Niche producer HTSFs &

The new product-based

HTSF
BY: GROUP 3
 Niche
Producer
HTSFs
 Niche producer HTSFs
• Niche production is another type of HTSF activity that is,
again, less. glamorous than many large-scale HTSF activities.
• This niche type of production has many advantages, not
least of which is an absence of the problems experienced by
HTSF executives who seek to exploit a new product that has
high mass-market potential.
•A major problem for any new HTSF seeking to exploit a novel
product technology with mass-market potential is, ironically
• Strong growth potential is also a problem, since the road
from invention to exploitation for such a firm is paved with
many potential pitfalls, mainly associated with protecting
the intellectual property involved.
• • The very high potential that the new technology possesses
will ensure that large international firms will seek to gain
access to this new knowledge.
• • 'Reverse engineering' its new product to produce an (often
improved) patent-infringing copy.
• There are a number of high technology markets where the scope for mass
production does not exist. - Because the size of the total market is small (e.g.
specialist measuring instruments; laboratory equipment; specialist high-
performance electronic components) - Or because the type of products produced
are bespoke in that the specification for the product will vary with each individual
customer (c.g. control equipment for industrial production systems or small power
stations).
• Small and Medium Firms - Small and medium-sized firms in these types of
activities can achieve profitability that offers a good return for the management
and workers of an HTSF, such returns would not be great enough to interest.
- A much larger firm. Thus, due to the lack of a threat from larger firms in high-
technology sectors and the relatively small size of the market predatory activity by
large firms in this sub-sector is rare.
 The new
Product-based
HTSF
 The new product-based HTSF
• The third type of firm, based on a new product with high or
very high growth potential is the kind of HTSF most
commonly recognized by the public as archetypal.
• Not all HTFS grow from garage- based business to
multinational enterprises
• Example of a successful HTFs is Microsoft which started in
a garage in new Mexico by bill gates and his friends
• Many Firms produced a new product with strong growth
potential for opt for “grow to sell” approach to their
business strategy and in these cases the problems of
survival and growth are reduced by an acceptance at the
outset that the firm will be sold at a predicted point in the
business plan.
• However in practice the reality is that whatever strategy
the firms adopts in birth it may be modified to suit
changing conditions in the firm develops the product that
was its raison d'etre .
• For example a firm that was founded on a “grow to sell” basis might not
be sold on the predetermined time remaining independent thought
buying out its investors while a firm that was founded on strongly
independent principles if it is cause by its reluctance to disturb lucrative
mainframe market this new firm was able to exploit a window of
opportunity that was open for six year between 1972 to 1978 , and
launch its new desktop computer before IBM realize that the mainframe
computer market was under threat by the time IBM recognized the
threat It was too late and Apple Computer Inc. Was way on becoming
number one.
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