Organizational Behavior of Established Firms to a Disruptive Innovation: The Case of NEC’s Behavior in the Japanese Laptop Computer Industry
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Abstract
This paper analyzes organizational behavior of an established firm when disruptive innovation, a change in product architecture, occurs on a previous product. For the analysis, the paper analyzes and compares the behavior of an established firm through product trajectories between NEC (an established firm) and Toshiba (a new entrance) in the Japanese laptop computers industry. An established firm that has developed and produced a previous product is difficult in adapting to a disruptive innovation due to accumulated immense knowledge through a previous product. By using regression model in the product trajectory analysis, the paper analyzes the behavior of established firms. Product trajectory means a pattern of product strategy shown in a series of products. Two facts found in the paper are as follows. First, though NEC was able to develop a laptop computer at the same time with Toshiba, it was restricted by the resources of a previous product in the early stage. Second, possibility of learning trap in the adapting process was found. The paper found the risk that too much commitment in one evolution stage would prohibit the adapting behavior in the next evolution stage.
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