When a company unexpectedly finds itself losing market share and taking a beating at the hands of its competitors, it’s a clear signal that a change is needed. For a variety of reasons, any company can suddenly lose the competitive advantage that it previously enjoyed. (36) The mark of a strong business, however, is its ability to overcome such setbacks and reclaim its positions as the front runner in its field.
One of the greatest variables in the process, however, is technology, which on one hand makes business more efficient and thus profitable than previously thought possible, but changes at such a rapid pace that few businesses utilize it to its full potential. Those companies that invest heavily in the latest technology of the day may find their machines out dated and obsolete the next year, thus losing the advantage that they hoped to gain, and also a substantial amount of investment money as well. (37) Those who are more cautious and buy less of the latest machine may learn that technology changes more slowly, and their competitors who invested more heavily now hold the upper hand. It’s a game of hit or miss.
Because of the uneven and unpredictable pace of progress between technological fields, (38) companies are devoting more and more resources to not only acquiring more of the latest developments, but researching the factors that determine their production so as to position themselves better to adapt to the next change. This strategy has been producing positive results for those who employ it, but it is a massively expensive one, limiting its viability to only the largest companies, who are already enjoying many advantages in the market.
Such dynamics make it increasingly difficult for new setup companies to break into established markets, lacking the funding and cash reserves necessary to play the game way as the big boy do. The same technology that keeps the large companies on top, however, can still topple them. (39) New and smaller companies have less to lose and thus can afford to gamble on new technologies that larger companies consider too risky to devote themselves to. (40) In the rare occurrences when these risky endeavors bear fruit, providing themselves with the way of future, the rewards to those daring enough, or small enough, to invest in them prove well worth the effort.
