Incumbent performance in the face of a radical innovation: Towards a framework for incumbent challenger dynamics
AbstractWhen radical innovations impact an industry, established incumbents are sometimes displaced by new challengers, yet at other times, survive and prosper. What are the factors that influence these possible outcomes? Extensive as the studies are in providing insights into incumbent-challenger dynamics (ICD), the fragmented nature of the literature and the isolated treatment of various constructs at a particular level of analysis, merit a review and analysis. We (1) identify, collate and analyse several constructs from three categories; the industry, the firm and the challenge, (2) discuss the interactions among these constructs and (3) show that incumbent failure or success can be better understood when these constructs are concurrently analysed. We derive several propositions for stimulating research and develop a holistic multi-level framework for understanding incumbent-challenger dynamics. We pull together strategic management theories at the industry level with those at the organizational and inter-organizational levels in the context of disruptive innovations. We contribute by bringing in the challenge dimension across these levels to inform whether an innovation is disruptive in its effects, not just ex post but also ex ante. For illustrative purposes and to concretize our arguments, we draw on both primary data from the Dutch television industry and archival data from four episodes of disruptive innovations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Research Policy.
Volume (Year): 41 (2012)
Issue (Month): 8 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/respol
Incumbents; Radical and disruptive innovations; Challengers; New entrants; Technology; Industry; Markets; Value networks; Complementary capabilities;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
- Abernathy, William J. & Clark, Kim B., 1985. "Innovation: Mapping the winds of creative destruction," Research Policy, Elsevier, vol. 14(1), pages 3-22, February.
- Sull, Donald N & Tedlow, Richard S & Rosenbloom, Richard S, 1997. "Managerial Commitments and Technological Change in the US Tire Industry," Industrial and Corporate Change, Oxford University Press, vol. 6(2), pages 461-501, March.
- Chesbrough, Henry W, 1999. "The Organizational Impact of Technological Change: A Comparative Theory of National Institutional Factors," Industrial and Corporate Change, Oxford University Press, vol. 8(3), pages 447-85, September.
- Burgelman, Robert A. & Grove, Andrew S., 2007. "Cross-Boundary Disruptors: Powerful Inter-Industry Entrepreneurial Change Agents," Research Papers 1978, Stanford University, Graduate School of Business.
- Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
- Garud, Raghu & Karnoe, Peter, 2003. "Bricolage versus breakthrough: distributed and embedded agency in technology entrepreneurship," Research Policy, Elsevier, vol. 32(2), pages 277-300, February.
- Caves, R E & Porter, M E, 1977. "From Entry Barriers to Mobility Barriers: Conjectural Decisions and Contrived Deterrence to New Competition," The Quarterly Journal of Economics, MIT Press, vol. 91(2), pages 241-61, May.
- P. Murmann & K. Frenken, 2002.
"Toward a Systematic Framework for Research on Dominant Designs, Technological Innovations, and Industrial Change,"
Papers on Economics and Evolution
2002-12, Max Planck Institute of Economics, Evolutionary Economics Group.
- Murmann, Johann Peter & Frenken, Koen, 2006. "Toward a systematic framework for research on dominant designs, technological innovations, and industrial change," Research Policy, Elsevier, vol. 35(7), pages 925-952, September.
- Constance E. Helfat & Marvin B. Lieberman, 2002. "The birth of capabilities: market entry and the importance of pre-history," Industrial and Corporate Change, Oxford University Press, vol. 11(4), pages 725-760, August.
- Rochet, Jean-Charles & Tirole, Jean, 2003.
"Platform Competition in Two-Sided Markets,"
IDEI Working Papers
152, Institut d'Économie Industrielle (IDEI), Toulouse.
- Garud, Raghu & Munir, Kamal, 2008. "From transaction to transformation costs: The case of Polaroid's SX-70 camera," Research Policy, Elsevier, vol. 37(4), pages 690-705, May.
- Teece, David J., 1986.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply," Management Science, INFORMS, vol. 35(12), pages 1514-1514, December.
- Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, December.
- Christensen, Clayton M. & Rosenbloom, Richard S., 1995. "Explaining the attacker's advantage: Technological paradigms, organizational dynamics, and the value network," Research Policy, Elsevier, vol. 24(2), pages 233-257, March.
- Henry Chesbrough, 1999. "Arrested development: the experience of European hard disk drive firms in comparison with US and Japanese firms," Journal of Evolutionary Economics, Springer, vol. 9(3), pages 287-329.
- Shahzad Ansari & Kamal Munir, 2008. "How valuable is a piece of the spectrum? Determination of value in external resource acquisition," Industrial and Corporate Change, Oxford University Press, vol. 17(2), pages 301-333, April.
- Mary Tripsas, 2008. "Customer preference discontinuities: a trigger for radical technological change," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 79-97.
- Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
- Glasmeier, Amy, 1991. "Technological discontinuities and flexible production networks: The case of Switzerland and the world watch industry," Research Policy, Elsevier, vol. 20(5), pages 469-485, October.
- Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 171-195, Summer.
- Joel A. C. Baum & Paul Ingram, 1998. "Survival-Enhancing Learning in the Manhattan Hotel Industry, 1898--1980," Management Science, INFORMS, vol. 44(7), pages 996-1016, July.
- Carliss Y. Baldwin, 2008. "Where do transactions come from? Modularity, transactions, and the boundaries of firms," Industrial and Corporate Change, Oxford University Press, vol. 17(1), pages 155-195, February.
- Ansari, Shahzad & Garud, Raghu, 2009. "Inter-generational transitions in socio-technical systems: The case of mobile communications," Research Policy, Elsevier, vol. 38(2), pages 382-392, March.
- Henry Chesbrough & Richard S. Rosenbloom, 2002. "The role of the business model in capturing value from innovation: evidence from Xerox Corporation's technology spin-off companies," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 529-555, June.
- Jacobides, Michael G. & Knudsen, Thorbjorn & Augier, Mie, 2006. "Benefiting from innovation: Value creation, value appropriation and the role of industry architectures," Research Policy, Elsevier, vol. 35(8), pages 1200-1221, October.
- Linda Argote & Sara L. Beckman & Dennis Epple, 1990. "The Persistence and Transfer of Learning in Industrial Settings," Management Science, INFORMS, vol. 36(2), pages 140-154, February.
- Cooper, Arnold C. & Schendel, Dan, 1976. "Strategic responses to technological threats," Business Horizons, Elsevier, vol. 19(1), pages 61-69, February.
- Sharon Novak & Scott Stern, 2008. "How Does Outsourcing Affect Performance Dynamics? Evidence from the Automobile Industry," Management Science, INFORMS, vol. 54(12), pages 1963-1979, December.
- Andrew A. King & Christopher L. Tucci, 2002. "Incumbent Entry into New Market Niches: The Role of Experience and Managerial Choice in the Creation of Dynamic Capabilities," Management Science, INFORMS, vol. 48(2), pages 171-186, February.
- Bohnsack, René & Pinkse, Jonatan & Kolk, Ans, 2014.
"Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles,"
Elsevier, vol. 43(2), pages 284-300.
- René Bohnsack & Jonatan Pinkse & Ans Kolk, 2014. "Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles," Grenoble Ecole de Management (Post-Print) hal-00936886, HAL.
- Bergek, Anna & Berggren, Christian & Magnusson, Thomas & Hobday, Michael, 2013. "Technological discontinuities and the challenge for incumbent firms: Destruction, disruption or creative accumulation?," Research Policy, Elsevier, vol. 42(6), pages 1210-1224.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.