Every company aims to achieve an edge over the competition in today’s hyper-competitive environment. But gaining a competitive advantage over competitors has become quite challenging due to the versatility of buyers. A competitive advantage allows a business to manufacture products or services more effectively or at a lower cost than its competitors. It enables the competitive entity to achieve greater earnings or margins as compared to the rivals.
There are several possible strategies to achieve a strategic edge in any industry. The most lucrative companies rely on technology leadership approaches. A new competitive landscape is emerging due to increased global competition and rapidly evolving markets and technology. Thus, technology leadership can help businesses gain a more sustainable competitive advantage than other approaches. Companies that focus on technology leadership facilitate learning and improving processes by utilizing suitable technological solutions and resources. They are the ones who initially adopt or create new technical and innovative means, paving the way for technology followers.
With technological advancements and IT evolution, several major companies are rethinking IT to capture market share, introduce competitive goods, and improve services. These developments are fantastic news for small companies or startups willing to disrupt the market. They can often reap the same IT benefits as their larger counterparts. But to embrace technology leadership, companies must hire the best talent available in the market to help them achieve such leadership. Therefore, they must approach individuals having a technology management MBA who are well-aware of emerging technologies and market needs.
Advantages of Technology Leadership
The scope of businesses is evolving due to technological advancements. It influences the entire process through which companies manufacture their goods and services. Furthermore, it is reshaping the product itself: the whole bundle of physical products, services, and knowledge that companies offer to their customers to generate value for them.
Your business can gain a sustainable competitive advantage through technological advancement, which can help you cement your place as a market leader. There are many advantages of technology leadership, some of which are:
1. First-mover advantage
A business that is the first to bring a product or service to the market gains a competitive advantage known as the first-mover advantage. A company’s first-mover advantage allows it to create strong brand awareness and product/service loyalty ahead of other market entrants.
Being the first company to put a plan into action has several benefits. First movers have time to alter and refine their products ahead of rivals, create economies of scale, and establish a solid business base by being the first to market. Early adopters can also define their product as the industry norm. Connecting with customers first and leaving a lasting impression can contribute to brand awareness and loyalty.
Early adopters will make it more difficult for later entrants to copy their technology/product/services. Patent applications can also defend and create a first-mover advantage through technology leadership. For example, suppose the first mover can lower production costs by deploying a versatile technology. In that case, the first mover can gain an absolute cost advantage.
2. Cost advantage
A company with a cost advantage can manufacture a product or service for less money than its competitors. Technology, automation, procedures, worker efficiency, and resources are all factors that influence costs.
A company can achieve a competitive edge by using a low-cost leadership strategy since its goods will be less expensive than its rivals. Cost advantage aided by technology leadership is attainable through low-cost product designs and low-cost processes or methods for performing the required operations. And that’s what technological means and resources provide. For instance, quick workflow thanks to technology result in cost reduction.
A company can achieve a cost-benefit by moving first with the implementation and utilization of technological solutions. Industry leaders are those businesses that stay ahead of the competition by developing and implementing new technology early.
Technological innovation is how a company designs or creates a product/service whose technological features are distinct and unique from previous ones. It goes beyond products and services, encompassing processes and functions. Companies can innovate and redefine several essential business functions and procedures utilizing innovative technological means. It necessitates ongoing research and development of new technologies and methods. Technology leadership can result in higher-quality, distinctive features, and less-expensive products/services.
Innovation is crucial to ensure a competitive advantage for businesses in almost all sectors and environments.
4. Making competitors irrelevant
According to Michael E. Porter, technology has enabled the production of features that are so different that they cause competition to shift dramatically in some industries. The old ground rules of the competition are drastically altered by radical cost reduction due to businesses’ deployment of technology. For example, file-sharing programs like Kazaa, Napster, and LimeWire enabled a flood of illegal music file-sharing that started in the late 1990s. With the release of iTunes in 2003, Apple capitalized on this solid trend. Today, iTunes controls over 60% of the global digital music download market.
How to utilize technology leadership in today’s online world
1. UX Design
For consumers engaging with your product or service, user experience (UX) is becoming increasingly important. Using this data to design your offering could help you gain a long-term competitive advantage. To monitor consumer activity and understand UX preferences, you can use online monitoring and analytics tools.
2. Automating Processes
According to digital transformation research, the most significant technology effect is achievable through redefining a company’s internal operations. All back-office functions can be automated with technology, making workflows better, quicker, and less expensive. Customers’ data is now collected, and the organization can quickly engage, update, and follow up with order notifications.
3. Leveraging Data Analytics
Advanced data analytics technologies can help you monitor user experiences, better understand your clients’ needs, and refine your marketing efforts. It gives you a long-term strategic edge over competitors.
Technology is assisting in reshaping the business environment worldwide. However, not every company is ready to be a technology pioneer, and not every company can profit from technology leadership. It all comes down to the level of adaptability and the available resources to incorporate technology. If a company decides to become a technology pioneer or follower, it positions itself to succeed. Therefore, it is essential to identify whether a company can benefit from being a technology leader or follower and then strategize.