Responding to a Potentially Disruptive Technology: How Big Pharma Embraced Biotechnology. (August 2018)

• Record Type: Journal Article
• Authors: Birkinshaw, Julian; Visnjic, Ivanka; Best, Simon
• Is Part Of: California management review. Volume 60:Number 4(2018)
• Page Start: 74
• Page End: 100
• Publication Date: 2018-08
• Subjects: innovation -- organizational change -- strategic management -- disruptive technology -- disruptive innovation -- acquisitions -- pharmaceuticals; Industrial management -- Periodicals; Industrial management; Management; Bedrijfseconomie; Periodicals; 658.005
• DOI: 10.1177/0008125618778852
• Languages: English
• ISSNs: 0008-1256

Abstract

How do incumbent firms respond over time to a potentially disruptive technology? This article documents the strategies of 12 large pharmaceutical firms over 25 years as they addressed the opportunity/threat of biotechnology. All showed awareness of biotechnology's potential, but their response profiles varied dramatically in terms of timing (early/late) and focus (external/internal). Late movers mostly made large acquisitions to "catch up, " but early movers maintained their lead in terms of biotechnology-based drug sales and profitability, and those with a more "open" response profile performed better. This response involves a three-step process: building awareness (sensing), building capability (responding), and building commitment (scaling).