Access to Capital Essay Example

technology, distinguishing companies with impressive records of innovation from those without.

Although prioritizing innovation may lead to the loss of value in existing specialized investments, innovative organizations still pursue it even if it means cannibalizing their current investments. In contrast, non-innovative organizations are hesitant to do so. Companies that heavily invest in specialized technology become less willing to cannibalize these investments and this applies particularly to large, established organizations in a product market that have invested significantly in older product technologies. Consequently, such firms are generally less inclined towards innovation when all other factors are held constant.

It is not necessarily true that established companies with specialized technology and outdated methods will fail. Research indicates that these companies can overcome their resistance to change by incorporating three crucial organizational elements: 1) vibrant inner markets, 2) influential product champions, and 3) foresight into future market demands. Thriving inner markets promote autonomy among business unit managers and encourage competition between units. Companies with influential product champions have systems that support the efforts of those champions.

According to Crespi (2004), companies that prioritize future market research and decision-making focus on potential customers and competitors rather than existing ones. Larger firms with this approach are not afraid to cannibalize, despite having significant investments in specialized areas. These findings challenge common beliefs about organizational size, core competencies, synergy, and cannibalization.