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The Evolution of a Competence's Market Specificity and the Emergence of Advantage During a Technological Disruption

Sosa, M. Lourdes (2007) The Evolution of a Competence's Market Specificity and the Emergence of Advantage During a Technological Disruption. [Industry Studies Working Paper:2007-30]



I present an exploratory study to investigate the evolutionary path of a competence (rDNA/fermentation technology) during a technological discontinuity and its impact on the performance heterogeneity across incumbents and both diversifying and de novo entrants. As such, this paper is based in detailed, direct industry observation, complemented with large-sample secondary data collection when necessary. Through such combination of industry observation and accompanying quantitative analysis, I find that this competence evolved with increasing market specificity. Such evolutionary path determined a significant part of performance heterogeneity during the technological disruption. Diversifying entrants outperformed incumbents only in the variant of the new technology that required rDNA/fermentation technology, that is, only in the variant with this particular evolutionary path. This case study supports the theoretical conclusion that incumbents do not necessarily fail to successfully execute R&D for all radically new technologies, as previously argued in studies of incumbents’ structural inertia. Incumbents in the present case fail to execute the R&D of the new technology only for that variant in which they cannot foresee the applicability to their own markets. That is, incumbents as organizations are distinctively subject to structural inertia in their R&D structure, and to inertia in the structure with which they monitor the environment.

Industry Studies Series #:2007-30
Item Type:Industry Studies Working Paper
Uncontrolled Keywords:industry studies, industry studies working paper, industry studies association, industry studies research
ID Code:146
Deposited By:Mr Robin Peterson
Deposited On:23 Feb 2010 14:19
Last Modified:07 Jun 2010 10:45

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