Adoption of continuous processing technologies: Its strategic importance in standardized industrial product-markets

Abstract

The adoption of continuous, new, processing technologies has frequently been discussed in business theory; however, its impact on firm performance has rarely been empirically examined. This study examines its importance for manufacturers of standard industrial products by using the wood building products industry as a representative industry. Firms are grouped, based on their level of adoption, using a hierarchical clustering technique. These groups are then profiled using descriptive statistics. Results provided a measure of empirical evidence that increased adoption of new, continuous, processing technologies was linked to superior performance as measured by profitability and changes in relative market share. Firm size, investment intensity, and degree of forward vertical integration had little bearing on whether a firm adopted these processing technologies. These results suggest that firms operating in standardized industrial product-markets should consider the adoption of new, continuous, processing technologies as part of their business strategy.