This study aims to explore how managerial contextual factors influence incumbent firms' technology choice in betting on inferior technology trajectories when facing complementary assets discontinuity – a contingency that has not been widely explored in previous research. Based on a qualitative case study, this study specifically examines why Sharp Corporation (a major Japanese solar PV company) chose to bet on amorphous silicon thin-film solar cell technology in the early 2000s, despite the rising dominance of crystalline silicon (c-Si) solar cells.
This study utilized an inductive approach to examine the triggers underlying an incumbent firm’s strategic adaptation to complementary assets discontinuity. Data were collected from a wide range of sources, including: (1) company archives, business magazines, newspaper reports, technical handbooks and historical books, (2) archival interview data from business magazines and newspapers and (3) semi-structured interviews with industry experts.
The key findings revealed a “resource deployment trap,” where decisions to increase the overall portfolio of multiple products (in this case liquid crystal displays and thin-film solar cells) led to management decisions betting on technologies with lower technical performance.
This study makes two specific contributions. First, the findings provide an illustrative framework that reveals triggers potentially crucial in explaining incumbent firms’ adaptation strategy, thus answering the call for more investigation into the drivers and mechanisms of incumbent firms’ adaptation strategy following complementary assets discontinuity. Second, while prior research has argued that synergies based on resource redeployment could be a key mechanism in response to complementary assets discontinuity (Cozzolino and Verona, 2022), this study offers new empirical insights by revealing a “resource redeployment trap,” where the pursuit of synergies may lead to suboptimal technological choices toward inferior options.
