Unravelling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry Flashcards
What is “Tripsas, M. (1997). Unravelling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry” about?
The article begins by addressing the phenomenon of creative destruction. Creative destruction refers to how technological innovation can destabilize established industries, displacing incumbent firms. However, contrary to Schumpeter’s early theory where new entrants always dominate with superior technology, Tripsas investigates why incumbents sometimes successfully adapt and retain their market positions. This study seeks to identify the conditions that influence whether incumbents will survive or be displaced during periods of radical technological change.
What are the key components affecting incumbent survival in “Tripsas, M. (1997). Unraveling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry”
1) Investment behavior - whether they invest in dev of new tech and timing or said investments
2) tech capabilities - how the competence of firms compares to new entrants (and ability to develop new tech)
3) specialized complementary assets - said assets are crucial for commercializing tech but are hard for new entrants to come by
What is the conclusion of Tripsas, M. (1997). Unravelling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry”?
Understanding the interplay of investment, technical competence, and specialized complementary assets is essential to explaining incumbent survival or failure amid disruptive change. Her findings provide a nuanced view of creative destruction, where survival depends not merely on technological investment but on the strategic use and adaptation of complementary assets.
What is “architectural innovation”?
changes in the way components interface; this can destroy the value of existing beliefs and patterns
What is “dynamic capability”?
the ability of a firm to renew, augment, and adapt its core competencies over time
What is a “value network”?
the system of producers & markets serving the ultimate user of the product or service to which a given innovation contributes
What are the managerial implications of “Tripsas, M. (1997). Unravelling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry”?
1) Strategic resource allocation - incumbents should consider not only tech investments but also the preservation & adaptation of complementary assets to maintain competitive positions during tech shifts
2) Value of complementary assets - can help incumbents remain resilient against new entrants, suggesting investments in such assets is critical in industries prone to tech disruption
3) Role of org. flexibility - avoiding inertia; firms that can adapt their routines & org structure to new tech are better equipped to survive competence-destroying changes
What were the quantitative analysis findings of “Tripsas, M. (1997). Unravelling the Process of Creative Destruction: Complementary Assets and Incumbent Survival in the Typesetter Industry” highlights?
1) Competence Destruction Alone: If incumbents lost technical competence but retained complementary assets, they could still perform well commercially (e.g., digital and laser generations).
2) Competence and Complementary Asset Devaluation: Incumbents experienced significant losses only when both technical competence and complementary assets were devalued, as with the shift to analog phototypesetting.
