Disruptive innovation: Incumbent’s response to innovation threat

Marcin Penconek and Stefano Pagliarani
Additional contact information
Marcin Penconek: University of Warsaw, Faculty of Psychology

No 2025-04, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: The theory of disruptive innovation has gained significant interest from the academic and business communities, investigating the reasons for inadequate or delayed responses of incumbents to innovation which challenges their established markets. Inadequate responses were explained by the concept of innovator’s dilemma, which postulates how incumbents tend to satisfy their consumers on the established markets, while overlooking opportunities with other consumers. However, the optimal incumbents’ response to disruptive innovation in the normative sense has not been researched. We investigate the choice of the payoff-maximizing strategy in response to the observed market disruption as a choice between different management approaches. Our study shows the importance of the speed of innovation adoption for the choice of the optimal response to innovation. We also show that the response can be delayed in some cases, reflecting the exploitation-exploration dilemma. This new insight complements the reasons of delayed response to disruptive innovation threats.

Keywords: Innovation; Incumbent; Management strategy (search for similar items in EconPapers)
JEL-codes: D21 D81 L19 O33 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2025
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.wne.uw.edu.pl/download_file/5266/0 First version, 2025 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2025-04

Access Statistics for this paper

More papers in Working Papers from Faculty of Economic Sciences, University of Warsaw Contact information at EDIRC.
Bibliographic data for series maintained by Marcin Bąba (mbaba@wne.uw.edu.pl).