The Competitive Status of the U.S. Auto Industry A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1982) / Chapter Skim
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3 The Evolution of Technology: From Radical to Incremental Innovation
3 The Evolution of Technology: From Radical to Incremental Innovation
Pages 35-50
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From page 35... ...
This evolution of the automobile industry from a state of technological diversity to one of standardization -- and, for that matter, from a state of rapid and at times radical change to one of incremental innovation -- is neither a random event nor an event pecu1 far to the automobile industry. The history of many industries and of many individual products shows the same development toward mature standardization from an earlier, more f luid condition.
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From page 37... ...
The development of technology from the fluid to the specific or mature state is initially a process of successive selection among competing design concepts; at the latter stages, it consists of refinements and extensions of concepts currently in use.2 In identifying the nature of technical change associated with this pattern of evolution, it is helpful to distinguish between radical and incremental innovation. As used in this analysis, product innovation is labeled "radical" if it cannot be produced effectively in the existing production process.
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From page 38... ...
It is clear that a critical point in the transition from fluid infancy to standardized maturity is the development of a "dominant product design" -- a synthesis of earlier innovations and design concepts that achieves significant market acceptance.4 Both in components and in systems and overall product configuration, a dominant design permits standardization and economies of scale and, thus, introduces cost as a major aspect of competition.
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From page 39... ...
Even though from a technical or engineering standpoint developments in such materials as grey cast iron may have been significant and even revolutionary, little change in basic manufacturing processes was required to implement a new material. The standardization of the engine was intimately related to changes in the engine production process.
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From page 40... ...
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From page 41... ...
These advances have occurred within the context of a relatively stable product design and continued specialization or dedication of a particular production line to a particular engine. The Body and the Assembly Plant The process of technical development played out in the engine-establishment of dominant design, refinement, and extension -- was repeated in the other major technical systems of the vehicle.
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From page 42... ...
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From page 43... ...
The dominant overall configuration included a large V-8, water-cooled, frontmounted gasoline engine, with rear-wheel drive, automatic transmission, and a comfortable roomy interior. Throughout the era of the all-purpose road cruiser, improvements in technology (as opposed to, say, the great changes in sheet metal usage and appearance)
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From page 44... ...
Major developments in the technical systems that achieved market dominance were those that reduced costs, increased comfort, and eased operation. Model changes in the pre-World War II years were more important competitively than in later years when designs stablized, but the market in the 1920s and 1930s did not demand continuing advances in the technical sophistication of the product.
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From page 45... ...
and m otivated by distinctive domestic tastes and preferences, the European auto firms developed sharply differentiated products with distinctive national characteristics. Thus, the major German firms produced cars that were quite different from those developed by the French.
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From page 46... ...
I ~ ~= Awry `o ra~ona~ze His European operation led Ford to develop a truly European product line and to coordinate its European production facilities. As in the United States, Ford sought to decrease the underlying technological diversity of its European products at the same time that it increased their variety in styling and appointments.
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From page 47... ...
While not as technically sophisticated as some of the leading European firms, the Japanese have developed very reliable vehicles of acceptable function and styling and are selling them at prices below comparable European products. In contrast to the United States where the Japanese price their vehicles above the market, in Europe the Japanese have used a penetration pricing policy.
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From page 48... ...
(Adapted from The almost complete diffusion of the innovations in Figure 3.1 suggests that any competitive advantage accruing to the innovator was shortlived; what was initially a unique feature available on a limited basis became widespread, even standard equipment on all cars. Where competitors are at similar stages of development, and where development has proceeded through a particular sequence of dominant designs, technology becomes competitively less significant.
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From page 49... ...
A sweeping shift to totally new design concepts requires an entrepreneurial thrust both in its technical development and in its commercial application. In contrast, an organization with a dominant orientation toward mass production of a mature product, economies of scale, and incremental innovation must place far greater emphasis on cost control and coordination.
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From page 50... ...
4. For a discussion of the concept of "dominant design," see Abernathy (1978)
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