Mary J. Benner (University of Minnesota) and Mary Tripsas (Harvard Business School)
Harvard Business School, Working Paper No. 11-007
The authors of this study analyzed the emergence of digital cameras to explore whether companies rely on their own prior efforts to introduce new products and how they gradually arrive at a standard set of features. The researchers chose this product because in its initial stages of development there were high levels of uncertainty about what the digital camera should do and what it should look like, and it has evolved greatly since its debut.
The nascent digital camera market was dominated by firms from three industries: photography (consisting of analog camera or film producers), computers (makers of PCs, components, and software), and consumer electronics (camcorder, TV, and stereo manufacturers). Utilizing data that included the entry date and features of all 682 mass-consumer digital cameras introduced by 83 different firms in the United States from the product’s inception in 1991 through 2006, the researchers compared the influence of a company’s background with its decisions about which features were most important in a digital camera. The researchers tracked several features that would come to define the typical model today, including LCD display, optical zoom lens, video capability, high resolution, editing capabilities, and removable storage.
The authors found that firms sharing an industry background held similar beliefs about the most valuable features and were also more likely to imitate one another’s behavior, generally introducing new versions of the cameras around the same time. For example, photography firms initially conceptualized digital cameras as similar to analog point-and-shoots. Reflecting their photo-centric heritage, they were the first to introduce high resolution, optical zoom, and removable storage. But it wasn’t until 2001 that half of the photography firms offered the ability to make short movies; in contrast, consumer electronics companies, with their experience in manufacturing handheld video recorders, introduced this feature two years earlier and also led the way on LCD screens. Computer makers largely viewed the first digital cameras as extensions of the PC, introducing editing software and webcam capabilities, but they lagged on resolution, optical zoom, and movie capabilities. However, as these companies grew more comfortable with specific features new to them, their reliance on their prior products decreased and innovation flourished, the authors found.
Firms introducing new products rely on their previous experiences to guide them in initial development and conceptualization. Over time, as companies grow more familiar with the new product’s most appealing features, the influence of the past fades.