Question

A single product or process architecture that dominates a product category usually 50% or more of the market. A dominant design is a de facto standard, meaning that while it may be officially enforced or acknowledged, it has become a standard for the industry. Are dominant designs beneficial for competitors, consumers, complementors, and suppliers?

Answer 1

Dominant design refers to a technological concept wherein a feature is introduced which becomes a standard which has to be adhered to in order to stay in the market since it is what is progressive and offering features that were earlier not present. These features sometimes may not be pathbreaking, but they incorporate points that are immediately accepted by the customer/consumers and are offering a world of difference.

A modern day smartphone is a very good example of this design model. Around 2005 the phones that were rolled out had different designs and varied shapes and sizes, some were flip phones, some had a physical pullout keyboard, and so on. However, now when we see the phones they are almost identical, only distinguished from the company logo/size of screen. This is an example wherein the adoption of the new design had to be made a standard in order to stay competent in the market or else many companies that didnt adopt these timely were impacted badly, like BlackBerry for example. This hence becomes a de facto standard almost like a norm to adhere to in the indusstry if a company wishes to survive in the competitive markets that we have today.

Dominant Design benefits:

1. For Competitors:

For the competitors that are not owning the dominnant design technology, they will be heavily impacted since now they are required to forgo the investments that they had done for the project they were working on and will have to catch up to the new technology introduced by the other copany which is turning out to be the de facto standard. However if your company is the one who rolled out the breakthrough feature/product then definitely it is an advantage for your company over others as you get a head start into this domain while others still adapt to it.

2. For Consumers:

Yes, this is highly beneficial for a consumer if the benefits that they receive from the new technoloogy that is now widespread and being adopted by more and more people are more compared to the costs that are associated with the product. Monopolized markets can involve higher prices, lesser variety etc. In case the consumers are getting benefited and the costs to those benefits are marginal it is beneficial for them, however if the benifts received are significantly smaller compared the costs associated then the consumers will not be benefited .

3. For Complementors and Suppliers:

The dominant design being rolled out will reduce the market uncertaininty that is usually faced in terms of products when it is know that only one kind of product will be present, hence their cost for being required to support or supply multiple technologies also will reduce over time. Complementors would require support from owner of the technology to be able to benefit better from the change. Moreover, they will get to save on their resources which are involved and supporting other technologies which might no longer be surviving very well, hence attuning their focus on only one. On the other hand, their power as suppliers and their pricing powers might get impacted if there is a single dominant design available unless they themselves are a monopoly.

Please do give a thumbs up if the answer is satisfactory! In case of any clarifications you can drop a comment and we can try to get back to you as soon as possible.