| The Rise and Fall of Dominant Designs at the Producer-Consumer Interface |
| | Pennings, Johannes | U. of Pennsylvania | pennings@wharton.upenn.edu | (215) 898-7755 |
| | Kim, Hann Ohl | U. of Pennsylvania | kim@management.wharton.upenn.edu | (215)-898-1233 |
| | In this paper, we explore the rise and fall of dominant designs in the tennis racket industry. Most studies on technological evolution have attributed changes in dominant designs and technological evolution to competitive conditions among industry incumbents and new entrants. In contrast, we consider not only the conduct of competitors, but also the choice behavior of consumers as a critical component determining the path of technological development: we focus on the producer-consumer interface for understanding the rise and fall of dominant designs. In particular, we explore advertising as a strategic choice by the firm with which it can manage the producer-consumer interface by overcoming the initial resistance of consumers and legitimizing innovations. As a simple technology, with many generations of products, the tennis racket industry provides us with an interesting setting in which we can isolate both producer and consumer aspects in shaping successive dominant designs. |
| | Keywords: dominant design; technological evolution; consumer demand |
| Unraveling the Process of Creative Cooperation: Complementary Innovation in the Biopharmaceutical Industry |
| | Rothaermel, Frank T. | U. of Washington | ftr@u.washington.edu | (206) 523-4353 |
| | Not every innovation must necessarily lead to a Schumpeterian process of ‘creative destruction.’ We build upon the innovation literature and add the notion of ‘complementary innovation.’ A complementary innovation will initiate a process of ‘creative cooperation,’ meaning it will induce extensive cooperation between incumbents and new entrants in the face of radical technological change. We find that incumbent firms can be very successful in adapting to a discontinuous environment through cooperation with new entrants. In addition, incumbents are often in a position to benefit more from an innovation than new entrants even though the new entrants are the source of the innovation. The biopharmaceutical industry is the empirical setting for testing hypotheses derived from an integration of innovation and firm collaboration literature. |
| | Keywords: creative cooperation,; technological change,; biopharmaceutical industry |
| Beyond Incumbents and Entrants: An Empirical Exploration of Product Line Management Strategy After Radical Technological Change |
| | Jones, Neil | U. of Western Ontario | njones@ivey.uwo.edu | (519) 661-4084 |
| | Research on firm performance after the introduction of a radical technological change has primarily concerned itself with differences between incumbents and entrants. This paper explores other factors that may influence firm performance over the longer term after a radical change -- specifically, those related to product line development strategy. Following a radical change, a period of incremental technological change typically creates the opportunity for rapid development of new products. In such settings, strategies to manage multiple products, including families of products that may be derived from a common platform, may be expected to impact competitive performance. The data for the study are from the telecommunications switching sector, specifically the private branch exchange (PBX) industry. 56 firms and over 240 new products were analyzed over 22 years. For the literature on competition after radical technological change, this study shows that incumbent-entrant based explanations of firm performance are incomplete. Specifically, the results demonstrate that various dimensions of product line strategy explain significant additional variation in firm performance. |
| | Keywords: Product Line Strategy; Radical Technological Change; Firm Performance |