Keeping the U.S. Computer Industry Competitive Defining the Agenda (1990) / Chapter Skim
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5. Business and Marketing
5. Business and Marketing
Pages 50-63
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From page 50... ...
As an industry matures, however, manufacturing efficiency, sales, marketing, and other factors become the critical ingredients of competitiveness. "In many cases," observed Lawrence Tester of Apple Computer, "we lost our competitive edge not because of technology, but because of better management and smarter strategy." "Increasingly, market success depends on early product introduction to determine customer requirements," observed William J
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From page 51... ...
firms to capitalize on innovations that later proved tremendously successful in foreign-manufactured consumer products. Among the many legendary examples is the Japanese dominance of global markets for video recorders, invented by the Ampex Corporation in 1956.
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From page 52... ...
Morris of Carnegie Mellon University described the evolution of the user-friendly human interface embodied in Apples highly successful family of Macintosh computers. Like many other innovations, it originated in an organization that can lay claim to many of the technological advances that underlie successful products, but the innovating firm did not guide the technology to commercial fruition.
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From page 53... ...
Many of the embryonic components of the user interface technology were embodied in Xerox's experimental ALTO computer of the early 1970s. Eventually, the company introduced the Xerox 8010 Star System, the first commercial product to feature the interface that is now used in virtually all computer workstations (see Figure 5.1~.
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From page 54... ...
Morris's examination of failed attempts to transfer technology internally yielded several common themes. Contrary to conventional thinking, Morris explained, many commercially successful ideas-at least in the software industry did not originate with small start-up firms, but rather they were the offspring of "rather large research investments made by rather big companies." Start-up firms, however, often succeeded where established fens failed: They developed good ideas into cost-effective products.
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From page 55... ...
Much of the success of Japanese firms in global markets can be attributed to their mastery of the competitive elements that support the commercialization of innovations. Design cycles and the time needed to develop manufacturing proficiency for a new product are often faster in Japan than in the United States.
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From page 56... ...
Complementary capabilities will become especially critical as more computer products evolve into commodity products, as many at the colloquium predicted. In commodity markets, Teece said, "manufacturing matters.
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From page 57... ...
But failure to cooperate and to make necessary assets available domestically results in tactical decisions that benefit individual firms but may eventually harm the entire sector. Thus, as the international push for standardization grows and as computers come to resemble consumer commodities, "cooperation becomes increasingly important," facilitating the strategic thinking and investments that were absent during Japan's rise to dominance in DRAM production, Teece maintained.
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From page 58... ...
As colloquium participants noted, the issue is clearly recognized as one directly affecting the health of the entire computer industry. Each responsible party, from the federal government to individual firms, must act, participants emphasized.
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From page 59... ...
In retrospect, for example, start-up semiconductor firms appear to have destabilized the industry and have lacked the resources to continue developing the manufacturing expertise necessary to stave off the challenges of betterfinanced and better-organized Japanese competitors.3 Had the U.S. semiconductor industry undergone consolidation, the argument continues, the resultant vertically integrated firms would have been in a strategic position to meet the competitive challenge.
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From page 60... ...
Venture capital provided much of the seed money that led to the U.S. computer sector's flush of growth during the 1970s and early 1980s, giving rise to such firms as Digital Equipment Corporation, Apple Computer, Microsoft, and Sun Microsystems.
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From page 61... ...
In the short-term, consolidation will appear to promote greater efficiency in the industry, he explained, noting that a reduced flow of venture capital creates the need for more cooperation within an industry. Hambrecht also sounded a warning, however: As the entry of new firms decreases, established firms will slow their product development efforts to increase their
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From page 62... ...
COMPUTER INDUSTRY COMPETITIVE r\\\\\~\\\\\\\\\\\\\~\\\~\\\\\\\\\ I _ F\\\\\\\\\\\\\\\\\\\\\\\\\\\\\~ ;-; ;-;-;-;~;-;~;~;~-;-;-;~;-;-;-;~ ;~;~;~;~ ;-~-e ~ __ rat ..................................
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From page 63... ...
automobile, textile, and consumer electronics industries, sets the stage for increased competition from foreign fimns, according to Harnbrecht. Hambrecht's outlook for the software industry is considerably brighter.
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