This week’s discussion focus is
technology innovation, through the use of examples that we research and share.
Before we begin this discussion, please review an example of a company who used
strategies to exploit a new era of digitalization and benefited from it,
“Lowering the Cost of Ultrasound Equipment through Digitalization.”
This example shows how a company reached a previously untapped market niche by
digitalizing a product, which also allows the firm to reduce expenses. Thus,
digitalizing can support a firm that is pursuing a simultaneous advantage in
differentiation and cost leadership.
Managing Innovation Example
The ultrasound unit is an important diagnostic tool, producing images of
organs. The technology is very valuable, but the equipment is bulky, heavy, and
expensive, so it is used primarily in dedicated hospital facilities. ATL, a
leading ultrasound company, decided to reduce the size of an ultrasound set-up
to about the size and weight of a laptop computer. This would be accomplished
by replacing many of the machine’s solid circuits with software (in a process
called “digitalizing”), reducing size and costs. The researchers reasoned that
a portable and inexpensive ultrasound unit would find market opportunities in
totally new niches. Smaller size and lower cost would allow the units to be
placed on ambulances or into physician’s offices – market niches that were
impossible to reach with the technology of the day. The researchers later
became part of a project team within ATL, and thereafter became an entirely new
company, SonoSite. Late in 1999, SonoSite introduced its first unit, which
weighed just 6 pounds and cost about $25,000. SonoSite targeted niches that
full-sized ultrasound products could not reach: ambulatory care and foreign
markets that could not afford the more expensive equipment. In 2010, the
company sold over $275 million of product.
Now it’s your turn, research a company that has managed an innovation and
provide the story. Include, The company, the technology, the impact made with
the innovation and short history of the industry and need for the innovation.
Along with providing your example, please answer the following question:
- How are companies coming up with strategies to exploit
and benefit from the new era of digitalization?