TECHNOLOGICAL CHANGE WITHIN HIERARCHIES: THE CASE OF THE MUSIC INDUSTRY

Abstract

This article uses the music industry to demonstrate a model of technological change that explains the sources and timing of technological discontinuities and dominant designs. The process by which firms translate customer needs into products can be represented in terms of an interaction between customer choice and product design hierarchies. Technological improvements at lower levels in the product design hierarchy can change the design tradeoffs and thus affect movements up and down the hierarchies. Movements up the hierarchies lead to the emergence of new product classes (i.e., technological discontinuity) whereas movements down the hierarchies may result in the emergence of a dominant design in a specific product class.

Keywords:

• Technological discontinuities
• Dominant designs
• Hierarchies
• Products
• Customers
• Music industry

Notes

¹A similar argument can be made for the emergence of a dominant design for reel-to reel tape.

²Personal communication, Moon Suh Park, Vice President, Qualcomm, October 20, 2004.