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

34 Pages Posted: 4 Mar 2009 Last revised: 5 May 2013

See all articles by Ron Adner

Ron Adner

Dartmouth College - Strategy & Management Area; Dartmouth College - Tuck School of Business

Daniel C. Snow

Brigham Young University - J. Willard and Alice S. Marriott School of Management

Date Written: May 2009

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.

Suggested Citation

Adner, Ron and Snow, Daniel C., 'Old' Technology Responses to 'New' Technology Threats: Demand Heterogeneity and Graceful Technology Retreats (May 2009). Available at SSRN: https://ssrn.com/abstract=1353485 or http://dx.doi.org/10.2139/ssrn.1353485

Ron Adner (Contact Author)

Dartmouth College - Strategy & Management Area ( email )

Hanover, NH
United States

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Daniel C. Snow

Brigham Young University - J. Willard and Alice S. Marriott School of Management ( email )

Provo, UT 84602
United States

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