This paper is a review of the role of innovation as substitution threat. The interesting strategy for those facing what in retrospect proves to be full substitution is the strategy of ‘switch’ to the substituting technology. The context-dependent uncertainty involved in the switch decision is examined in three detailed cases; the nineteenth century alkali industry in England, IBM’s move into computer technology and the 1950s electronic valve manufacturers’ move into semiconductor transistors. The case material is used to introduce the problem competition policy has when faced with competition derived from innovation.
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Paper provided by Aarhus School of Business, Department of Management in its series Working Papers with number
2003-2.
Length: 42 pages Date of creation: 01 Nov 2003 Date of revision: Handle: RePEc:hhb:aardom:2003_002
Note: Published after thorough revision with wp no. 2000-1 as: The Response of Old Technology Incumbents to Technological Competition - does the Sailing Ship Effect Exist? Journal of Management Studies, 39, 7, 887-907, 2002 Contact details of provider: Postal: The Aarhus School of Business, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark Phone: +45 89 48 66 88 Fax: + 45 86 15 01 88 Web page: http://www.asb.dk/about/departments/man.aspx More information through EDIRC
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