Strategic Maneuvering and Mass-Market Dynamics: The Triumph of VHS over Beta

Business History Review

Volumn 66, Issue 1, 1992, Pages 51-94

  Rosenbloom, Richard S ^c   Mylonadis, Yiorgos ^b  

^a MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^b UNIVERSITY OF PENNSYLVANIA   (United States)

^c HARVARD BUSINESS SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84972363279     PISSN: 00076805     EISSN: 2044768X     Source Type: Journal    
DOI: 10.2307/3117053     Document Type: Article

References (49)

1. Michael L. Dertouzos, Richard K. Lester, and Robert M. Solow, Made in America: Regaining the Productivity Edge (Cambridge, Mass., 1989), 216–18.
2. In English see, for example, James Lardner, Fast Forward: Hollywood, the Japanese, and the VCR Wars (New York, 1987); and P. Ranganath Nayak and John M. Ket-teringham, Breakthroughs! (New York, 1986); in Japanese see, for example, Nihon Keizai Shimbunsha, ed., Gekitotsu: Soni tai Matsushita: bideo ni kakeru soryokusen [Crash! Sony versus Matsushita: the all-out war wagered on video] (Tokyo, 1978); and Itami Hiroyuki, Nihon no VTR sangyo: naze sekai o seiha dekita no ka [Japan’s VTR industry: why it was able to dominate the world] (Tokyo, 1989).
3. Marvin B. Lieberman and David B. Montgomery, “First-Mover Advantages,” Strategic Management Journal 9 (1988): 41–58; and Michael A. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York, 1985), 186–89.
4. For discussions of these cases, see Richard S. Rosenbloom and Karen J. Freeze, “Ampex Corporation and Video Innovation,” in Research on Technological Innovation, Management, and Policy, ed. R. S. Rosenbloom (Greenwich, Conn., 1985), 2: 113–86; Franklin M. Fisher, James W. McKie, and Richard B. Mancke, IBM and the U.S. Data Processing Industry: An Economic History (New York, 1983); and Gary Jacobson and John Hilkirk, Xerox: American Samurai (New York, 1986).
5. This definition of “first movers” is used in Alfred D. Chandler, Jr., Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990).
6. Richard S. Rosenbloom and Michael A. Cusumano, “Technological Pioneering and Competitive Advantage: The Birth of the VCR Industry,” California Management Review 1, 4 (1987): 51–76.
7. David J. Teece, “Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy,” in The Competitive Challenge, ed. David J. Teece (Cambridge, Mass., 1987), 185–219.
8. Lieberman and Montgomery, “First-Mover Advantages”; Porter, Competitive Advantage; and Richard N. Foster, Innovation: The Attacker’s Advantage (New York, 1986).
9. See, for example, M. L. Katz and C. Shapiro, “Technology Adoption in the Presence of Network Externalities,” Journal of Political Economy 94 (1986): 822–41; J. Farrell and G. Saloner, “Installed Base and Compatibility: Innovation, Product Preannouncements, and Prédation,” American Economics Review 76 (1986): 940–55; and W. Brian Arthur, “Positive Feedbacks in the Economy,” Scientific American, Feb. 1990, 92–99.
10. See Rosenbloom and Cusumano, “Technological Pioneering and Competitive Advantage,” and Rosenbloom and Freeze, “Ampex Corporation and Video Innovation.”
11. Useful discussions of the concept of a dominant design as well as “architectural” variations, which seem to describe VHS and Beta as refinements of the U-Matic, can be found in Kim B. Clark, “The Interaction of Design Hierarchies and Market Concepts in Technological Evolution,” Research Policy 14 (1985): 235–51; and Rebecca M. Henderson and Kim B. Clark, “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly 35 (1990): 9–30.
12. Nihon Keizai Shimbunsha, ed., Gekitotsu; and Rosenbloom and Cusumano, “Technological Pioneering and Competitive Advantage.”
13. Nihon Keizai Shimbunsha, ed., Gekitotsu; Nomura Management School, “VTR Sangyo noto” [VTR industry note] (Tokyo, 1984); and Richard S. Rosenbloom interviews with Nobutoshi Kihara and Masaaki Morita, Senior Managing Directors, Sony Corporation, July 1980.
14. Rosenbloom and Freeze, “Ampex Corporation and Video Innovation.”
15. Katz and Shapiro, “Technology Adoption in the Presence of Network Externalities.”
16. Arthur, “Positive Feedbacks in the Economy. ”
17. Nihon Keizai Shimbunsha, ed., Gekitotsu, 151–54.
18. Aldo Monta, Made in Japan (New York, 1986).
19. Nick Lyons, The Sony Vision (New York, 1976).
20. Lardner, Fast Forward, 84; and TV Digest, 21 April 1975.
21. Nihon Keizai Shimbunsha, ed., Gekitotsu, 13–17.
22. Nayak and Ketteringham, Breakthroughs, 37–38.
23. Nihon Keizai Shimbunsha, ed., Gekitotsu, 33–34; Lardner, Fast Forward, 156.
24. Quoted in TV Digest, 16 Feb. 1976.
25. Yoichi Yokomizo, “VCR Industry and Sony” (MS Thesis, MIT, Sloan School of Management, 1986), 79–80.
26. Nihon Keizai Shimbunsha, ed., Gekitotsu, 59–72.
27. See Appendix A and Tables 5, 6, and 3; Nayak and Ketteringham, Breakthroughs, 42; Nomura Management School, “VTR Sangyo noto”; and “Innovations Spur Boom in VCR Sales,” The New York Times, 11 Dec. 1984, D1.
28. Nihon Keizai Shimbunsha, ed., Gekitotsu, 54.
29. JVC committed to supplying Hitachi on an OEM basis although this entailed that a large portion of its production capacity of about 2,000–3,000 units per month would be diverted to that end. This portion would have been significantly smaller for Sony, which, at the time, had a production capacity of more than 7,000 units per month. See Nomura Management School, “VTR Sangyo noto”; and TV Digest, 21 April 1975 and 13 Dec. 1976.
30. Nayak and Ketteringham, Breakthroughs, 46. *In spring 1984, Zenith switched from the Beta group to VHS. Source: Nomura Management School, “VTR Sangyo noto”; and JVC, Public Relations Dept.
31. Nayak and Ketteringham, Breakthroughs. 32–33; also, Gozu interview.
32. Lardner, Fast Forward, 148–49.
33. Alan Cawson et al., Hostile Brothers: Competition and Closure in the European Electronics Industry (New York, 1990).
34. “VCRs: Coming on Strong,” Time, 24 Dec. 1984, 48; “Selecting the First VCR Some Questions to Keep in Mind,” The New York Times, 18 Dec. 1983, H38; Tony Hoffman, “How to Buy a VCR,” Home Video, April 1981, 48–55.
35. Nihon Keizai Shimbunsha, ed., Gekitotsu; Yanagida Kunio, “VHS kaihatsu dokyumento” [Documentation of VHS development], Shukan gendo. May 1980; Richard S. Rosenbloom interviews with Nobutoshi Kihara and Masaaki Morita, Senior Managing Directors, Masaru Ibuka, Honorary Chairman, and Akio Morita, Chairman, Sony Corporation, July 1980.
36. Rosenbloom and Cusumano, “Technological Pioneering and Competitive Advantage”; Rosenbloom and Freeze, “Ampex Corporation and Video Innovation”; and Margaret B. W. Graham, RCA & the VideoDisc: The Business of Research (New York, 1986).
37. Nomura Management School, “VTR Sangyo noto,” 4.
38. Nihon Keizai Shimbunsha, ed., Gekitotsu, 21–24, 54; Lardner, Fast Forward, 159.
39. Yokomizo, “VCR Industry and Sony,” 39–40.
40. TV Digest, 4 April 1977.
41. Itami, Nihon no VTR sangyo.
42. Lardner, Fast Forward, 161–63; Nayak and Ketteringham, Breakthroughs! 47.
43. TV Digest, 11 July 1979.
44. Bruce C. Klopfenstein, “Forecasting the Market for Home Video Players: A Retrospective Analysis” (Ph.D. diss., Ohio State University, 1985).
45. TV Digest, 9 Sept., 16 Oct. 1978, 12 April 1979.
46. Klopfenstein, “Forecasting the Market for Home Video Players,” 141.
47. Richard S. Rosenbloom, personal interviews at RCA, 1982.
48. TV Digest, 6 Oct. 1980.
49. The Wall Street Journal, 21 April 1986, 20D.