Feb 9, 2021 in Case Study Examples

Grabber Holder Dynamics: a Tool for Diffusion of Innovation

The Grabber-Holder dynamics framework is derived from eastern philosophy based on Taoism and Confucius, and western economic theory based on rationality. The framework provides a model on how one can create a new market and how to induce external agents who are engaged in other economic activities to allocate their resources to participate in promoting the new market vision. A grabber vision would not only grab customers, it would also grab entrepreneurs to participate in providing products or services to make the vision a reality.

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These customers and entrepreneurs are economic agents acted based on the excitement and emotional desire to engage in promoting the vision, rather than based on rational cost benefit analysis. However, whether these people will continue to promote the grabber vision depends on whether the exciting grabber vision can induce the development of necessary supporting elements that would enable the customers and entrepreneurs to derive tangible benefit from continue promoting the grabber vision.

We take the case of IBM when it was a fledgling company and it then developed the punching machine which facilitated the manual counting of wages which was not only time consuming but error ridden. It is the grabber vision to see the possibility of replacing technology that was going to become popular in business applications. Though, the concept of Holder vision is equally important as their will be many followers in the market. IBM too had many competitors but it hung onto as the leader in the market by a long margin due to its consolidated sales campaign.

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The important thing is to not only introduce a novel technology that grabs the attention of buyers, but also to hold onto them even when competitors enter the market with technically superior products. In this Holder vision, IBM was far ahead than any of its competitors and therefore they succeeded in generating the highest revenues for long period of time.

IBMs downfall started in the mid 70s, when the minicomputer was introduced into the market. IBM failed to recognize the potential of this new market and therefore, lost out to its competitors thinking that the mainframe computer was still a better computer having many more applications. IBM finally did introduce the RS/6000 which was technically a faster and more reliable minicomputer than most of its clones in the market but the timing was too late.

An interesting case happened in China. In early 2000, when dot com started to crash, many Chinese e-portals were in trouble. They started at the dot com boom and developed expertise in creating grabber that attracted people to the web. In November 2000, China Mobile had attracted a large user group of SMS (Small Message Systems) users by charging 0.10 RMB (about $0.012) per SMS to sender only. It had also built up an infrastructure to support mass distribution of SMS and so it desired to increase the SMS volume quickly. They wanted to expand fast, but they lacked technical expertise which they gained from an outside service provider.

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Observing the tremendous success many other service providers also wanted to latch on to China Mobile and such companies. Therefore, we see that China Mobile resurrected the e-portals by grabbing the attention of the customer through a novel idea and not through technical expertise. Thus, it is highly important to analyze the market and play with the emotions of the customers to grab their attention first and then back it up with solid salesmanship. It is the Grabber holder paradigm which when used in introducing a product in a market can be very successful in making the company a leader in the market.

IBMs history shows that they have a stubborn attitude when following others and realizing the potential of a new released technology. It happened in the early 50s when all major computer companies switched to magnetic media as the primary storage device but IBM was late to change its storage devices form punching media to magnetic media. In the late 60s again the minicomputer was introduced but IBM did not consider it as a serious application, and stuck to mainframe computers, which was gain a mistake. Therefore, the future of IBM depends on not only its technical expertise which is far superior to its competitors but also how it can follow the new trends in the market and quickly adapts itself to them.

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