One for All and All for One: SME Response Strategies to a Threat of Disruptive Innovation

Abstract

Whereas the responses of large industry players to an ongoing disruptive innovation in their respective industries have been studied extensively in existing literature, the actions of small and medium-sized enterprises (SME) facing a disruptive threat are not well explained. This article presents the results of a two-phase study focusing on the actions of small firms within the natural cork stopper industry, exposed to the threat of a disruptive innovation from alternative technologies in the form of plastic and aluminum stoppers. The first phase involved an exploratory inductive study of incumbent responses, suggesting three main SME collaborative actions in the disrupted industry: resource co-development, knowledge sharing, and following the industry leader. The second phase provided an explanation of the observed heterogeneity in SME response strategies, introducing a deductively developed behavioral decision-making framework explaining the cognitive antecedents of incumbent actions, and testing it using a survey sample obtained from industry players. The results suggest that engagement in collaborative actions is predicted by the firm’s subjective performance relative to aspirations, perceived threat of disruptive substitution, and the level of potential slack resources.