Inertia

Question 1

Economist

Answer 1

2012: E.g. Kodak vs. FujiFilm - Kodak was complacent and resistant to change, whereas FujiFilm diversified (e.g. into cosmetics)

Question 2

Levinthal

Answer 2

1997: Rugged Landscapes: where you are at the start is hugely important, as you stay in the local vicinity - stuck on a peak; random change picks some peaks and wipes out others

E.g. Tesco/Aldi - can’t change everything at once, can’t just copy Aldi

(Link to Teece et al., 1997, path dependency)

Question 3

Hannan & Freeman

Answer 3

1977: Population selection process favours firms that are less able to change - accountability, being conventional, have to explain to shareholders, never going to do anything abnormal

E.g. Barnes and Noble ignored Amazon
E.g. Blockbuster ignored Netflix
Leads to disruptive technologies (Bower & Christensen, 1995 - see 6. Innovation)

Question 4

Leonard-Barton

Answer 4

1997: Core capabilities and core rigidities: can’t just abandon your competency when the market changes - which then holds you back

E.g. HMV
E.g. Nokia - competency was phones that lasted; now phones are designed to break. They didn’t foresee the changes in the mobile phone industry
E.g. Blockbuster - adapted to change from VHS to DVD but couldn’t cope with online - they were good at shops

(Barney assumed a constant environment)