Resotech Inc.
Resotech Inc.
Time is a critical strategic challenge. For example, assume you are a customer being interested in a particular product. This product is very expensive and long lasting. It’s capacity is more than you need. Once you’ve bought it, you can use it for decades. Even product improvements and new versions would only rarely make you buying a new one, simply because they’re incredible expensive. A secondary market to sell the product might exist, but anyway you’d have to sell it at a discount due to technology improvements. The main question for you as a consumer is the following: How many products do you buy? The answer is simple: One.
What does that mean for companies offering solely such a product? If a customer buys a particular product only once and stays with it, only one company can serve this customer. The company, that first sells to him or her, wins. The competitors have no chance to convince the customer to switch or to buy the next time from them, since there is no next time. This reveals our strategic challenge: Time. If a company is the first launching a product, it has a first-mover-advantage. If a company is second, a part of the market is already served, hence, the total demand and the maximum revenues decreased.
How can companies be successful in such an environment? There’s only one way: Be the first! Either because there’s no follower (you’re a monopolist), or because you launch the product earlier than your competitors do. This implies for any company that whatever it does, it must ensure that the product is launched before the competitors launch their products (staying out of the market is no option since it’s the company’s only product). This brings us to the question of available resources. How many resources you have to invest to be the first mainly depends on how many resources your competitor’s are investing. Moreover, if they suddenly increase their investments trying to outpace you, you should be able to react.
What does
Time is a critical strategic challenge. For example, assume you are a customer being interested in a particular product. This product is very expensive and long lasting. It’s capacity is more than you need. Once you’ve bought it, you can use it for decades. Even product improvements and new versions would only rarely make you buying a new one, simply because they’re incredible expensive. A secondary market to sell the product might exist, but anyway you’d have to sell it at a discount due to technology improvements. The main question for you as a consumer is the following: How many products do you buy? The answer is simple: One.
What does that mean for companies offering solely such a product? If a customer buys a particular product only once and stays with it, only one company can serve this customer. The company, that first sells to him or her, wins. The competitors have no chance to convince the customer to switch or to buy the next time from them, since there is no next time. This reveals our strategic challenge: Time. If a company is the first launching a product, it has a first-mover-advantage. If a company is second, a part of the market is already served, hence, the total demand and the maximum revenues decreased.
How can companies be successful in such an environment? There’s only one way: Be the first! Either because there’s no follower (you’re a monopolist), or because you launch the product earlier than your competitors do. This implies for any company that whatever it does, it must ensure that the product is launched before the competitors launch their products (staying out of the market is no option since it’s the company’s only product). This brings us to the question of available resources. How many resources you have to invest to be the first mainly depends on how many resources your competitor’s are investing. Moreover, if they suddenly increase their investments trying to outpace you, you should be able to react.
What does