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The heterogeneity of incumbents' perceptions and response strategies in the face of potential disruptions

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PurposeThis paper aims to study how three incumbent mobile network operators (MNOs) in Germany forecasted, framed and responded in terms of their strategy to the emergence of the wireless local area network technology (W-LAN) and how they interpreted this potential technological disruption in their own strategic context. Design/methodology/approachDrawing on empirical evidence from case studies conducted with these three major MNOs in Germany using the theoretical framework of disruptive technology, the results were then evaluated in a cross-case analysis to study how these firms interpreted and reacted to the potential disruptiveness of W-LAN. To meet this objective, an explorative, multiple and holistic case study design was utilized. Data was collected by the combination of information gained through semi-structured interviews with key informants and background information that were publicly available. Interviews were conducted with company representatives using a semi-structured interview guide. Information gathered from the interview, documentation and direct observations was transposed into a content analysis framework to enable easy analysis of the information gathered for each company. FindingsAs a result, significant differences for the respective MNOs between their perception of W-LAN as a potential disruptive technology, their strategic development processes inside the organisation to understand the potential impact of W-LAN on their respective business model, and to enforce an appropriate response strategy and structural implementation were identified. The results indicated that corporate representatives from each incumbent interpreted potentially disruptive technologies like W-LAN from a different perspective and direction depending primarily on the strategic and structural context and their organisation's resources, processes, and values. The findings also identified that practitioners inside the organisation were aware about the disruptive technology concept but however did not react in accordance with the theory. Forecasting results and categorisation that prove wrong can still lead to taking the right action since it seems to provide better results than non-forecasting and inactivity due to a lack of awareness of potential risks. Research limitations/implicationsBecause of the chosen research approach, the research results may lack generalisation and need to be further studied in a larger number of cases with different technologies and industries. Social implicationsFor managers and forecasters the study indicates that they should consider the impact of the heterogeneity in firms when formulating a response strategy based on their respective perception of the impact of a potential disruptive technology on their business. They should also be considerate about the consistency between their motivation to respond, the strategic development processes inside their organisation supporting the development of the response strategy and the subsequent structural implementation. Threat-framing seemed to be a key factor in unlocking resources even in the face of sustaining technological change and can be activated by threatening forecasts. Originality/valueThe consideration of incumbent heterogeneity in different framing settings and the resulting innovation categorisation with respect to the organisational actions and outcomes was not studied before.
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Keywords: Communication technologies; Forecasting; Innovation; Mobile communication systems; Strategic management; Technology-led strategy

Document Type: Research Article

Publication date: 2011-08-30

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