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Winning by Coming in Second

Technology Futures, Inc.
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Maximizing the Advantages of a Fast Follower Strategy

Although there are many good reasons for companies to be the first to offer products and services based on new technologies, there are occasions when this approach is not practical. For example, the company may not have the resources to develop the new technology on its own, potential markets may not be sufficiently defined, and the technical potential of the new technology may not be clear.

However, if a company decides to utilize a "fast follower" rather than "technology leader" approach, it must have a strategy that is as carefully crafted and as intelligently executed as that of its more aggressive competitors. Moreover, the company must have an extremely effective surveillance program, since the product initiative will lie with the competition. For more than twenty years, Technology Futures, Inc. has been assisting major companies in analyzing the implications of strategies based on rapid entry into markets opened by competitors and in determining how those strategies can best be implemented. One example of the ability of TFI to provide such services is illustrated below.


Challenge

Recently, the executives of a major chemical company were faced with a critical strategic decision. Two of the company's major competitors had announced the development of a new production process that resulted in improved products and promised, in time, to also reduce the price of production. The competitors had already begun to use the new process themselves and had offered to license the process to other companies, but under very restrictive and expensive terms. The company was faced with several options:

Choosing the strategy would depend on their evaluation of how rapidly the new process would be adopted, the size of the total market over time, how much of the total market would be at risk, and the rate at which progress would be made to improve the technical and economic parameters of the new process. Because of the need to make a reasoned decision in a timely manner, company executives called on TFI to assist them in determining an appropriate course of action. The objective of this project was to determine the impact the new process would have on current operations and on potential new business over the next 10 years.


Project Activities

In the conduct of this project, TFI and company personnel worked together to:


Project Results

Based on the analysis described above, TFI and the client company arrived at the following conclusions:


Actions Taken

In order to ensure future market growth, the company decided that it must establish an early position. Therefore, it elected to enter into an agreement with another company to develop a new, competing process.


Relevance to Your Organization

Since its establishment in 1978, Technology Futures has been assisting its clients in accomplishing tasks of the type described above. During this period, TFI has developed a toolkit of more than 20 techniques and methods that it uses to assist its clients in developing practical, profitable strategies. A project of the type described above typically can be conducted for between $30,000 and $60,000. Such projects are normally completed in 60 to 90 days, with preliminary results available in about 30 days.

If you believe that TFI could be of assistance to your organization in identifying and evaluating new product opportunities and in developing strategies for bringing these products to the marketplace, please contact John Vanston, Larry Vanston, David Smith, or any other member of the TFI consulting staff. (800) 835-3887

Copyright © 1998, 2000, 2002, Technology Futures, Inc.
All rights reserved. Published January 1998. No part of this white paper may be reproduced in any form or by any means, other than short quotes to be used in reviews, without express permission from the publisher.