Introduction
Business organizations are increasingly embracing the application of technology so as to obtain a competitive edge in the industry they do operate. Organizations have two options when choosing the approach to use; one is either to be a technological follower or leader. Technological leader leads the way in adopting an innovation while a technological follower copies the competitors’ products. There are some pros and cons that accrue to the technological leader as well as to the technological follower.
One of the key pros to the technological leader is to gain a differentiation competitive edge. For instance, Nike Inc. demonstrated an effective use of the leader research and development functional strategy. Nike incurs more costs in its industry in the manufacture of sports shoes and, as a result, it enjoys the biggest market share than its competitors. Secondly, the technological leader will improve its relations with the customers as well as suppliers. Companies like Generic Electric utilize information technology to communicate with customers and suppliers to listen to their needs and address their concerns (Fai 1082). The other advantage of being a technological leader is low-cost in the process of manufacturing. Application of leader R&D functional strategy enables it to attain a cheap competitive advantage than the competitors. The con associated with being a technological leader is that competitors imitate the innovation of the leader by working with the suppliers to trim down costs. Companies utilize alliances with corporate and academics labs to create new products and processes in a new approach known as open innovation.
The con of being a technological follower is that the follower needs not to invest heavily on the internal R&D to develop an innovation. Before the technological follower adapts the innovation, it only studies how the leader’s innovation then improves it to fits its internal strategies. The approach is relatively cheap in comparison with engaging in research and development. A technological follower will fail to realize its strengths by imitating the technological leader strategy. The technological follower company will never get a break through because the leader will always be ahead technologically (Sabol, Šander, & Fuckan 639). Fujitsu Ltd has never outsmarted IBM in the computer manufacturing industry as the former is primarily devoted to competing with the later. In addition, Fujitsu Limited has failed to search for other ways that would have given it the competitiveness.
Precisely, it is clear that, it is better for an organization to be a technological leader rather than being a follower. Companies that tend to follow a technology already adapted by another company will not always gain the competitive edge. For instance, UPS followed the FedEx in adopting software that improves the sales in the later organization. Unfortunately, UPS sales did not increase beyond that of FedEx.
Works cited
Fai, Felicia. "A structural decomposition analysis of technological opportunity, corporate survival, and leadership." Industrial and Corporate Change 16.6 (2007): 1069-1103.
Sabol, Andrija, Matej Šander, and Durdica Fuckan. "The Concept of Industry Life Cycle and Development of Business Strategies." Active Citizenship by Knowledge Management & Innovation: Proceedings of the Management, Knowledge and Learning International Conference 2013. ToKnowPress, 2013.
