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Innovation and dynamics - Coggle Diagram
Innovation and dynamics
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early and late movers
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early mover advantages: enjoy scale and experience curve advantages, pre-emption of scarce assets, build reputation, lock-in customers, exploit network effects, set standards/rules of game
latemover advantages: freeride on others efforts, learn from earliers mistakes, uncertainty resolved, can afford to wait
correct timing is difficult, depends on product as well, window of opportunity
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disruptive innovation
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disruptive innovation
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initially worse, will improve over time
disruptive: incompatibility with current value proposition and business model, will be more highly valued by different customers
summary: innovation and dynamics have large implications on strategic management. strategic drift is something very important for companies to avoid because once you lag too far behind it is much harder and more expensive to catch up. On the opposite side you have disruptive innovation which for a while is "too far" ahead and thus it is initially worse and not wanted by current customers and doesnt fit into current business models, but it will improve over time and it might create a competitive advantage over other companies facing strategic drift and the failure to change e.g. apple and nokia.Timing is also very key as you do not want to be too early or too late with market entry or strategic changes or disruptive innovation. It is also very important to keep up and not lag behind "correct timing"