Technology and the Firm

Knowledge@Wharton reports on a talk given by CK Prahalad:

The old game was about a focus on efficiency. The new game must take into account not only new technologies but such forces as deregulation, globalization and emerging markets, including China and India. Among those new forces, Prahalad highlighted the convergence of traditional industry values that comes from the blurring of lines between various kinds of products and services.

“The fusion of new and old knowledge is creating hybrids, Prahalad noted. Companies respond by putting every possible feature into a device [or product] But there is cognitive dissonance from the enormous complications. The good news is that there is tremendous product variety. The bad news is, experience is the essence of value, not features. Customers are often frustrated and displeased because they feel there is a better one another newer product out there already or about to come out soon.

The lesson for strategists, said Prahalad, is that the definitions of the industry are driven by consumers and not by the companies. [Individual] consumers are making their choices, not you [strategists]. Each consumer is picking his or her own portfolio of products and services and defining the limits of the sector to meet his or her needs.

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Something different on this Sunday morning. I have noticed that over the years my breakfast has become more elaborate, with the other meals becoming lighter. My breakfast toggles between Kellogg’s cereals (Raisin Squares with another add-on from a multiplicity of options) and Indian cereals. The Raisin Squares are becoming increasingly hard to find – it was after nearly a year that I found them in a store in London and loaded up on the boxes! Along with cereals and milk, there are some almonds, a banana and Laughing Cow cheese. The last item is a recent add-on. I used to eat it earlier in life, and decided to make it a regular part of the breakfast menu.

I read the morning newspapers on the breakfast table. Increasingly, I am finding that there’s little interesting stuff to read – the Net and radio keep me well-informed of what’s going on. I do a quick scan of about 6 newspapers at breakfast in about 10 minutes – this is more out of habit, than delight. Its the one part of breakfast that is not as satisfying!