Strategic Options for Old-Technology Firms

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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

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