Summary: Marketing & Innovation

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• 1 Artikel 1 - Tripsas (1997): Unraveling the process of creative destruction: complementary assets and incumbent survival in the typesetter industry

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• Which question in explored in the article by Tripsas (1997)?

  Why do incumbent firms sometimes fail drastically in the face of radical technological change, yet other times survive and prosper (opbloeien)?

• What are the two perspectives on creative destruction according to Shumpeter (1934 & 1950)?

  Shumpeter:
  

  • 1934: In fluid industries, new entrants innovate with technologically superior products and displace incumbent firms.
  • 1950: Incumbent firms have an advantage over new entrants because they possess critical specialised complementary assets.

• What does the typesetting industry entail?

  Typesetting is the process of arranging text as input to the printing process.

• Which three generations of radical technological change can be distinguished in the typesetter industry?

  1. Analog phototypesetting (1949)
  2. Digital CRT phototypesetting (1965)
  3. Laser imagesetting (1976)

• What is the effect of each generation of radical technological change on the investment incentives?

  • The generations were incremental: the old generation of technology continued to compete with the new generation.
  • Entrants were not able to monopoly price.
  • The price/performance of each new technology did improve over time, resulting in eventual substitution for the old technology.

• What is the effect of each generation of radical technological change on technological competence?

  • Each new generation required new skills. These generations were all seen as competence-destroying.
  • The management of machine logic moved from mechanical to electromechanical to electronic to primarily software

• Creative destruction in the typesetter industry: How can the investment behaviour of new entrants and incumbents be described?

  • Very little investment by new entrants in the not metal typesetter technology
  • In the next generations: More entrants were diversifying firms with related experience. Almost every firm that established presence in a typesetter generation invested in developing a machine for the following generation.
  • Incumbents invested earlier than new entrants.

• Creative destruction in the typesetter industry. How can the technological performance of incumbents vs new entrants be described?

  • Incumbents based their development of new generations’ machines on their established, efficient routines in the architecture of the prior generation. (example: inferior performance)
  • In all three generations, incumbents’ machines were significantly slower than those of new entrants. 

• Creative destruction in the typesetter industry. How can the appropriability and specialised complementary assets be described?

  • When an incumbent’s technological competence is destroyed but the incumbent still controls valuable specialised complementary assets, it should be able to protect is competitive position.
  • New entrants that possess specialised complementary assets should have an advantage over those that do not.

• 1.1 Most important

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• Which three salient complementary assets are distinguished in the typesetter industry?

  1. Specialised manufacturing capability: Focused on just one generation, gave no advantage in the long-run
  2. Sales and service network: Less important as clients began to buy typesetter machines for their offices.
  3. Font library: Resistant to the technological changes and provided a competitive advantage