CHAPTER OUTLINE CASE 1 Timex and the Electronic Revolution CASE 2 Eastman Kodak and Digital Photography Introduction New Developments Affecting Competitive Advantage New Technology New Distribution Channels Economic Shifts Changes in Related or Neighboring Industries Government Regulation Response Options Prospecting Defending Harvesting Generic Change Situations Magnitude of Threat Ability to Adjust Common Change Situations Uncertainty Impact of Environmental Development Ability to Adjust Ethical Dimension Risk Preference Return Preference Summary Exercises and Discussion Questions . | strategie management CHAPTER OUTLINE CASE 1 Timex and the Electronic Revolution CASE 2 Eastman Kodak and Digital Photography Introduction New Developments Affecting Competitive Advantage New Technology New Distribution Channels Economic Shifts Changes in Related or Neighboring Industries Government Regulation Response Options Prospecting Defending Harvesting Generic Change Situations Magnitude of Threat Ability to Adjust Common Change Situations Uncertainty Impact of Environmental Development Ability to Adjust Ethical Dimension Risk Preference Return Preference Summary Exercises and Discussion Questions Shifts in Competitive Advantage Responding to Environmental Change WHAT YOU WILL LEARN How and why a firm s competitive advantage can change over time Some important sources or triggers of change Strategies that firms can undertake to respond to change 133 134 PART 1 Building Competitive Advantage Case 1 Timex and the Electronic Revolution1 During the 1950s and 1960s Timex became the largest manufacturer of watches in the world. It experienced phenomenal success. By 1970 one of every two watches sold in the United States was a Timex product. The company was rapidly increasing its market share abroad. Yet by the mid-1990s the name most people associate with watches designed for the broad market in the United States tends to be Seiko Citizen Pulsar Accutron or Swatch and not so much a Timex as in times past. What happened in the watch industry during the 1970s both in the United States and abroad Despite the company s initially impressive record Timex s long-term competitive advantage was not assured. One development that arose with full force during the early 1980s in particular threatened the company s continued prosperity. Electronic watches were beginning to appear on the market. While still expensive more than 200 apiece in 1970 versus 20 to 30 for the typical Timex watch electronic watches underwent rapid price declines throughout the late 1970s and early 1980s
