Impact of Technology Commoditization on Cost Efficiency PPT

This PPT slide, part of the 25-slide Technology Commoditization PowerPoint presentation, presents an analysis of how technology commoditization impacts overall costs, particularly focusing on value-added costs. It references the foundational work of Bruce Henderson from the Boston Consulting Group, who introduced the Unit Cost model and the Experience Curve concept. This model illustrates the relationship between production experience and efficiency, suggesting that as production volume increases, costs decrease proportionally.

The Experience Curve effect is a key focus here. It highlights that with increased production, organizations can achieve greater efficiency, which leads to reduced costs. The slide emphasizes the cyclical nature of this effect: as demand increases, there is more deployment of resources, which in turn drives prices down. This cycle can create a competitive environment in new markets, allowing firms to capture greater market share.

The implications of this effect are significant. It suggests that businesses can leverage the efficiencies gained from increased production to enhance their market position over time. The slide also hints at specific industries where technology commoditization is particularly relevant, such as semiconductors, LEDs, and gene sequencing.

Overall, the content encourages executives to consider how embracing technology commoditization can lead to cost reductions and improved market positioning. The insights provided can serve as a strategic guide for decision-making, especially for organizations looking to optimize their operations and expand their market presence.

This slide is part of the Technology Commoditization PowerPoint presentation.

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