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

  • Michael A. Cusumano (a1), Yiorgos Mylonadis (a2) and Richard S. Rosenbloom (a3)
  • DOI: http://dx.doi.org/10.2307/3117053
  • Published online: 13 December 2011
Abstract

This article deals with the diffusion and standardization rivalry between two similar but incompatible formats for home videocassette recorders (VCRs): the Betamax, introduced in 1975 by the Sony Corporation, and the VHS (Video Home System), introduced in 1976 by the Victor Company of Japan (Japan Victor or JVC). Despite being first to the home market, the Beta format fell behind the VHS in market share during 1978 and declined thereafter. By the end of the 1980s, Sony and its partners had ceased producing Beta models. This study analyzes the history of this rivalry and examines its context—a mass consumer market with a dynamic standardization process subject to “bandwagon” effects that took years to unfold and that were largely shaped by the strategic maneuvering of the VHS producers.

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Marvin B. Lieberman and David B. Montgomery , “First–Mover Advantages,” Strategic Management Journal 9 (1988): 4158

Richard N. Foster , Innovation: The Attacker's Advantage (New York, 1986)

M. L. Katz and C. Shapiro , “Technology Adoption in the Presence of Network Externalities,” Journal of Political Economy 94 (1986): 822–41

Kim B. Clark , “The Interaction of Design Hierarchies and Market Concepts in Technological Evolution,” Research Policy 14 (1985): 235–51

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): 930

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