The Birth of the Vcr Industry

Rosenbloom, Richard S., Technological Pioneering and Competitive Advantage: The Birth of the VCR Indusry , California Management Review, 29:4 (1987:Summer) p.51

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.J2        RICHARD S. ROS NDL00tt & MICI\ AEL 1. CUSIJM/\V0

» Sf›’clr$it Cluri) and Coiisistou:y— ?zcii firm proved able to conduct long-tern development efforts consistently targeted oa the most chal-

lenging and also, potentially, tlic most luci ativc market—the c‹insumer; and each based those commitments on sound technica1ct‹oices, i’eflec t.{pg

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engineers.

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The strategic manageiiieot of t c•.liiiology is a topic that Ins been addressed actively in reren t years in writ mgs afoot business strategy and ithout technological innovation, two literatures that had long progressed largely indcpeodeii tly.' The central issue for managers is how to translate tech- rologital capability into coiiipetitive afliantage. Leadership in technology does not always bring siibstaiitial econoi nic return. Yet, iii numerous cases, a Ann that led in development of an important new technology, tins gained a decisive and end orio;; advantage.

Most discussions of technology in the liter..tu re of competitive strategy focus on innovation—that is, on determining when and how best to intro ducc a norel product or process to commercial use. 2’lie ti›uirg»f ii!arhet nifty (f rst movei or follower), pro4iitt positioning(segmentation, pricsg, etc.), ard #ir orgu›i iir ti»i of 9r ‹ltittioii Atm dislributio» (mzki.• or buy, channels, etc.) are thi most salient strategic issue.s is the inaosgemeat of innovati‹in. Michael Poi te r discusses the relationship betw‹ien these

choices, industry strut:ture, and a finn's existing competitive strategic

l avid ’feet’e extends tli• analysis try focusing on three principal situational

factors: the character ‹›f the technc!ogy (especially the degree Ie› which it tan be protected against its appropriation fry others), the state ‹if éidustry evolution (in relation to ar ••raiice of a tl‹›mir iint ‹design), and the character of complementary (non -teclir ological) assets requirem to complete the innovation.’

Yechnoiogical Pioneering—lJ« t tw«»« three f«ct›is are theirselves, at least is part, consequences of choices ma‹le curlier by an asp g inno›•ator .in8 its rivals. In other wor‹ls, the benefits that a firm can realize

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abuut timing, positioning, and implementation—are shaped substantially by steps l al‹en years earlier during dcvelopiiieot of the techoolo . for an «merging technology, « lii«’s s«ccrss in the management ofi»novat‹on

‹depends on its grioi con‹Iuct xs a technological pioneer.

Every innovator in a new technical fiel‹l must first be a pioncer. When executives perceive that a ‹lcvelo/›ment in tecl nolop" presents a major opp‹›r tunity (or threat), tI›cir finn (at Icast implicitly) ‹levclops a “posture" toward it.' Its stance may be /›rimarily passive, letting others s\›ape the course of events, bcco» i»¿, ii› effect, a “monitor" in the sense of“keeping

’HIE ElkTh OF THE YCR  INDUiiTR7        53

watch“ over developments  elsewhere.  /Ilternatively,  a firm may become a pioneer, investin ¡in development aimed at achieving some commercially relevarit product or process. A first n‹w er logim£y must have been among the pioneers in a new technology, but each pioneer retains the option to be a “follower" in «onmercializatioo.

The strategic issues in development ;iara£e1 those of innovation: tlefining a slratepr role (pioneci or monitor); fi!clllI0$0 6df)osilioui›i$(product/mar- k•t locos, technical agenda, tiiiie 8or J›on, level of commitment); and i›n-

¿/rixenfulioii (internal development, Joint venture, purchase I.echnology). ”Technological positioning,” analogous to market positioning, estabf shes the product/matket targets, the time horizon for accompf shinent, and the level of resources committed. An important aspect is the definition of a “technical agenda,” the hicrarthy of salient problems to be resolved in development. Managers shape the distinctive capabilities necessary for competitive advantage by the ways in which they iro›1em.cut the tasks of development and innovation. For example, they can esfib£sh prop‹ie•ry know-how by investing in url.ernal dé¥i!lIl lTlélll O$ technology. Firms also› acquire. necessary complementary assets by deveIopi›ient, purchase, or

through  alliances 6

An Overview of ¥Cft fle  elopmeiit and Innovation

In broad outline, the story of videoi ecording presents a f iar pattern in the history of technology. A inajoi £wovation, the introduction or tele- vision after the Second World far, cr‹•steé a herd for a way to make recordings that would offei the fidelity on playbiicL and ease of use that radio bi oadcasters had attiiined with magnetic Ape recorders. Firms al- ready iii the broadcast equipment business attempted to invent a device suitable for this well-defined application. In the early 1950s, before anyone had solved the problem of inventing u practical videotape recorder  (VTR),

$0rt2e tI!CAica work was iindemay ir the laboratories of RCA  é Ainpex in the hurted States i+d J“oslf ba in ,Impair. The Ainpex team was tirst to succeed and their ma‹'hine took the t›r‹iadcast»ig iiiarket by storm.  Within a few years, RCA (through cross-litjoin: venture with Anipex) also bedtime important suppliers of YTks for use in broadcast studios.

A Ma8!l  G7/étT Visions and ilea.lizatioit—Although some engineers

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ogy cotild be developed to seise a mass market, a5 three organizations elected not to pursue that oppoituiiity. At the same tirtie, three other firms 5Y0, Sony, and Matsushita), stimulated by the inventive and com- mercial suctes!ies of the othei trio, soon began pioneering technical efforts of their own. The latter trio of pioneers embarked on programs of technical development and commercial enteq›rise that they sustained right up  to