The Evolution of Digital Camera

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The Influence of Prior Industry Affiliation on Framing in Nascent Industries: The Evolution of Digital Cameras Mary J. Benner Mary Tripsas

Working Paper
11-007

Copyright © 2010 by Mary J. Benner and Mary Tripsas Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author.

The Influence of Prior Industry Affiliation on Framing in Nascent Industries: The Evolution of Digital Cameras

Mary J. Benner Department of Strategic Management and Organization 3-422 Carlson School of Management University of Minnesota 321-19th Avenue South Minneapolis, MN 55455 (612) 626-6660 mbenner@umn.edu

Mary Tripsas Harvard Business School 219 Rock Center, Soldiers Field Road Boston, MA 02163 (617) 495-8407 mtripsas@hbs.edu   November, 2010 Forthcoming, Strategic Management Journal  

The authors are listed alphabetically and contributed equally. The authors would like to thank Yaichi Aoshima, Juan Alcacer, Carliss Baldwin, Connie Helfat, Rebecca Henderson, Sarah Kaplan, Andrew King, Dan Levinthal, Cynthia Montgomery, Jan Rivkin, Lori Rosenkopf, Willy Shih, Harbir Singh, Bill Simpson, and Mike Tushman, members of the Harvard Business School Entrepreneurial Management and Technology and Operations Management units, and seminar participants from the Consortium on Cooperation and Competitiveness, Hitotsubachi University, Stanford SIEPR, the University of Michigan Ross School of Business, IESE, the University of Wisconsin at Madison, and the University of California at Irvine for their helpful comments. We would also like to thank Hagar Doitel, Margot Hollick, Tal Levy, Avanti Paranjpye, Jim Perry, and Victoria Song for research assistance.  

The Influence of Prior Industry Affiliation on Framing in Nascent Industries: The Evolution of Digital Cameras

Abstract

New industries sparked by technological change are characterized by high uncertainty. In this paper we explore how a firm's conceptualization of products in this context, as reflected by product feature choices, is influenced by prior industry affiliation. We study digital cameras introduced from 1991-2006 by firms from three prior industries. We hypothesize and find first, that prior industry experience shapes a set of shared beliefs resulting in similar and concurrent firm behavior, second, that firms notice and imitate the behaviors of firms from the same prior industry, and third, that as firms gain experience with particular features, the influence of prior industry decreases. This study extends previous research on firm entry into new domains by examining heterogeneity in firms' framing and feature-level entry choices.

Keywords: Technological change; Innovation; Industry evolution; Dominant designs, Managerial beliefs; Digital photography

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Introduction Firms entering a nascent product market face a context characterized by tremendous ambiguity and uncertainty, particularly when the new market is sparked by radical technological change. Potential customers have little or no experience with products, and their preferences are therefore unformed and unarticulated. Even basic assumptions about what the product is and how it should be used are subject to debate. Similarly, from a technological perspective, uncertainty exists about the rate of performance improvement of the new technology, how components of a technological system will interact, and whether different technological variants will work at all. Market and technological uncertainty are often compounded by competitive uncertainty as firms grapple with shifting industry boundaries and the convergence of firms from previously distinct domains. During this period of turbulence, firms experiment with alternative product configurations, functions, and technologies, with competing alternatives converging, in many cases, on what...
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