| The rapid pace of technology has increased the frequency of radical innovations today. These innovations can drastically change the fortunes of firms, weakening or destroying giants, encouraging new entrants, and promoting new market leaders. This dissertation examines the causes of radical product innovation in firms. It suggests that the key determinant that separates radical innovators is the willingness of these firms to cannibalize their own investments. As firms build more specialized investments, i.e., investments whose value is strongly tied to a particular product technology, they tend to become less willing to cannibalize. However, three organizational factors help firms overcome unwillingness to cannibalize. These are: active internal markets, strong product champion roles, and a focus on future markets. A survey of 194 managers in three high technology industries confirms the key propositions in the dissertation. Results from the survey suggest a need to reconsider conventional wisdom on cannibalization, firm size, core competencies, and organizational synergy. |
