Daniel E. Engler, College of Business, Illionois State University
Industrial and Corporate Change
Abstract: New markets segments are a common setting for studies in technology strategy. These studies generally assume that new segments already exist, or have formed following the introduction of a product innovation by an entering firm. Thus, theory on the role of established firms in the emergence of new market segments is underdeveloped. This study informs current research by explaining the product innovation decisions of established firms during the emergence of a new market segment. The results of a case study on the development and commercialization of the minivan at Chrysler, Ford, and General Motors between 1970 and 1985 indicate that existing theories based on managerial cognition, firm capabilities, economic incentives, and organizational structure are insufficient to explain the decisions. This article develops theory based on the interrelationship of these four mechanisms.