Based on the Timothy Bresnahan, Shane Greenstein, and Rebecca Henderson’s article Schumpeterian Competition and Diseconomies of Scope, the authors suggest that in the past, the incumbent and successful firms fail in new markets due to the strategies they use in these markets. Other suggestions in this article include the fact that the organization frames of these big firms have been unable to flex appropriately for the new era in technology due to their fixed nature. Additionally, it is suggested that, the fear of cannibalization coupled with the underinvestment could also be a source of failure in these incumbent firms. ...
Bursts Critical Thinkings Samples For Students
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The article of Schumpeterian Competition and Diseconomies of Scope suggests that in the past, the incumbent and otherwise successful firms fail in a new market is because of the strategies that they use in the market. Some assert that the framers of these big companies are rigid to changes in technology, which at times make them irrelevant to the dynamism in business. Others still consider the fear of cannibalization coupled with underinvestment as the reason for failure. However, the waves of innovative technology and activity threaten the existence of several big and small firms despite of their size or market ...