Eluvation Of Dominant Design On The Firms' Competitve Adavantage In Network Industry

Network industry has many differences to other industries, and the most obvious characteristic is its Network Effects. The existence of Network Effect makes Dominant Design the most important competitive area. Ignoring the relationship between Dominant Design and competency, scholars focus on the relationship between core competency and technology innovation. Our paper mainly focuses on the role of Dominant Design in this process.Firstly, we analyze the motivation of Dominant Design evolution. The conclusion is that the company can survive only when it reaches critical scale in Dominant Effect. And consumer's expectation is critically important in the process. Dominant Design drives and accelerates the standardization of an industry. Standardization brings scale effect, eases consumers'doubt, and makes the consumer get more delivered value. So Dominant Design affects the consumers'expectations from two aspects. First, it can benefit both parties so as to consumers'expectations. Second, it affects the market structure so as to the consumers'expectations.The establishment of Dominant Design means company finds and masters industries technical specifications, which can lower the costs and fast the innovation. Dominant Design is represented by patent. In patent system, innovation of other companies may refer to infringement act. Dominant company makes the most profit from two ways: Dominant Design standard locks up consumers and indirect Network Externalities have influences to Supplementary product supplier. Once the Dominant Design becomes a industry's, adding on the patent protective system, a company establishes its Barriers of entry. First, it can innovate with a low cost; second, it can maintain its own technology. The establishment of Dominant Design means the establishment of entry barrier, which can enforce its ability to resist risk and achieve excess profit and lock the consumers. The evolution of Dominant Design is way of forming a company's Heterogeneity and getting its persistent core competency.Then we make a principal component analysis to the factors which influence competency of Network enterprise with positive analysis. And we get the conclusion that the factors which directly affect the technology innovation will play a critical role. We choose 30 samples in 2006 Top 100 Electronic and Information Enterprises to do our research. Through calculation, we get the Component Score Coefficient, then the Component Score Function, and then get the component score, after that we can inquire about the characteristics of each sample. The acquirements can test our hypothesis of sum of patent and R&D-input ratio, then it proves that technology innovation play an important role in Network enterprises. After that, we make a more effective model to evaluate enterprises'competency with main factor analysis, and fuzzy mathematics theory which can avoid the artificial factor and extreme indicator to influence the result.At last, we suggest that technical advancement and technical advancement management are the guarantee of persistence competency and conversion of economic growth mode. As a critical tactic task in economic growth, how to build a more effective technical advancement method is our urgent affaires. Technical advancement refers to that an enterprise get a new technology through introducing technology and R&D and apply it into daily production which lead to product innovation and technology innovation, and at last it increase a enterprise's profit. We mainly focus on management to knowledge employee, establishment of technology innovation Network between enterprises and effective technology transformation.