ADMS 1000 D FINAL EXAM NOTES
Note: How to answer case questions.
Identify the correct theory.
Define and explain terms.
Apply the theory to the case.
Use lots of case examples to support your argument. (Use assumptions were necessary). “ALL”
examples are required for FULL MARKS.
Write in sentences and paragraphs. While point form is acceptable, students often do not
receive an A grade for point form, as it is too short and does not provide enough of detailed
analysis and explanation.
Headings and subheadings can also be useful in organizing your answer to separate your
thoughts/ideas. It also helps the marker understand the flow of your answer better from one
thought to the next.
I tend to tell students write MORE not less. I can only award marks for what you actually write
down, not what you may have also been 'thinking.'
, Week 8 Chapter 8: Technology
Industry Lifecycle Model
The industry life-cycle model is known as a research in the fields of economics, strategic
management, and organization theory highlighting how virtually all industries evolve through
specific phases from their early emergence and growth to their eventual maturity and decline.
(Ebook, Chapter 8, p. 208). This model consists of 4 phases.
1. Introduction phase:
This is the first stage in the product life cycle. It is characterized by
high fragmentation
The market is still new, so no single organization has the influence to shift the industry in a
single direction, especially as the market is mostly inhabited by smaller firms. There is no
integrated process management framework due to high levels of flexibility (different
approaches, complex
workflows, etc) as opposed to the procedural organizational structures of the older
established firms.
entrepreneurial
Older incumbent firms are less tolerant of ambiguity and risk as they have more to lose in
than smaller firms, which are willing to take chances to generate profit.
high degree of innovation
New industries emerge as the result of changes (usually technological or regulatory) that
create opportunities for entrepreneurs to leverage novel combinations of resources to
develop innovative products, services, or processes.
many small competitors
early entrants tend to be small entrepreneurial firms as large firms tend to lag behind in
entering new industries for two reasons. A budding market is usually too small and risky to
justify the entry of large firms burdened with high over head costs and the need to generate
financial returns. Older incumbent firms are less tolerant of ambiguity and risk as they have
more to lose in than smaller firms, which are willing to take chances to generate profit.
lots of R&D
Firms are intensely focused on research and development (R&D) activities during this
period. This results in a high degree of product innovation with many different versions of
products incorporating different features and technologies. This also leads to confusion for
customers and stakeholders which prevents the market from taking off into the growth
phase.
customers willing to pay a premium
The types of customers who tend to purchase in the introductory phase of the life cycle are
early adopters willing to pay a premium for the privilege of owning a product before most
other people.
, uncertainty about the market
The early years of an industry are generally a tumultuous period where there is tremendous
uncertainty about the future of the market. There is no dominant technology or business
model.
Less rivalry: new entrants are accepted into the new market as it has not obtained a certain
degree of acceptance benefit from the endorsement of recognizable players. Therefore,
organizations are more likely to collaborate in the pursuit of legitimacy.
lack of legitimacy
Being new, small, unknown, or unrecognized can cause a firm to lack legitimacy because it
must prove to outsiders that it does conform to institutional norms. Endorsement from
large organizations gives the market legitimacy and helps it take off into the growth phase.
Stakeholders question viability due to ambiguous environment of the market and society’s
lack of acceptance and understanding.
Examples:
A new technology - that may change the current industry
A new invention - creates a new industry or changes the old one
A new drug - creates a new industry or changes the old one
A change in a government regulation - that affects a new industry being created.
Some industries are the outcome of government regulation (or deregulation) that
creates markets for new products or services.
2. Growth Phase:
This is the second stage in the industry life cycle. The growth stage begins when the market
converges around a single dominant design or approach. The adoption of a dominant design
greatly accelerates the growth rate of new markets.
a dominant design (i.e. standard)
a single architecture that establishes dominance in a product class. In some cases,
technical standards are specified and must be adhered to by all firms wishing to
enter the market. When a standard is legally mandated and enforced by a
government or standards organization, it is called a de jure standard. For example,
the gauge of a railroad track, a light bulb socket, and an electrical outlet.
A de facto standard, on the other hand, arises by virtue of common usage and is not
officially sanctioned by any authority. It is a standard “in fact” or “in practice,” rather
than in law. Microsoft Windows is the de facto standard for personal computer
operating systems because over 90% of the market uses Windows.
shakeout (firms exiting)
This is defined as a large number of exits from the market at the same time as the
aggregate output of the industry increases. A shakeout often occurs as a standard
has been achieved. It is a natural process for an industry as it simply purges and
Note: How to answer case questions.
Identify the correct theory.
Define and explain terms.
Apply the theory to the case.
Use lots of case examples to support your argument. (Use assumptions were necessary). “ALL”
examples are required for FULL MARKS.
Write in sentences and paragraphs. While point form is acceptable, students often do not
receive an A grade for point form, as it is too short and does not provide enough of detailed
analysis and explanation.
Headings and subheadings can also be useful in organizing your answer to separate your
thoughts/ideas. It also helps the marker understand the flow of your answer better from one
thought to the next.
I tend to tell students write MORE not less. I can only award marks for what you actually write
down, not what you may have also been 'thinking.'
, Week 8 Chapter 8: Technology
Industry Lifecycle Model
The industry life-cycle model is known as a research in the fields of economics, strategic
management, and organization theory highlighting how virtually all industries evolve through
specific phases from their early emergence and growth to their eventual maturity and decline.
(Ebook, Chapter 8, p. 208). This model consists of 4 phases.
1. Introduction phase:
This is the first stage in the product life cycle. It is characterized by
high fragmentation
The market is still new, so no single organization has the influence to shift the industry in a
single direction, especially as the market is mostly inhabited by smaller firms. There is no
integrated process management framework due to high levels of flexibility (different
approaches, complex
workflows, etc) as opposed to the procedural organizational structures of the older
established firms.
entrepreneurial
Older incumbent firms are less tolerant of ambiguity and risk as they have more to lose in
than smaller firms, which are willing to take chances to generate profit.
high degree of innovation
New industries emerge as the result of changes (usually technological or regulatory) that
create opportunities for entrepreneurs to leverage novel combinations of resources to
develop innovative products, services, or processes.
many small competitors
early entrants tend to be small entrepreneurial firms as large firms tend to lag behind in
entering new industries for two reasons. A budding market is usually too small and risky to
justify the entry of large firms burdened with high over head costs and the need to generate
financial returns. Older incumbent firms are less tolerant of ambiguity and risk as they have
more to lose in than smaller firms, which are willing to take chances to generate profit.
lots of R&D
Firms are intensely focused on research and development (R&D) activities during this
period. This results in a high degree of product innovation with many different versions of
products incorporating different features and technologies. This also leads to confusion for
customers and stakeholders which prevents the market from taking off into the growth
phase.
customers willing to pay a premium
The types of customers who tend to purchase in the introductory phase of the life cycle are
early adopters willing to pay a premium for the privilege of owning a product before most
other people.
, uncertainty about the market
The early years of an industry are generally a tumultuous period where there is tremendous
uncertainty about the future of the market. There is no dominant technology or business
model.
Less rivalry: new entrants are accepted into the new market as it has not obtained a certain
degree of acceptance benefit from the endorsement of recognizable players. Therefore,
organizations are more likely to collaborate in the pursuit of legitimacy.
lack of legitimacy
Being new, small, unknown, or unrecognized can cause a firm to lack legitimacy because it
must prove to outsiders that it does conform to institutional norms. Endorsement from
large organizations gives the market legitimacy and helps it take off into the growth phase.
Stakeholders question viability due to ambiguous environment of the market and society’s
lack of acceptance and understanding.
Examples:
A new technology - that may change the current industry
A new invention - creates a new industry or changes the old one
A new drug - creates a new industry or changes the old one
A change in a government regulation - that affects a new industry being created.
Some industries are the outcome of government regulation (or deregulation) that
creates markets for new products or services.
2. Growth Phase:
This is the second stage in the industry life cycle. The growth stage begins when the market
converges around a single dominant design or approach. The adoption of a dominant design
greatly accelerates the growth rate of new markets.
a dominant design (i.e. standard)
a single architecture that establishes dominance in a product class. In some cases,
technical standards are specified and must be adhered to by all firms wishing to
enter the market. When a standard is legally mandated and enforced by a
government or standards organization, it is called a de jure standard. For example,
the gauge of a railroad track, a light bulb socket, and an electrical outlet.
A de facto standard, on the other hand, arises by virtue of common usage and is not
officially sanctioned by any authority. It is a standard “in fact” or “in practice,” rather
than in law. Microsoft Windows is the de facto standard for personal computer
operating systems because over 90% of the market uses Windows.
shakeout (firms exiting)
This is defined as a large number of exits from the market at the same time as the
aggregate output of the industry increases. A shakeout often occurs as a standard
has been achieved. It is a natural process for an industry as it simply purges and
