Abstract
This study examines the effects of competitive pressure by new entrants and technological discontinuity on the strategic innovations adopted by incumbent state-owned enterprises (SOEs) in India. Due to government ownership, these firms are dominant players domestically and their market leadership is challenged by new entrants. Technological discontinuity challenges technology leadership. Incumbent firms develop knowledge networks by working with partners, suppliers, and buyers. The incumbent firms must strike a balance between the exploitation of current technology and the exploration of new technology. This study aims to understand the effect of new entrants and technological discontinuity on the exploitation and exploration strategies of Indian SOEs in the manufacturing sector. The quantitative analysis is carried out using partial least squares structural equation modeling. For Indian SOEs, the technological discontinuity does affect exploitation and exploration, but new entrants have no such effect. The study confirms the moderating effect of knowledge networks on exploitation.
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