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Strategic Options for Old-Technology Firms
Don Smith
What should be the strategic response of old-technology firms when a promising new technology shows up? Typically firms respond by either
1. Fighting the new technology, or
2. Trying to make a transition to the new technology.
Ron Adner and Daniel C. Snow recommend a third strategic option in their article worth reading "Bold Retreat - A New Strategy for Old Technologies" in the Harvard Business Review of March 2010:
3. Bold retreat. Proactively give most of the established market to the new technology and instead pursue either a:
3a. Retrenchment to a niche of the traditional market (where the old technology has some advantage over the new technology), and/or
3b. Relocation to a new market (where the old technology has some advantage over the new technology).
Main advantages of a bold retreat strategy are that it may allow the firm to continue to make money on a smaller scale. This may give it a later option to invest in another growth opportunity.
Drawbacks are the need for a significant organizational change process and a tough communication job to explain this strategy to current stakeholders.
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Strategic Options for Old-technology Firms
Lee Buan Heng, Manager, Singapore, Member It seems we need to have strategic options to prevent disruptive innovations in financial product, it deemed not a technological concern, but had kill...  |
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Disruptive Technology?
Kirk C. Heriot, Professor, United States, Member It would seem to me that this "theory" would be contingent on the strategy the firm is presently employing, using |
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How Do You Know the New Tech Has Legs?
Jim Kaiser, Entrepreneur, United States, Member Today there are many new technologies hitting the street - social media, cloud computing, etc. Does a litmus test exist for considering new technol... |
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Examples of Third Strategic Option
Julio Villafuerte, Student (MBA), Peru, Member Do you have examples of companies that have applied the third strategic option recommended by Ron Adner and Daniel C. Snow?... |
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Examples of Companies with Bold Retreat Strategy
Jaap de Jonge, CEO, Netherlands, Editor Clearly you have to consider old technology companies to find examples of bold retreat strategies. The authors actually mention Linjett, Continental, ... |
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Rick Mueller
