Differentiation Via Technology: Strategic Positioning of Services Following the Introduction of Disruptive Technology

Abstract

Introducing a “disruptive” technology into an existing service market provides new opportunities for firms and customers, often altering the nature of the market. Consequently, new technology often destabilizes market equilibrium, forcing firms to consider the role new technology will play in determining the new market structure. In this paper, we focus on understanding how significant new technology forces firms to evaluate and renegotiate their market positions in a service industry newly infused with technology (i.e., brokerage market). Specifically, we examine how firms integrate technology into the service process to create new forms of interaction. We used content analysis and a combination of structuralist methods including multidimensional scaling analysis (MDS), clustering methods, and property-fitting regression techniques (ProFit) to examine how technology changes the service process, and how firms leverage these changes for positioning. Our research demonstrates a strategic approach to positioning that suggests (1) introducing significant technology opens new positioning avenues by providing new service interactions, (2) technology must be leveraged via links to customer value sets, and (3) firms that leverage technology through customer values outperform their competitors.