Differentiating Market Strategies for

Differentiating Market Strategies for - IEEE TRANSACTIONS...

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Unformatted text preview: IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 49, NO. 4, NOVEMBER 2002 341 Differentiating Market Strategies for Disruptive Technologies Steven T. Walsh , Member, IEEE , Bruce A. Kirchhoff, and Scott Newbert Abstract The literature is full of anecdotes that show new small firms attacking existing markets with innovations based upon disruptive technologies and achieving phenomenal success. Because of this, some theorists argue that disruptive technologies are best commercialized by new small firms. If this is true, can a logical rationale be developed that explains this unique capacity of new firms? If so, can empirical research of new and established firms in an industry fraught with a disruptive technology identify the advantages that new firms have over established firms in the commercialization process? The purpose of this paper is to ex- amine the different roles of established and new firms in disruptive technology commercialization. The authors begin by developing a model of the innovation process beginning with technology creation and ending with user adoption and application. From this model they develop propositions for testing. The authors use survey data collected from 72 micro-electro-mechanical-systems (MEMS) manufacturing firms. Their results from the MEMS industry show that established firms rarely commercialize disrup- tive technologies and then prefer to use market-pull strategies to accomplish this. New firms select primarily disruptive technolo- gies and choose either market-pull or technology-push strategies for commercialization. Perhaps more important, time to market for new firms is one-fourth that for established firms. These results suggest that new firms have two advantages in commercialization of disruptive technologiesflexibility in marketing strategy and much shorter times to market. Index Terms Commercialization, disruptive technology, market strategies, new firms advantages, survey of MEMS industry managers, technology push versus market pull. I. INTRODUCTION T HERE IS widespread agreement that the commercializa- tion of technological innovation has been a major contrib- utor to contemporary industrialized nations wealth and pros- perity. Many of these technological innovations are rooted in disruptive technologies. The definition of disruptive technolo- gies builds upon the strategic categorization scheme presented by Bower and Christensen [10], Ehrenberg [14], and others. They view technologies as either those that sustain the current manufacturing practices and technological capabilities required in an industrial setting or alternatively disrupt the current ca- pability set required by a given market. Furthermore, disruptive technologies are those that do not support current firm-based Manuscript received Feburary 15, 2001; revised September 15, 2001. Review of this manuscript was arranged by Special Issue Editors S. K. Kassicieh, B. A....
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Differentiating Market Strategies for - IEEE TRANSACTIONS...

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