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Old technology responses to new technology threats: demand heterogeneity and technology retreats

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  • Ron Adner
  • Daniel Snow
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    Abstract

    We explore the implications of a real and common alternative to attempting the transformation required to embrace a new, dominant, technology--the choice to maintain focus on the old technology. In considering this choice, we distinguish between "racing" strategies, which attempt to fight off the rise of the new technology by extending the performance of the old technology, and "retreat" strategies, which attempt to accommodate the rise of the new technology by repositioning the old technology in the demand environment. Underlying our arguments is the observation that the emergence of a new technology does more than just create a substitute threat--it can also reveal significant underlying heterogeneity in the old technology's broader demand environment. This heterogeneity is a source of opportunities that can support a new position for the old technology, in either the current market or a new one. Using this lens, we explore the decision to stay with the old technology as a rational, proactive choice rather than as a mark of managerial and organizational failure. We then consider the distinctive challenges and organizational dynamics that arise in technology retreats, and their implications for the ways in which managers and scholars should approach questions regarding the management of capabilities, lifecycles, and ecosystems. Copyright 2010 The Author 2010. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

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    Bibliographic Info

    Article provided by Oxford University Press in its journal Industrial and Corporate Change.

    Volume (Year): 19 (2010)
    Issue (Month): 5 (October)
    Pages: 1655-1675

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    Handle: RePEc:oup:indcch:v:19:y:2010:i:5:p:1655-1675

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    Cited by:
    1. JP Eggers & Michal Grajek & Tobias Kretschmer, 2011. "Performance implications of core and complementary pre-entry experience: The role of consumer heterogeneity in mobile telephony," ESMT Research Working Papers ESMT-11-03 (R2), ESMT European School of Management and Technology, revised 29 May 2012.
    2. Ma, Daw & Chang, Chia-Chin & Hung, Shiu-Wan, 2013. "The selection of technology for late-starters: A case study of the energy-smart photovoltaic industry," Economic Modelling, Elsevier, vol. 35(C), pages 10-20.

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