Group №4 MITIM students: Anastasia Loseva, Anna Kichigina, Viсtoria Tikhonova

 General description of the survey;  Young industries and technological threats;  Strategies of participation connected with timing of entry, magnitude of commitments, degree of organizational separation, competitive strategy for the new business;  Avoiding pitfalls.

 the goal - highlighting the problems of entering young industries and giving recommendations for avoiding them;  twenty-seven leading “threatened firms” from 8 young industries were analyzed;  secondary data was used: annual reports, business articles, industry surveys, stock reports;

 new entrants can be a substitution threat for successful companies from established industries;  to determine technological threats, firms should evaluate the new technology;  the main difference between established & young industries was dynamic nature of companies' competitive positions;  the periods of “introduction” and “rapid growth” were analyzed because of high levels of uncertainty and risk.

 different strategies were used by companies, depending on the vision of competition;  companies had to cope with the rapid rates of permanent changes in production methods;  strong R&D department and financial capabilities were needed;  new industries required new technical resources and skills.

 risks of early entry:  rejection or less acceptance of a new product;  usage of unproven technologies;  speed of market acceptance;  lack of transparence of requirements for success.  Results of survey:  21 companies out of 27 entered the market earlier;  8 of the 21 companies were unsuccessful at the beginning;  2 of 8 achieved success within 1 year;  other 6 firms – in more than 9 years;  the mistake was mostly in overestimating R&D potential.

 types of behavior at the stage of entrance:  limited early investments  major early investments: long-term success and strong competitive position; unprofitability;  Results of survey:  24 of 27 companies made substantial investment over time  only 4 did it aggressively from the start  other 20 made limited investments and wait

 established organization for the new product:  advantages: cost savings and existence of skillful executives  disadvantage: total difference between traditional and new technologies → the failure of the company  Results of survey:  the tendency of usage close organizational linkages

 companies that were historically successful usually use the same approach in the new field  less success because of:  new product concept  seldom creation of the new design  slow reaction to the implications

1.Early entrance: -technical obstacles -difficulty in developing necessary competences Management should pay attention to: -the rate of patience and will -close work with early consumers -continuing investments 2. Limited initial commitment ↓ the position left behind aggressive investors Management should assess the impact of: -R&D strength -financial capabilities -entry less competitive markets

3. Established close organizational linkages An independent unit Managers should take into account: -administrative system and culture -the problem of divided loyalties -the importance of high level of support and protection 4. The problem of using old strategy for the new field Managers should: -understand the need of another strategy and product concept -monitor other participants' approaches to improve own competitive position