Leapfrogging, Cannibalization, and Survival during Disruptive Technological Change: The Critical Role of Rate of Disengagement

Posted: 9 Oct 2020

See all articles by Deepa Chandrasekaran

Deepa Chandrasekaran

University of Texas at Austin

Gerard J. Tellis

University of Southern California - Marshall School of Business, Department of Marketing

Gareth James

University of Southern California - Marshall school of Business

Date Written: October 7, 2020

Abstract

When faced with new technologies, the incumbents’ dilemma is whether to embrace the new technology, stick with their old technology, or invest in both. The entrants’ dilemma is whether to target a niche and avoid incumbent reaction or target the mass market and incur the incumbent’s wrath. The solution is to know to what extent the new technology cannibalizes the old one or whether both technologies may exist in tandem. The authors develop a generalized model of the diffusion of successive technologies, which allows for the rate of disengagement from the old technology to differ from the rate of adoption of the new. A low rate of disengagement indicates people hold both technologies (co-existence) whereas a high rate of disengagement indicates they let go of the old technology in favor of the new (cannibalization). The authors test the validity of the model using a simulation of individual-level data. They apply the model to 660 technology pairs and triplets-country combinations from 108 countries spanning 70 years. Data include both penetration and sales plus important case studies. The model helps managers estimate evolving proportions of segments who play different roles in the competition between technologies and predict technological leapfrogging, cannibalization, and coexistence.

Keywords: New Technologies, Disruption, Leapfrogging, Cannibalization, Disengagement

Suggested Citation

Chandrasekaran, Deepa and Tellis, Gerard J. and James, Gareth, Leapfrogging, Cannibalization, and Survival during Disruptive Technological Change: The Critical Role of Rate of Disengagement (October 7, 2020). USC Marshall School of Business Research Paper, Available at SSRN: https://ssrn.com/abstract=3707031

Deepa Chandrasekaran

University of Texas at Austin ( email )

2317 Speedway
Austin, TX 78712
United States
3236330823 (Phone)

Gerard J. Tellis (Contact Author)

University of Southern California - Marshall School of Business, Department of Marketing ( email )

Hoffman Hall 701
Los Angeles, CA 90089-0443
United States
213-740-5031 (Phone)
213-740-7828 (Fax)

HOME PAGE: http://gtellis.net

Gareth James

University of Southern California - Marshall school of Business ( email )

Marshall School of Business
BRI 401, 3670 Trousdale Parkway
Los Angeles, CA 90089
United States

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