Differentiating Market Strategies

IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 49, NO. 4, NOVEMBER 2002

341

Differentiating Market Strategies for Disruptive Technologies

Steven T. Walsh, Member, IEEE, Bruce A. Kirchhoff, and Scott Newbert

Abstract—The literature is full of anecdotes that show new small firms attacking existing markets with innovations based upon disruptive technologies and achieving phenomenal success. Because of this, some theorists argue that disruptive technologies are best commercialized by new small firms. If this is true, can a logical rationale be developed that explains this unique capacity of new firms? If so, can empirical research of new and established firms in an industry fraught with a disruptive technology identify the advantages that new firms have over established firms in the commercialization process? The purpose of this paper is to examine the different roles of established and new firms in disruptive technology commercialization. The authors begin by developing a model of the innovation process beginning with technology creation and ending with user adoption and application. From this model they develop propositions for testing. The authors use survey data collected from 72 micro-electro-mechanical-systems (MEMS) manufacturing firms. Their results from the MEMS industry show that established firms rarely commercialize disruptive technologies and then prefer to use market-pull strategies to accomplish this. New firms select primarily disruptive technologies and choose either market-pull or technology-push strategies for commercialization. Perhaps more important, time to market for new firms is one-fourth that for established firms. These results suggest that new firms have two advantages in commercialization of disruptive technologies—flexibility in marketing strategy and much shorter times to market. Index Terms—Commercialization, disruptive technology, market strategies, new firms’ advantages, survey of MEMS industry managers, technology push...