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Abstract:
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This thesis draws upon theory from strategy management theory. More specifically it draws
upon strategic position and dynamics theory. It applies a strategy oriented perspective to define
current and new industries and narrow in their boundaries. The thesis theoretical foundation is
build upon industry dynamics theory combined with theories on sustaining competitive
advantage in network economies.
The thesis constructs an managerial model based upon the above mentioned theories. The model
can be used to measure and evaluate an industry’s evolutionary trajectory and to align the
industry’s assets and activities to the phases of industry convergence by creating new value in
form of partnerships, standards and complementors.
The managerial model is then used for an real industry analysis on the incumbent physical disc
based digital video player industry and the emerging industry of digital media players to
understand if the model can be of use in a real world setting.
The analysis based on the model concludes that the firms in the incumbent industry are facing
threats to their core assets and core activities from IT hardware firms. These companies that are
emerging are offering digital media players that are based upon non physical discs which in
some aspects offer better performance than the incumbent industry’s products. The incumbent
are under threat of being substituted by the new products that cater to the same demand, but the
products are coming from other the emerging industry with uses different buyers, suppliers and
complementors. Thus, the companies are seeing that their industry current assets and activities
are being threatened by the other industry’s emergence. This changes their industry evolution to
be on a radical trajectory where the stage of evolution in it’s convergence phase.
The analysis concludes that it is most urgent that firms in the incumbent industries validate their
current industry evolution and use the findings from the analysis to align their assets and
activities and creating the necessary partnerships and complements with other firms in order to
stay competitive in the future. |
