ECTON INC. ANALYSI
Ecton Inc, an innovator medical imaging firm, is caught in a similar situation that many
startup companies face once they are in the final stages of a product development cycle.
They must choose between continuing with product rollout, which necessitates substantial
capital input to increase the scale of operations, or becoming acquired by a larger
organization which already has the resources and competence to ensure production, sales,
and distribution for the same product. This report focuses on Ecton’s current market
position, examines its future choices, and offers a recommendation in light of the prior
analysis.
Ecton’s Position: In order to understand Ecton’s current position in the ultrasound
imaging marketplace, the terms “disruptive technology” and “sustaining technology,”
created by Clayton M. Christensen, must be reviewed. As known, what these terms mean,
Christensen further defined disruptive technologies into two sub-groupings: low-end
disruptive and new-market disruptive. Target market is the major difference between the
two categories. Low-end disruptive technology tries to target lower end customers with a
lower-cost proposition, while the new-market disruptive try to compete in novel markets
which may create new consumer values altogether.
Thus, to correctly position Ecton, one must analyze the performance trajectory of
conventional technologies in the ultrasound image market for cardiology. Typically, the
average customers of the ultrasound cardiology imaging market are cardiologists who need
quantitative information (such as velocity accuracy) and the best image quality possible.
Established ultrasound imaging companies, such as HP and Acuson, were constantly
pursuing existing technology along these guidelines to meet clinical demands. However,
Ecton did not beat the leaders at their own game. Instead, Ecton developed a Doppler
echocardiography instrument that is compact and user friendly. It has the advantage of
being mobile and half the price of existing low end products, which is quite a reduction.
Although Ecton’s echo machine can deliver high quality image as the conventional
machine, it offered fewer features and less versatility. With its new machine, Ecton targets
the low end market segment and hopes to sell its machines in markets outside traditional
cardiology unit, such as professionals in the ICU, outpatient clinics, and developing
countries which can be considered niche market since they cannot afford conventional
echo machines.
Therefore, after considering the aforementioned, Ecton’s new technology is best described
as “disruptive technology.” Ecton introduces a very different product from what the
average customer valued by positioning itself outside the average customer’s needs while
offering a superior price.
Ecton’s Choice: In light of the above analysis, the current issue Ecton faces is to choose
