Title: Preconditions, windows of opportunity and innovation strategies: Successive leadership changes in the regional jet industry
Citation: RESEARCH POLICY vol. 46 no. 2 p. 388-403
Publication Year: 2016
JRC N°: JRC103258
ISSN: 0048-7333
URI: http://www.sciencedirect.com/science/article/pii/S0048733316301457
DOI: 10.1016/j.respol.2016.09.011
Type: Articles in periodicals and books
Abstract: We analyse the dri­vers of two suc­ces­sive lead­er­ship changes in the re­gional, or mid-sized jet mar­ket, a par­tic­u­larly dy­namic seg­ment of the com­mer­cial air­craft in­dus­try. In the first in­stance, Bom­bardier, a Cana­dian new­comer, as­sumed lead­er­ship over the in­cum­bents, BAe and Fokker, in 1995. In 2005, the Brazil­ian firm, Em­braer, be­came the mar­ket leader in terms of num­ber of re­gional jet de­liv­er­ies. Our the­o­ret­i­cal frame­work con­sid­ers dis­con­ti­nu­ities in the build­ing blocks of sec­toral in­no­va­tion sys­tems as win­dows of op­por­tu­nity for which chal­lenger firms can de­vise strate­gic re­sponses al­low­ing them to as­sume mar­ket lead­er­ship. It also con­sid­ers pre­con­di­tions as nec­es­sary ca­pa­bil­i­ties lim­it­ing the num­ber of po­ten­tial chal­lenger com­pa­nies. The analy­sis of lead­er­ship change shows that more ef­fi­cient en­gines and tech­no­log­i­cal im­prove­ments in sub­sys­tems, chang­ing oil prices, busi­ness cy­cles, lib­er­al­iza­tion of air trans­port ser­vices, scope clauses and gov­ern­ment in­ter­ven­tions pro­vided tech­no­log­i­cal, de­mand and reg­u­la­tory win­dows of op­por­tu­nity. Launch­ing new air­craft fam­i­lies (an ar­chi­tec­tural in­no­va­tion), tar­get­ing the 50- and the 100–120-seat niche mar­kets gave first Bom­bardier’s CRJ fam­ily and later Em­braer’s E-Jet fam­ily the lead­er­ship. The fate of failed chal­lengers and in­cum­bents point to the im­por­tance of in­cum­bent traps, tech­no­log­i­cal and fi­nan­cial ca­pa­bil­i­ties, the tim­ing of win­dows of op­por­tu­nity, speedy strate­gic re­sponse, a proper eval­u­a­tion of fu­ture de­mand and sheer luck, as long lead times and sunk costs en­trap in­cum­bents and other in­ad­e­quately re­spond­ing com­pa­nies.
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