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How the Incumbent Can Win: Managing Technological Transitions in the Semiconductor Industry

  • Marco Iansiti

    ()

    (Harvard Business School, Soldiers Field, Boston, Massachusetts 02163)

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    The paper reports on an empirical study of the management of technological transitions. It focuses on project-level mechanisms for the generation of knowledge through experimentation and for its accumulation through individual experience. It proposes a model that links these mechanisms to effectiveness in the management of revolutionary and evolutionary development approaches. This argument is tested with data describing projects conducted by all major competitors in the semiconductor industry. Each project was aimed at a technological transition, defined as the introduction of a major new generation of process technology. The analysis shows substantial differences among competitors in the approach taken (i.e., evolutionary vs. revolutionary) and results achieved. Additionally, it shows that individual organizations can migrate, over time, from evolution to revolution and vice versa. The analysis further indicates that accumulating experience and generating knowledge through experimentation are significantly associated with project performance. While product performance improvement through revolution is associated with research experience and with parallel experimentation capacity, improvement through evolution is associated with project experience and minimum experimental iteration time.

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    File URL: http://dx.doi.org/10.1287/mnsc.46.2.169.11922
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    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 46 (2000)
    Issue (Month): 2 (February)
    Pages: 169-185

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    Handle: RePEc:inm:ormnsc:v:46:y:2000:i:2:p:169-185
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    1. Iansiti, Marco & Khanna, Tarun, 1995. "Technological Evolution, System Architecture and the Obsolescence of Firm Capabilities," Industrial and Corporate Change, Oxford University Press, vol. 4(2), pages 333-61.
    2. Clark, Kim B., 1985. "The interaction of design hierarchies and market concepts in technological evolution," Research Policy, Elsevier, vol. 14(5), pages 235-251, October.
    3. Leonard-Barton, Dorothy, 1988. "Implementation as mutual adaptation of technology and organization," Research Policy, Elsevier, vol. 17(5), pages 251-267, October.
    4. Henderson, Rebecca., 1994. "The evolution of integrative capability : innovation in cardiovascular drug discovery," Working papers 3711-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    5. Robert D. Dewar & Jane E. Dutton, 1986. "The Adoption of Radical and Incremental Innovations: An Empirical Analysis," Management Science, INFORMS, vol. 32(11), pages 1422-1433, November.
    6. von Hippel, Eric, 1990. "Task partitioning: An innovation process variable," Research Policy, Elsevier, vol. 19(5), pages 407-418, October.
    7. Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, vol. 68(2), pages 1-16, May.
    8. Thomke, Stefan & von Hippel, Eric & Franke, Roland, 1998. "Modes of experimentation: an innovation process--and competitive--variable," Research Policy, Elsevier, vol. 27(3), pages 315-332, July.
    9. Paul S. Adler & Kim B. Clark, 1991. "Behind the Learning Curve: A Sketch of the Learning Process," Management Science, INFORMS, vol. 37(3), pages 267-281, March.
    10. Stefan H. Thomke, 1998. "Managing Experimentation in the Design of New Products," Management Science, INFORMS, vol. 44(6), pages 743-762, June.
    11. 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.
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