be dominated by a single (or few) design(s). Sony that is able to lock in its technology as the dominant design of a market earns huge rewards and may dominate the product category through several product generations. When Blu-ray technology is chosen as a dominant design, not only does Sony have the potential to earn near-monopoly rents in the short run, but Sony also is in a good position to shape the evolution of the industry, greatly influencing what future generations of products will look like. However, if Sony supports Blu-ray that is not chosen as the dominant design, it may be forced to adopt the dominant technology such as HD-DVD, effectively forfeiting the capital, learning, and brand equity invested in its original technology. Even worse, Sony may find itself locked out of the market if it is unable to adopt the dominant technology. Such standards battles are high-stakes games—resulting in big winners and big losers. That’s why Toshiba and Sony would not cooperate to produce a