In 1975 electronics giant Sony Corporation introduced the Betamax, the first consumer video cassette recorder. It packed state-of-the-art technology and represented Sony’s bet to dominate the segment. Late in 1976 Victor Company of Japan, also known as JVC, brought to the market a rival technology called VHS, inferior to Betamax under most technical parameters. Ten years later, 1988, Betamax is out of the market, VHS becomes the winning standard for video recording. Sony Corporation decides to start producing its own VCRs using VHS technology.
Stories like this one have always fascinated me. By better understanding the dynamics of innovation and by using cleverly crafted strategies David JVC was able to knock out Goliath Sony. The information age is changing competition in most industries. Often times more important than being the first to market is to become the dominant design. More important than internal capabilities and financial resources is the ability to manage complex networks of actors. More important than superior technology is the speed at which a company evolves its products.
Innovation Zen is a blog revolving around my professional interests:
- Innovation Management
- Business Strategy
- Competition in High-Tech Sectors