Established Firms’ Strategic Decision Making when Faced with Low-End Disruptive Innovation
Date
2014-04-09
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Abstract
How should incumbent firms respond to emerging disruptive business model innovations (i.e., substantive changes in the way the value is created and appropriated) in their industries? Despite much discussion, the current literature provides no clear-cut answer. This lack of theoretical understanding is reflected in frequently observed in practice problem when established firms are unable to adapt to their industries’ disruptive changes. This sets the motivation for the current dissertation, aimed at advancing our understanding of the phenomenon of disruptive business model innovations. I intend to achieve this goal by addressing the following two research questions: (1) what are the optimal responses of established incumbent companies to disruptive business model innovations gaining momentum in their industries, and (2) what are the factors causing managers of incumbent companies to make different strategic choices in such situations? To address these questions, I unite existing views in a deductively developed model of incumbent response to disruptive business model innovations. Then, I build a dynamic behavioral model of incumbent firms’ responses. The model describes observed behavioral patterns in disrupted industries and explains incumbent actions and reasons why these actions might deviate from the rational paths. Also, I propose a rational response model, comprising a set of testable propositions regarding the contingency factors determining optimal incumbent actions when facing a disruptive business model innovation. Empirical parts of the dissertation are based on two surveys of incumbents facing low-end disruptive business model innovations in their industries – real estate brokerage and higher education.
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Business Administration--Management
Citation
Osiyevskyy, O. (2014). Established Firms’ Strategic Decision Making when Faced with Low-End Disruptive Innovation (Doctoral thesis, University of Calgary, Calgary, Canada). Retrieved from https://prism.ucalgary.ca. doi:10.11575/PRISM/25952