Contemporary work on marketing management is grounded implicitly in a structural functionalist or contingency perspective of organizational functioning. However, the field of organizational behavio...

Organizational Culture and Marketing: Defining the Research Agenda:

A common perception in the field of innovation is that large, incumbent firms rarely introduce radical product innovations. Such firms tend to solidify their market positions with relatively incremental innovations. They may even turn away entrepreneurs who come up with radical innovations, though they themselves had such entrepreneurial roots. As a result, radical innovations tend to come from small firms, the outsiders. This thesis, which we term the incumbent's curse, is commonly accepted in academic and popular accounts of radical innovation. This topic is important, because radical product innovation is an engine of economic growth that has created entire industries and brought down giants while catapulting small firms to market leadership. Yet a review of the literature suggests that the evidence for the incumbent's curse is based on anecdotes and scattered case studies of highly specialized innovations. It is not clear if it applies widely across several product categories. The authors reexamine the incumbent's curse using a historical analysis of a relatively large number of radical innovations in the consumer durables and office products categories. In particular, the authors seek to answer the following questions: (1) How prevalent is this phenomenon? What percentage of radical innovations do incumbents versus nonincumbents introduce? What percentage of radical innovations do small firms versus large firms introduce? (2) Is the phenomenon a curse that invariably afflicts large incumbents in current industries? Is it driven by incumbency or size? and (3) How consistent is the phenomenon? Has the increasing size and complexity of firms over time accentuated it? Does it vary across national boundaries? Results from the study suggest that conventional wisdom about the incumbent's curse may not always be valid.

The Incumbent's Curse? Incumbency, Size and Radical Product Innovation

A common perception in the field of innovation is that large, incumbent firms rarely introduce radical product innovations. Such firms tend to solidify their market positions with relatively incremental innovations. They may even turn away entrepreneurs who come up with radical innovations, though they themselves had such entrepreneurial roots. As a result, radical innovations tend to come from small firms, the outsiders. This thesis, which we term the “incumbent’s curse,” is commonly accepted in academic and popular accounts of radical innovation. This topic is important, because radical product innovation is an engine of economic growth that has created entire industries and brought down giants while catapulting small firms to market leadership. Yet a review of the literature suggests that the evidence for the incumbent’s curse is based on anecdotes and scattered case studies of highly specialized innovations. It is not clear if it applies widely across several product categories. The authors r...

/pdf/the-incumbent-s-curse-incumbency-size-and-radical-product-5dfco0i7y6.pdf

The Incumbent's Curse? Incumbency, Size, and Radical Product Innovation

The evolution of relationship marketing

The author presents a framework for thinking about the impact of information and information technology on marketing. The focus is on the concept of “information” or “knowledge” as both an asset to...

Marketing in an Information-Intensive Environment: Strategic Implications of Knowledge as an Asset:

Why history in marketing? Historical research in marketing offers opportunities for charting our past and better understanding our present. The author formulates a suitable method for undertaking h...

Historical Research in Marketing

One of the most serious problems faced by the multinational retailer is the estimation of the structure of retail markets in the many countries that he might want to enter. While marketing scholars have developed methods for assessing market potentials and for evaluating economic and political conditions, they have not been as successful in solving the market entry problem as it relates to the development of retailing. There are a large number of models of retail change which can be applied to the process, however, they generally fall short of management desires. In the first place, these models are often based on hypotheses of retail change in the North American market. In the second place, many of the models have not been formally tested within that environment and few have been evaluated in the wider context. Finally, these models are not comparative and the use of them in comparative analysis would suffer from the absence of acceptable categories and data. One approach that might help the difficulties of market entry is to apply historical research methods to the problem of understanding change. These methods by their very nature embody the elements of comparative analysis and offer the added advantage of dealing with specific firms and events rather than concentrating on more aggregate categories. By focusing on specific retailers in a single country and across many countries the researcher can develop general propositions which are deductively arrived at in a systematic fashion rather than rely on chance observation of aggregate structure and behaviour. Historical research demands a new outlook and sensitivity in the observation of events and in the analysis of data. The skills required to undertake such research have direct benefits because they force the researcher clearly to define the elements of his study in a way not possible when statistical methods are employed. Will such research be the answer to all of the issues of multinational retailing? The answer is clearly no; however, it can help managers and marketing scholars better understand the process of change in the past. There is no certainty that the past will predict the future, but understanding the process of change might make the future more manageable; and, what better place is there to start than a historical perspective?

Ronald Savitt

Papers

Historical Research in Marketing

A Historical Approach to Comparative Retailing

Industry, prices and markets