Short answer
For market leaders, focus on digital solutions that enhance existing strengths and processes (like e-buying). For more disruptive digital sales innovations, consider strategies that address the perceived risks and coordination costs for dominant firms.
- Field
- Innovation & Markets
- Source
- Industry Studies Working Papers (University of Pittsburgh) (2010)
- Method
- Empirical analysis of a large dataset.
- Sample
- 35,000 plants
- Evidence
- Strong effect
Market leaders in manufacturing are more inclined to adopt incremental e-business innovations like e-buying but are less likely to adopt more complex and strategically sensitive innovations such as e-selling. This innovation & markets research insight is drawn from a 2010 study published in Industry Studies Working Papers (University of Pittsburgh). Using Empirical analysis of a large dataset. with 35,000 plants, researchers explored how this design variable affects real-world outcomes. The key design takeaway: For market leaders, focus on digital solutions that enhance existing strengths and processes (like e-buying). For more disruptive digital sales innovations, consider strategies that address the perceived risks and coordination costs for dominant firms.
Market Leaders Hesitate on E-Selling, Embrace E-Buying
Market leaders in manufacturing are more inclined to adopt incremental e-business innovations like e-buying but are less likely to adopt more complex and strategically sensitive innovations such as e-selling.
Industry Studies Working Papers (University of Pittsburgh) · 2010
Key Findings
- 01Market leaders were significantly more likely to adopt e-buying, an incremental innovation.
- 02Market leaders were significantly less likely to adopt e-selling, a more complex and strategically sensitive innovation.
- 03These patterns held across a wide range of industries, even after controlling for factors like productivity and technological capabilities.
Application
Design takeaway
For market leaders, focus on digital solutions that enhance existing strengths and processes (like e-buying). For more disruptive digital sales innovations, consider strategies that address the perceived risks and coordination costs for dominant firms.
How to apply
When designing a new e-commerce platform or digital supply chain solution, analyze the target market segments' market leadership and tailor the value proposition to address their propensity for incremental versus radical adoption.
Project actions
- 01When researching a new product or service, consider how a company's current market standing might affect their willingness to adopt it.
- 02Think about whether your design is an 'e-buying' type of improvement (easier, builds on existing) or an 'e-selling' type (more complex, potentially disruptive).
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Large, comprehensive dataset covering numerous plants and industries.
- +Distinguishes between different types of innovation (incremental vs. radical) within e-business.
Limitations
The study's findings are specific to e-business adoption during a particular technological era and may not apply to all types of innovations or industries today.
Reliability & validity
The study's robustness across industries and control for key variables suggests good external validity. The large sample size enhances statistical reliability.
Think critically
How might the 'co-invention and coordination costs' mentioned in the study manifest in the design and implementation of a new digital product for a market leader?
Design Principles
"Innovation adoption is influenced by a firm's strategic position and the nature of the innovation itself; incremental innovations are more readily adopted by market leaders than radical ones."
Understanding how market position influences the adoption of new business processes is crucial for strategic planning and innovation management. This insight highlights that not all digital innovations are adopted uniformly, and a firm's existing market dominance can create both opportunities and barriers.
What This Means for Your Design
Big companies that are already leaders in their market tend to adopt new online buying tools easily, but they are slower to adopt new online selling tools because it's more complicated and could mess with their current success.
How to use in your project
- 1.Reference this research when discussing the market adoption potential of your design, particularly if it involves digital business processes.
- 2.Use it to justify why certain features might be more readily accepted by established companies.
Add to My Project
Quick Cite
Paragraph starter
Research indicates that market leaders often adopt incremental innovations more readily than radical ones. For instance, in the context of e-business, firms with significant market share were found to be more likely to adopt e-buying processes but less likely to adopt e-selling processes due to the latter's complexity and strategic sensitivity. This suggests that when designing for established market players, solutions that enhance existing strengths are more likely to be adopted than those requiring significant strategic shifts.
Source
Industry Studies Working Papers (University of Pittsburgh)
The Effect of Market Leadership in Business Process Innovation: The Case(s) of E-Business Adoption
journal · 2010
View sourceQuestions About This Research
- What does the research say about market leaders hesitate on e-selling, embrace e-buying?
- For market leaders, focus on digital solutions that enhance existing strengths and processes (like e-buying). For more disruptive digital sales innovations, consider strategies that address the perceived risks and coordination costs for dominant firms. Evidence: Industry Studies Working Papers (University of Pittsburgh) (2010).
- Why does "Market Leaders Hesitate on E-Selling, Embrace E-Buying" matter for design?
- Understanding how market position influences the adoption of new business processes is crucial for strategic planning and innovation management. This insight highlights that not all digital innovations are adopted uniformly, and a firm's existing market dominance can create both opportunities and barriers.
- How can designers apply this research?
- For market leaders, focus on digital solutions that enhance existing strengths and processes (like e-buying). For more disruptive digital sales innovations, consider strategies that address the perceived risks and coordination costs for dominant firms.
- What were the main findings?
- Market leaders were significantly more likely to adopt e-buying, an incremental innovation.. Market leaders were significantly less likely to adopt e-selling, a more complex and strategically sensitive innovation.. These patterns held across a wide range of industries, even after controlling for factors like productivity and technological capabilities.
- What research method was used?
- Empirical analysis of a large dataset. with 35,000 plants.
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2010 journal from Industry Studies Working Papers (University of Pittsburgh).
- What should I do differently in my next project?
- When designing a new e-commerce platform or digital supply chain solution, analyze the target market segments' market leadership and tailor the value proposition to address their propensity for incremental versus radical adoption.
- What are the limitations?
- The study focuses on a specific historical period (early internet diffusion) and may not fully capture current dynamics of digital innovation adoption.