Strategic reactions to technology competition

Abstract

PurposeThis paper aims to develop a conceptual decision‐making model aimed at supporting managers' selection of alternative strategic reactions to technological change.Design/methodology/approachThe paper begins with a literature review of strategic reactions incumbent firms have made to technological change. This is followed by an analysis and indication of the data needed/available in the strategic reaction decision‐making process.FindingsThe ability for an organization to understand its strategic position with regard to six items: possibility of old product revitalization; extent of disruption of innovation; old market competitive position; difficulty in entering in the new market; dynamic capabilities; old core capabilities; is critical when deciding a course of action in technologically competitive markets. Therefore, the hiring of external consultants (e.g. technology experts) is advisable beyond the normal knowledge managing practices used by the organization.Originality/valueThe paper extends literature on technology competition proposing a model (and a multiple‐item scale) for decision‐makers of incumbent firms in order to strategize when technological competition occurs.