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Market Incumbency and Technological Inertia

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  • Pankaj Ghemawat

    (Harvard Business School)

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    Abstract

    This paper uses a case study and a simple mathematical model to study the link between the incumbency and incentives to innovate and introduce drastically new products. It identifies the conditions under which fears of self-cannibalization are particularly likely to lead incumbents to soft-pedal such innovations.

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    File URL: http://dx.doi.org/10.1287/mksc.10.2.161
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    Bibliographic Info

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 10 (1991)
    Issue (Month): 2 ()
    Pages: 161-171

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    Handle: RePEc:inm:ormksc:v:10:y:1991:i:2:p:161-171

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    Related research

    Keywords: new products; competitive strategy;

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    Cited by:
    1. Chang, Dae Ryun & Cho, Hang, 2008. "Organizational memory influences new product success," Journal of Business Research, Elsevier, vol. 61(1), pages 13-23, January.
    2. Hao Zhao, 2003. "R&D Competition Between an Incumbent and an Entrant: An Integrated Model of R&D Investment, Performance Improvement, and Time-to-Market," Review of Marketing Science Working Papers 2-2-1023, Berkeley Electronic Press.
    3. Evens Salies, 2011. "Product innovation when consumers have switching costs," Documents de Travail de l'OFCE 2011-07, Observatoire Francais des Conjonctures Economiques (OFCE).
    4. De Bondt, Raymond, 1997. "Spillovers and innovative activities," International Journal of Industrial Organization, Elsevier, vol. 15(1), pages 1-28, February.
    5. Bruno Cassiman & Masako Ueda, 2006. "Optimal Project Rejection and New Firm Start-ups," Management Science, INFORMS, vol. 52(2), pages 262-275, February.
    6. Martin, Xavier & Mitchell, Will, 1998. "The influence of local search and performance heuristics on new design introduction in a new product market," Research Policy, Elsevier, vol. 26(7-8), pages 753-771, April.
    7. Hernán Herrera Echeverry, 2008. "Innovación e incumbent failure: Una ilustración usando la industria de las telecomunicaciones en Colombia," DOCUMENTOS DE TRABAJO CIEF 011811, UNIVERSIDAD EAFIT.
    8. repec:spo:wpecon:info:hdl:2441/5l6uh8ogmqildh09h56210pa6 is not listed on IDEAS
    9. Grove, Nico & Baumann, Oliver, 2011. "Bitpipe vs. service: Why do pure service providers outperform fully integrated operators?," 8th Asia-Pacific Regional ITS Conference, Taipei 2011: Convergence in the Digital Age 52308, International Telecommunications Society (ITS).
    10. Andrea Fosfuri & Marco S. Giarratana & Alessandra Luzzi, 2005. "Firm Assets and Investments in Open Source Software Products," DRUID Working Papers 05-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    11. D. Sudharshan & Ben Shaw-Ching Liu & Brian T. Ratchford, 2006. "Optimal response to a next generation new product introduction: to imitate or to leapfrog?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 41-62.

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