Product Technology Strategies and Firm Survival: The Personal Computer Industry 1974-1994

41 Pages Posted: 21 Feb 2007

See all articles by Barry L. Bayus

Barry L. Bayus

University of North Carolina Kenan-Flagler Business School

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business

Date Written: February 2007

Abstract

Studying the US personal computer industry from its inception in 1974 through 1994, we address the following questions. What product technology strategies increase the survival chances of entrants into new, technologically dynamic industries? Does the effectiveness of these strategies differ by pre-entry experience? Does the effectiveness of these strategies differ by when firms enter a new industry? Consistent with the published literature, we find that diversifying entrants have an initial survival advantage over entrepreneurial startups. But, we find the reverse for later entrants: startups that enter later in the industry have a survival advantage over the later entering diversifying entrants. We explain this finding in terms of the firms' product technology strategies (i.e., offering products based on the technology standard and products incorporating the latest technology), pre-entry experience, and entry timing. Our findings highlight that it is crucial to study what firms do after they enter a new industry in order to more completely understand their ultimate performance.

Keywords: innovation, entrepreneurship, industry evolution, marketing

JEL Classification: O3, M31, L63, L1

Suggested Citation

Bayus, Barry and Agarwal, Rajshree, Product Technology Strategies and Firm Survival: The Personal Computer Industry 1974-1994 (February 2007). Available at SSRN: https://ssrn.com/abstract=964421 or http://dx.doi.org/10.2139/ssrn.964421

Barry Bayus (Contact Author)

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599
United States
919-962-3210 (Phone)

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

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