When are technological advantages bad for an organisation?

The Answer: When everyone else in their industry has adopted them ..

The Axion: Using The Technology Adoption Lifecycle terminology, the Early Adopters and Innovators are those to benefit greatest from new technologies. They benefit from what is referred to as first-movers' advantage. The quicker the adoption the greater the benefits.

Early adoption to a new technology will initially increase profit margins. As adoption moves across the curve to the Late Majority
- Competition on the same level brought on by the new technology increases
- Unique Value diminishes
- Profits Erode

The Irony: By introducing a new technology advance it is initially the adopting producers which benefits, but over time as competitors in the industry also increase adoption the ultimate benificiaries are the consumers.

The Examples:
Bovine Hormones
US cow farmers quick to adopt bovine hormone to increase milk production benefitted from 20% greater yields at the same cost.
Overtime their competitors adopted the same bovine hormone - often for cheaper as increased sales volumes & recouped R&D costs reduces the extent of margin required - and competition drove prices steadily downward.

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The first companies to adopted benefited from faster communication, higher productivity and reduced communication costs.
As subsequent companies adopted this technology their first-movers' advantage was nullified.
The outcome was that all companies simply had to operate at a greater pace for essentially the same profit margin.

When adoption reaches saturation, competitive advantage is neutralised for all as it becomes the new default, the de-facto standard expected by consumers.