Using Outdated Technology to Conquer a Market

A redesigned, updated product is usually created to replace an older model. By definition the updated product is a better version of the model it replaces. This was definitely the case when the Chrysler Corporation launched the Jeep Grand Cherokee in 1992. The Grand Cherokee was supposed to replace the original Cherokee, as it was bigger, better, more powerful, and more technologically advanced. What Chrysler did at the time, though, is interesting. Instead of abandoning the original Jeep Cherokee, it continued to offer it alongside the new, updated Jeep Grand Cherokee. The Jeep Cherokee was now offered as a more affordable option for those who didn’t want to spring for the new version. The result was that with limited updates and investment, Chrysler was able to expand its product line by catering to two very different customer groups, all by continuing to offer what other manufacturers may consider an out-of-date model.

A similar dynamic was encountered when we launched Lakeshore Express. In the last decade or two, turboprop aircraft have been largely abandoned by the airlines as they instead favor newer regional jets. They were older models that didn’t work with the hub and spoke system of the major carriers. As a result, the older turboprops were in less demand, despite the fact that they offered similar operating performance and much better fuel efficiency. This created an opportunity for smaller operators who couldn’t afford the regional jets, but weren’t deterred by the seemingly out-of-date nature of the turboprops. These carriers, including Lakeshore Express, could enter the market with fleet costs that were a fraction of the cost as compared to those focused on regional and narrow-body jets.

The use of legacy technology can present an opportunity for firms looking to create a niche in the market. In the case of the Jeep Cherokee, it allowed the firm to both go upstream, by offering the redesigned Grand Cherokee, and at the same time broaden its market downstream by continuing to offer the Cherokee.

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