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Exploring Factors Influencing Incumbents' Response to Disruptive Innovation

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Abstract

This paper explores how certain incumbent characteristics influence an established firm's response to disruptive innovation. More specifically, it looks at the challenges a middle size, top segment company faced and how this affected its reaction to the disruptive threat. This is done by conducting an in-depth case study of Hasselblad, a manufacturer of professional cameras. It can be seen in this case study that Hasselblad's limited resources and its niche strategy affected how it managed the transition from analogue to digital camera technology. These characteristics made it difficult to allow experimentation with digital imaging in the main business since the available resources were severely limited and this initially inferior technology could harm the brand image. Instead, Hasselblad pursued collaborations and eventually launched a hybrid camera, which was compatible both with film and digital backs but did not become the expected success. Being close to bankruptcy, the digital resources needed were acquired and the company eventually survived the disruption. In conclusion, this paper argues that the managerial challenges and solutions to the innovator's dilemma depend upon the particular characteristics of incumbents and that this heterogeneity has not been sufficiently captured by previous literature. It also suggests that medium size, top segment firms can survive disruptive innovation through collaboration and acquisitions.

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