All exam material (including cases)
Strategy and Change
6013B0507Y
Summary
University of Amsterdam
BSc Business Administration
3rd year, semester 2 period 1 (2020-2021)
Anna Jobse
,Table of Content
Week 1: The evolution of industries/technologies and the Innovator’s Dilemma............................................ 3
Tushman & Anderson (1986). Technological discontinuities and organizational environments. Page 439-446 3
Anderson & Tushman, 1990. Technological Discontinuities and Dominant Designs: A Cyclical Model of
Technological Change. Pages 604 – 618 ............................................................................................................ 5
Christensen, 2013. The innovator's dilemma: when new technologies cause great firms to fail. Introduction . 7
Week 2: How to adapt to and create value from technological changes; Ambidexterity ............................... 10
Birkinshaw & Gibson (2004). Building ambidexterity into an organization. MIT Sloan management
review, 45(4), 47-55.......................................................................................................................................... 10
Christensen & Overdorf (2000). Meeting the challenge of disruptive change. Harvard business review, 78(2),
66-77 ................................................................................................................................................................ 12
HBR Case: Hermes System. ............................................................................................................................... 15
Week 3: Internal Corporate Venturing .......................................................................................................... 17
Eisenhardt & Sull (2001). Strategy as simple rules. Harvard business review, 79(1), 106-119. ....................... 17
Sethi & Iqbal (2008). Stage-gate controls, learning failure, and adverse effect on novel new products. Journal
of Marketing, 72(1), 118-123 ........................................................................................................................... 20
Christensen, Kaufman, and Shih (2008). “Innovation Killers: How Financial Tools Destroy Your Capacity to Do
New Things” Harvard Business Review, 98-105............................................................................................... 22
HBR Case: Intrapreneurship at Alcatel-Lucent. ................................................................................................. 24
Week 4: External Corporate Venturing ......................................................................................................... 28
Chesbrough “The Era of Open Innovation”. Sloan Management Review, 2003. 44, 3, 35–41 ......................... 28
Miles & Covin, (2002). Exploring the practice of corporate venturing: Some common forms and their
organizational implications. Entrepreneurship theory and practice, 26(3), 21-40 ........................................... 30
HBR case: Innovation at Unilever: The Foundry ............................................................................................... 33
Week 5: Digital change: the pace of change, the impact of technology, & its trends ..................................... 36
Porter & Heppelmann, (2015). How smart, connected products are transforming companies (2). Harvard
business review, 93(10), 96-114. ...................................................................................................................... 36
Porter & Heppelmann, (2014). How smart, connected products are transforming competition (1). Harvard
business review, 92(11), 64-88 ......................................................................................................................... 40
HBR case: Digitization of an Industrial Giant: GE Takes on Industrial Analytics ............................................... 42
Week 6: Digital transformation and Business Models ................................................................................... 45
Porter & Heppelmann, (2014). How smart, connected products are transforming competition (1). Harvard
business review, 92(11), 64-88 ......................................................................................................................... 45
Bock, M., Wiener, M., Gronau, R., & Martin, A. (2019). Industry 4.0 enabling smart air: digital transformation
at KAESER COMPRESSORS. In Digitalization Cases (pp. 101-117). Springer, Cham .......................................... 49
Staykova & Damsgaard, (2019). Dual-track’s Strategy for Incumbent’s Transformation: The Case of Danske
Bank Adopting a Platform Business Model. In Digitalization Cases (pp. 119-137). Springer, Cham. ............... 52
,Week 1: The evolution of industries/technologies and the Innovator’s
Dilemma
Tushman & Anderson (1986). Technological discontinuities and organizational
environments. Page 439-446
Abstract
This paper focuses on patterns of technological change and on the impact of technological
breakthroughs on environmental conditions. Using data from the minicomputer, cement, and airline
industries from their births through 1980, we demonstrate that technology evolves through periods
of incremental change punctuated by technological breakthroughs that either enhance or destroy
the competence of firms in an industry. These breakthroughs, or technological discontinuities,
significantly increase both environmental uncertainty and munificence. The study shows that while
competence-destroying discontinuities are initiated by new firms and are associated with increased
environmental turbulence, competence-enhancing discontinuities are initiated by existing firms and
are associated with decreased environmental turbulence. These effects decrease over successive
discontinuities. Those firms that initiate major technological changes grow more rapidly than other
firms.
Technology and Technological Discontinuities
Technology can be defined as those tools, devices, and knowledge that mediate between inputs and
outputs (process technology) and/or that create new products or services (product technology).
Technological change as an unequivocal impact on economic growth and on the development of
industries. Since technology has been taken as a given, there has been a conspicuous lack of clarity
concerning how and why technologies change and how technological change affects environmental
and/or organizational evolution. Technology seems to evolve in response to the interplay of history,
individuals, and market demand. Technological change is a function of both variety and chance as
well as structure and patterns.
A dominant design reflects the emergence of product-class standards and ends the period of
technological ferment. Alternative designs are largely crowded out of the product class, and
technological development focuses on elaborating a widely accepted product or process; the
dominant design becomes a guidepost for further product or process change. Once a dominant
design emerges, technological progress is driven by numerous, incremental innovations.
Major technological shifts can be classified as competence-destroying or competence-enhancing,
because they either destroy or enhance the competence of existing firms in an industry. The former
require new skills, abilities, and knowledge in both the development and production of the product.
A competence-destroying product discontinuity either creates a new product class (e.g., xerography
or automobiles) or substitutes for an existing product (e.g., diesel vs. steam locomotive; transistors
vs. vacuum tubes). Competence-destroying process discontinuities represent a new way of making a
given product. Competence-destroying discontinuities are so fundamentally different from
previously dominant technologies that the skills and knowledge base required to operate the core
technology shift. Competence-enhancing discontinuities are order-of-magnitude improvements in
price/performance that build on existing know-how within a product class. Technological
discontinuities trigger a period of technological ferment culminating in a dominant design, and
leading to the next period of incremental, competence-enhancing, technological change.
• Hypothesis 1: Technological change within a product class will be characterized by long
periods of incremental change punctuated by discontinuities.
, • Hypothesis 1a: Technological discontinuities are either competence enhancing (building on
existing skills and know-how) or competence-destroying (require fundamentally new skills
and competences).
Competence-destroying and competence-enhancing discontinuities dramatically alter previously
attainable price/performance relationships within a product class. Both create technological
uncertainty as firms struggle to master an untested and incompletely understood product or process.
Competence-destroying discontinuities disrupt industry structure. Competence-enhancing
discontinuities tend to consolidate industry leadership; the rich are likely to get richer. Competence-
destroying discontinuities, in contrast, disrupt industry structure. Skills that brought product-class
leaders to preeminence are rendered largely obsolete; new firms founded to exploit the new
technology will gain market share at the expense of organizations that, bound by traditions, sunk
costs, and internal political constraints, remain committed to outmoded technology.
• Hypothesis 2: The locus of innovation will differ for competence-destroying and competence
enhancing technological changes. Competence-destroying discontinuities will be initiated by
new entrants, while competence-enhancing discontinuities will be initiated by existing firms.
Technological Discontinuities and Organizational Environments
Uncertainty refers to the extent to which future states of the environment can be anticipated or
accurately predicted. Munificence refers to the extent to which an environment can support growth.
Environments with greater munificence impose fewer constraints on organizations than those
environments with resource constraints. Both competence-enhancing and competence-destroying
technological discontinuities generate uncertainty as firms struggle to master an incompletely
understood product or process. Technological breakthroughs trigger a period of technological
ferment, as new technologies are tried, and new markets open.
• Hypothesis 3: Competitive uncertainty will be higher after a technological discontinuity than
before the discontinuity.
Technological discontinuities drive sharp decrease in price-performance or input-output ratios. As
both competence-enhancing and competence-destroying discontinuities reflect major price-
performance improvements, both will be associated with increased demand and environmental
munificence.
• Hypothesis 4: Environmental munificence will be higher after a technological discontinuity
than before the discontinuity.
Competence-destroying discontinuities break the existing order. Barriers to entry are lowered, new
firms enter previously impenetrable markets by exploiting the new technology.
• Hypothesis 5: Competence-enhancing discontinuities will be associated with decreased
entry-to-exit ratios and decreased interfirm sales variability. These patterns will be reversed
for competence-destroying discontinuities.
If competence-destroying discontinuities do not emerge to alter a product class, successive
competence-enhancing discontinuities will result in increased environmental orderliness and
consolidation. Each competence-enhancing breakthrough builds on prior advances and further raises
barriers to entry and minimum scale requirements. The underlying resource base becomes more
limited by resource constraints. Successive competence-enhancing discontinuities will have smaller
impacts on uncertainty and munificence as successive advances further exploit a limited technology
and market-resource base.
• Hypothesis 6: Successive competence-enhancing discontinuities will be associated with
smaller increases in uncertainty and munificence.
