Diffusion of Proprietary Technology Framework
Technological diffusion
The diffusion of proprietary technology can erode mobility barriers over time, making it easier for new competitors to enter the industry. Companies must continually innovate to maintain their technological advantage.
- Proprietary technology can provide a temporary advantage
- Technological diffusion can erode mobility barriers
- Continual innovation is necessary to maintain a technological advantage
- Identify Proprietary TechnologyIdentify the proprietary technology that provides a competitive advantagePro tipContinually monitor the industry for new technologiesWarningFailure to innovate can lead to loss of competitive advantage
- Assess Diffusion RiskAssess the risk of technological diffusionPro tipConsider the complexity of the technology and the availability of skilled personnelWarningUnderestimating diffusion risk can lead to loss of competitive advantage
- Develop Innovation StrategyDevelop a strategy to continually innovate and maintain a technological advantagePro tipInvest in research and developmentWarningFailure to innovate can lead to loss of competitive advantage
Aerosol Example
The aerosol industry experienced technological diffusion, leading to increased competition and reduced mobility barriers
OutcomeCompanies that failed to innovate lost their competitive advantage
Underestimating Diffusion Risk
Failing to consider the risk of technological diffusion can lead to loss of competitive advantage
Failing to Innovate
Failure to continually innovate can lead to loss of competitive advantage
The framework is based on the idea that proprietary technology can provide a temporary advantage, but it will eventually diffuse to other companies, reducing the mobility barriers.
Source · BOOK
Competitive Strategy