Strategic responses to technological threats

Abstract

Technological innovation can create new industries and transform or destroy existing ones. At any time, many businesses are confronted with a host of external technological threats. Managements of threatened firms realize that many threats may not materialize, at least in the short run. However, one or more of those potential threats may develop in ways that will have devastating impact. Providers of kerosene lamps, buggy whips, railroad passenger service, steam radiators, hardwood flooring, passenger liner service and motion pictures all have had to contend with such threats. Few environmental changes can have such important strategic implications. A typical sequence of events involving the traditional firm's responses to a technological threat begins with the origination of a technological innovation outside the industry, often pioneered by a new firm. Initially crude and expensive, it expands through successive submarkets, with overall growth following an