Sony's successful strategy for compact discs

An analysis of a competitive strategy integrating the hardware and software businesses in the electronics industry, particularly in the audio-visual field, is presented, which requires the paradoxinal strategy of pushing out competitors, while attracting them into the market.

Abstract

This article presents an analysis of a competitive strategy integrating the hardware and software businesses in the electronics industry, particularly in the audio-visual field. Hardware and software are tightly linked by a technical standard, the format. A new generation in formats provides a chance to restructure the competitive situation in the industry. However, to establish a dominant position, the new format originator must use the paradoxinal strategy of pushing out competitors, while attracting them into the market.