Betamax: Proprietary management and expansion

Thèmes abordés

Betamax, innovation, diffusion, propietary regime

Résumé du document

In the last few decades, with the development of technology, different technological standards have been created. Consumers have to choose between two or more standards for one product. Development of Betamax was perhaps the most significant innovation in entertainment. It changed the way people watch television and created a new industry.

This paper will try to analyze the evolution of Betamax and its expansion. The evolution of the innovations will be discussed as well as its proprietary management, and how such a management has affected its expansion.

Extraits

[...] Technological pioneering and competitive advantage: the birth of the VCR industry. California Management Review, Volume XXIX, p.51-76. Swann, G., Peter, M. (2009). Economics of innovation: an introduction. [...]

[...] Closed proprietary regime can create monopolies around an innovation but they provide the assurance that companies will be able to capture the economic value of their research investments (Swann, 2009). Sony's Betamax, illustrates the critical role which the diffusion of innovation process plays in successful high tech product offerings. In each case, the companies rushed their products to market and failed to combine a customer focus with an understanding of the diffusion process. Betamax was a proprietary technology and Sony believed they could do it alone. They wanted to recoup their investment in development of the new product through high margins. Sony developed a closed proprietary regime. [...]

[...] After studying the Betamax's evolution process, how the proprietary regime affected its diffusion? proprietary regime and diffusion The Business Dictionary defines proprietary technologies as technologies where there are strengthened restrictions preventing others from copying or changing the technology. Bedwell (2009) explains in her work that when a technology is chosen as a standard, the restrictions imply that most innovations will come from the original owner. It becomes a standard when the technology is widely used. The current use of a proprietary technology can result in network effects, causing a high market demand. [...]

[...] The selection of Proprietary Technologies as standards may create significant market power, generate returns in excess of those needed to remunerate innovation, distort competition and restrict the dissemination of new and superior technologies. Available from: http://www.essex.ac.uk/economics/eesj/sp08/EC261TPVBedwell.pdf [Accessed 15 March 2011] Browne, C., Johnson, D. (2000). VCR Development: Diffusion and Impact Available from: http://www.smecc.org/video/vcr_development_diffusion_impact.pdf [Accessed 3 March 2011] Coplan, J. (2006). Diagnosing the DVD Disappointment:A Life Cycle View. Glucksman Institute for Research in Securities Markets. Available from: http://w4.stern.nyu.edu/glucksman/docs/Coplan.pdf [Accessed 7 March 2011] Lyons, N. (1976). The Sony Vision. New York: Crown Publishers, Inc. Pollock, R. (2008). [...]

[...] This paper will try to analyze the evolution of the Betamax standard and its diffusion. The evolution of the innovation will be discussed as well as its proprietary regime and how such regime affected its diffusion. Evolution of the betamax To begin, Sony is one of the world's largest media conglomerates. Based in Tokyo, Sony is one of the leading manufacturers of electronics, video and communications as well as video game consoles and information technology products for the consumer and professional market (Lyon, 1976). [...]