Incumbent Response to Radical Technological Innovation: the Influence of Competitive Dynamics on Strategic Choice

• Main Author: Carter, William R.
• Other Authors: Salimath, Manjula S.
• Format: Others
• Language: English
• Published: University of North Texas 2015
• Subjects: incumbent response; technological innovation; strategic choice; competitive dynamics; Electronic industries > Technological innovations.; Competition.; Business planning.
• Online Access: https://digital.library.unt.edu/ark:/67531/metadc804843/

Prior research on incumbent firm response to radical technological innovation identifies firm, technology, and environmental factors associated with incumbents’ performance after a technology shift. What remains unexplored are factors affecting choice of response made before a technological shift occurs. Such ex ante choices are important intermediate outcomes affecting long-term performance outcomes. Competitive considerations may be influential inputs in choice processes because technological innovation is often related to competitive strategy. The resulting research question for this study is: What role do competitive considerations play in incumbent firms’ ex ante strategic choices in response to potentially radical technological innovations? Findings from a survey of key informants in the electronics industry whose firms face a potential technological disruption (n=120) suggest that incumbents’ response choices are affected by competitor-related orientations and by perceptions of relative strength of their strategic assets. Limited support is found for a moderating effect of perceptions of the competitive environment. The results of this study extend theory on incumbent response to radical technological change by shedding light on the influence of competitor interdependence. Findings also suggest the importance of strategic choice as an intermediate variable in understanding incumbents’ long-term performance. Research examining choice factors at varied stages of a technology’s diffusion can further advance understanding of the evolving nature of strategic response choices and the effects they have on long-term performance.