Direct and Indirect Effects of Product Portfolio on Firm Survival in the Worldwide Optical Disk Drive Industry, 1983-1999

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

This paper explores how two understudied characteristics of a firm's product portfolio, namely, aging of products and (non)innovativeness of products, affect firm survival. The influence of these product portfolio characteristics on organizational mortality can be observed both at the firm and at the industry levels. Paradoxically, the portfolio's influence at the firm and at the industry levels may go in opposite directions. Specifically, I predict that portfolios with aging products make their firms weaker competitors and survivors. However by weakening these firms, "aging" portfolios reduce competitive pressures at the industry level and, therefore, improve firm survival indirectly by changing industry vital rates. In contrast, firms with innovative product portfolios should be stronger survivors. At the same time, they are likely to intensify competition in the industry and, as a result, diminish survival chances of all firms, including those with innovative products. The analyses of all firms' product portfolios in the worldwide optical disk drive industry, 1983-1999, support these predictions.

Original languageEnglish (US)
Title of host publicationEcology and Strategy
EditorsJoel Baum, Stanislav Dobrev, Arjen Witteloostuijn
Pages591-630
Number of pages40
DOIs
StatePublished - 2006
Externally publishedYes

Publication series

NameAdvances in Strategic Management
Volume23
ISSN (Print)0742-3322

ASJC Scopus subject areas

  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management

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