Technology Management

Technology as an important driver of industry structure. Technology has a substantial role to play in any of the five forces of the competitive landscape.

The impact of technological change on the threat of substitutes is obvious. New technologies create entire new products and industries that can compete with/substitute for existing industries.

Technological change impacts on entry barriers through: Raising or lowering economies of scale (e.g. flexible manufacturing systems), Having R&D costs as an entry barrier, Processing innovations that directly impact the learning curve, Acting as a source of product differentiation, thereby decreasing entry barriers, Raising or lowering buyer switching costs by requiring technology-specific assets or skills by buyers (e.g. JIT).

Technology change can influence buyer power by: Acting as a source of product differentiation Influencing switching costs, Influencing forward/backward integration (e.g. technology making the printing industry less asset-intensive, and increasing the feasibility for many traditional buyers of printing services or the Internet, allowing manufacturers to bypass traditional distribution channels).