Facing the uncertain environment from technological discontinuities: hedging as a technology strategy

Using the personal computer industry as a case study, this research shows that firms are most likely to hedge prior to the emergence of a dominant design, hedging is related to increased survival rates, and hedging are related to higher market share.

Abstract

Emerging markets are prone to technological uncertainty. Several approaches have been proposed as possible strategies for dealing with these uncertainties. The implications of adopting a hedging strategy are investigated in an industry where a dominant design has yet to emerge. Using the personal computer (PC) industry as a case study, this research shows that (1) firms are most likely to hedge prior to the emergence of a dominant design, (2) hedging is related to increased survival rates, and (3) hedging is related to higher market share.