Strategic Options for Old-Technology Firms
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 (...) Read more? Sign up for free
Please register now to read all responses and to join this discussion yourself. It's easy and 100% free.
Sign up for free Log in