The theory of multiple dimension value will be used to understand the selection Of dominant designs in the market. Sony’s Blu-ray and Toshiba’s HD-DVD was almost similar to each other yet poles apart in terms of compatibility with the complementary products. Blu-ray was compatible with almost most of the complementary products while with HD-DVD compatibility came with a higher cost. Further in this essay, the factors that influenced consumers, retailers and movie producers to support or choose Blu-ray rather than HD-DVD will be discussed briefly.
The second case study is about ollaboration strategies which are explained with the example Dyesol: partnership to harness the power of the sun, which is focused mainly about their joint ventures with the Tata group and Pilkington. Dyesol had a huge impact when they collaborated with Tata steel and Pilkington. With Tata steel they developed the world’s largest dye sensitized solar cells (DSC) module which was printed onto steel in a continuous line. Their joint venture with Pilkington was called DyeTec solar which produced DSC’s coating on architectural glass to create the photovoltaic functionality (Schilling, 2013, p. 52). Later on in this essay the impact, advantages and disadvantages of a firm going into a joint venture or collaboration with other companies will be discussed. QI . Analysis Dominant designs can be defined as a product or a technology that has the benefit of being monopolistic over other similar products that are comparable. Their monopolistic benefit in the market gives them a great market value which makes the competitors opt for impersonation to stay in the market and not lose their market position or even to defeat the product they impersonated.
When the increasing returns for a product or a echnology are high, it shows the acceptance of the dominant design. Factors that contribute to increasing returns are absorptive capacity, strategic maneuvering, network externalities, learning effects and government regulations (Schilling, 2013, p. 73). Multiple dimensions of value (MDV) are forms of multiple elements that have a value; the types of MDV are stand- alone values and network externality value.
From the case study “Blu-ray vs HD-DVD” it is very well understood that Sonys Blu-ray had defeated HD-DVD and succeeded the MDV along with influencing their consumers, retails, and ovie producers and thus they became the dominant design in the market. More on how consumers, retailers and movie producers were influenced and supported blu-ray vs RD-DVD will be discussed next. l. Consumers: The distinctive factor that made Blu-ray different from Toshiba’s HO-DVD was its backward compatibility that made Blu-ray compatible with both CD and DVD players, which helped them gain a lot of customers.
Another add on factor would be that the Blu-ray users had a lot more variety of choices in terms of the movie available rather than HD-DVD. Blu-ray also has inbuilt emory that could store up to 25GB and the double-layer disc holds a capacity up to 50GB, while HD-DVD could hold up only 15GB which could be stretched up to maximum 30 GB (Robert Silva, 2007). The PS3 came with inbuilt Blu-ray device whereas the HO-DVD came with an optional add-on drive for the Xbox 360 (Schilling, 201 3, p. 65). II.
Retailers: Retailers preference usually drive according to the flow Of demand Of the consumers since they have to satisfy consumer needs according to consumer’s taste and preference, which automatically makes them support Blu-ray. Retailers mostly paid attention to maximizing profits. Another reason would be Blu-rays distinguishing features like the storage capacity; improved picture quality initiated large retail chains such as Best Buy, Wal-Mart, and Netflix etc. switch from HO-DVD to Blu-Ray. Ill.
MOVie producers Eventually due to consumers preferences and demands and due its distinctive features; Warner bros company being a big and famous production house in the west declared that they were going to opt for the Blu- ray format which caused a chain reaction that led the other mainstream production houses such as Paramount pictures, DreamWorks Animation, universal pictures, and Disney etc. o switch to Blu-ray as well, which was proved to be a big and an unexpected downfall for Toshiba’s HDDVD (schilling, 2013, p. 65). Some of the basic features of Blu-ray and HD-DVD are mentioned in the table below (Wilson, 2015) (schilling, 2013, p. 5). Blu-ray RD-DVD Blue laser light format. Shorter wavelenght Can read denser information Same options for audio and video compression. More storage; inbuilt 256B ,50GB on dual layer disc. Less Storage; 15GB inbuilt stretchable to 30GB. When launched was very expensive since it couldn’t be used on pre-existing equipment. When launched caused around $400 further dropped to $290. One of the main reasons as to why and how Sony’s Blu-ray was huge success against Toshiba’s HD-DVD was due to the way they managed the multi- dimensional value according to ongoing situations.
They also kept adapting to a number of methods according the dynamic environment to stay on the top and gave its technology a high value in the market. Since they served to the consumers, retailers and movie producers interest and preference they were able to achieve their goal of attaining their dominant design position. Like mentioned above, in January 2008 after Time Warner of the Warner bros roduction house declared that they are opting for Blu-ray format which led a chain of reaction among other production houses. Even the retailers had opted out.
Wal-Mart also announced in January 2008 that they wouldn’t sell anymore HD-DVD. After all this later in February 2008, Toshiba had announced its withdrawal of HD-DVD from the market clearly ending the “next generation format war” and marking the success of Songs Blu-ray also making it a dominant design (The Guardian, 2008). Another major reason for their success and position is due to factors such as network externality, trategic planning, and speed of adaption played an important role. The acceptance in the market also led prices of Blu-ray to drop to $128 from $3800.
Entering the market early also played an important role in their success. The above graph shows the market shares of Blu-ray and HD-DVD for the years 2006 and 2007 (Ben Drawbaugh, 2008). Q2. Analysis Moving on to the second case study Dyesol: partnership to harness the power of the sun, which talks about collaboration strategies. Dyesol Limited is an Australian clean-tech company developing cutting-edge, clean energy generation solutions established in 2004. They invented the Dye sensitised solar cells a nanotechnology which can generate electricity like how plants conducts photosynthesis (Dyesol, 2015).
From the case study we can understand that Dyesol’s main collaboration or joint ventures was with Tata Steel and Pilkington. Tata steel which is a subsidiary to the Tata group a global enterprise found in 1868 which has a base in India with over 100 companies in seven different business sectors (Tata Steel, 201 5). Dyesol’s collaboration with Tata was called Tata-Dyesol. Dyesol had collaborated with Tata to produce a dye sensitised solar cells (DSC) module onto steel in a ontinuous line. In 201 1 Tata and Dyesol had developed the largest DSC module.
Pilkington being a multinational glass manufacturer found in 1826 gained their first success in 1 950 with the development of float glass process. Pilkington is a leader in the global Flat Glass industry currently (Pilkington, 2015). Pilkington is also the largest sheet glass maker in the world (Schilling, 201 3, p. 1 52). Dyesol’s collaboration with Pilkington was called DyeTec. Dyesol’s collaboration with Pilkington was 50-50 joint venture. Dyesol collaborated Pilkington to borrow its coated sheet glass and together they reated coated sheet glass solar panel that had been created for the first time in the market. (Schilling, 201 3, p. 52). Firms collaborate with other firms because of various reasons some being to expand the business into new ventures or to diversify their products. Other reasons maybe to improve their existing products quality or to come together to create a new and innovative product. There are also several types of collaboration, some are joint ventures, licensing, outsourcing, collective research organizations and strategic alliances (Schilling 2013, p. 158). The type of collaboration Dyesol pted for was a 50-50 joint venture with Pilkington, and a joint partnership with Tata. The advantages and disadvantages of collaboration will be discussed below.
Advantages of collaborating with external partners: 1 . Access to manufacturing expertise and capital: When companies collaborate, they tend to share financial costs and benefits equally, with such an advantage the burden of costs will not fall on one company fully making it less risky if any loss occurs. They also share and learn knowledge about each other’s company and products. Tata experience came in help for Dyesol uring their collaboration which contributed to their success. 2. Awareness: collaboration also helps in spreading awareness about the companies to others.
Dyesol’s collaboration with Tata steel and Pilkington which were a very well established companies helped spread awareness about the DSC technology since they are in many markets previously, thus helped them enter new markets. 3. Goodwill and brand image: As mentioned above Tata and Pilkington being a well established company which already had a huge brand image and goodwill gave dyesol a push in their brand image adding it to its goodwill. 4. Create innovation: When companies collaborate, their ideas, knowledge and expertise also collaborate, which then helps them creating a new and innovative product for the market.
Thus explains how DyeTec solar and the world’s larget DSC module was created. Disadvantages of collaborating with external partners: 1 . Risk: there is always risks that that the other company may reverse engineer the product or technology Of the other which will further cause patent troubles and disputes among the companies. As mentioned in this case study, there a risk that Tata’s chemical business may create a similar echnology like the DSC module and sell it to the market. And if such a situation happens it’s going to be difficult for dyesol to cope with the competition Tata will give due it’s establishment in the market.
There is also a high risk of uncertainty because not necessarily all new and innovative product becomes successful, it could either way, keeping the situation of Pilkington in mind, it was the first time that a solar cell coated sheet glass panels were going to the commercial market. If it hadn’t been successful it would have been a huge loss for both the companies. . Time consumption: Due to research and development a lot of time is consumed since they have to cross check every possibility to achieve efficiency and try to eliminate possible risks. . Cost: Like said earlier when companies collaborate to create a new product or technology, they often invest into research and development which sometimes turns out expensive. Also the materials and supply also cost them a lot. Conclusion By concluding this essay we can say that with the proper identification and analysis of MDV framework Blu-ray was able to win over the dominant design. Sony had very well looked into their stand-alone value and network externality value to find their way through competition to immense success.
Another reason would be that paid attention to maintain their increasing returns to adoption factor. They were able to stabilize their market position and increase their acceptance rate among their targets; consumers, retailers and movie producers. Moving on to Dyesol and its collaboration strategies, the creators of the dye sensitised solar cells (DSC) were focused on collaboration to create new and innovative products for the market. Their ain and notable collaborations and joint ventures were with Tata steel and Pilkington.