'Old' Technology Responses to 'New' Technology Threats: Demand Heterogeneity and Graceful Technology Retreats

Keywords

technology transition, racing vs. retreat strategies, market repositioning

Abstract

We explore the implications of a real and common alternative to attempting the transformation required to embrace a new, dominant, technology – the choice to maintain focus on the old technology. In considering this choice we distinguish between ‘racing’ strategies, which attempt to fight off the rise of the new technology by extending the performance of the old technology, and ‘retreat’ strategies, which attempt to accommodate the rise of the new technology by repositioning the old technology in the demand environment. Underlying our arguments is the observation that the emergence of a new technology does more than just create a substitute threat – it can also reveal significant underlying heterogeneity in the old technology’s broader demand environment. This heterogeneity is a source of opportunities that can support a new position for the old technology, in either the current market or a new one. Using this lens we explore the decision to stay with the old technology as a rational, proactive choice rather than as a mark of managerial and organizational failure. We then consider the distinctive challenges and organizational dynamics that arise in technology retreats, and their implications for the ways in which managers and scholars should approach questions regarding the management of capabilities, lifecycles, and ecosystems.

Original Publication Citation

Ron Adner and Daniel C. Snow, 2010. “Old technology responses to new technology threats: demand heterogeneity and technology retreats.” Industrial and Corporate Change 19 (5): 1655-1675.

Document Type

Peer-Reviewed Article

Publication Date

2010

Publisher

Industrial and Corporate Change

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Associate Professor

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