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Competition Derived From Innovation As A Substitution Threat

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  • Howells, John

    () (Department of Organisation and Management, Aarhus School of Business)

Abstract

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.

Suggested Citation

  • Howells, John, 2003. "Competition Derived From Innovation As A Substitution Threat," Working Papers 2003-2, University of Aarhus, Aarhus School of Business, Department of Management.
  • 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
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    1. John Howells, 2002. "The Response of Old Technology Incumbents to Technological Competition - Does the Sailing Ship Effect Exist?," Journal of Management Studies, Wiley Blackwell, vol. 39(7), pages 887-906, November.
    2. Howells, John, 2000. "The response of old technology incumbents to technological competition - Does the sailing ship effect exist?," Working Papers 2000-1, University of Aarhus, Aarhus School of Business, Department of Management.
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    Keywords

    Technological development; Innovation; Competition;

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