This is to help my fiancee with an interview she has coming up.
She’s looking for a real-world business example of the following…
The market has long been dominated by a single company. The product is flawed but since it’s the only thing available, it’s widely used. A new product is introduced which is superior to the other one, and is actually cheaper. The current users of the old product are reluctant to change, even though they see the benefits/advantages of the old product. Basically the fear of the unknown is what’s stopping people from changing over.
Are there any recent examples of a company in such a situation successfully grabbing a share of the market and getting those people that were afraid to change to end up embracing the new product?
Hopefully this makes sense. I can clarify further if needed.
Avinash Dixit and Barry Nalebuff address constellations like this in a chapter of their (generally very recommendable) introductory book on game theory, Thinking Strategically, although they refer to products or technologies in general, not specific companies. One example they name for it is the QWERTY keyboard which is common in the English-speaking world. Several other keyboard layouts have been developed which allow faster typing than QWERTY, but none of them ever caught on.
Another example they mention is the light water type of building nuclear reactors. This technology is the only one used in American power plants, because it gained an edge on the markte early on in the nuclear age (late 1940s). Another reactor type, the heavy water reactor, is not used in the U.S. at all, although it has advantages.
They also speculate about what would have happened if steam technology had caught on as the leading type of engine to drive cars, not the internal combustion engine. They add that some engineers think steam would have been preferable, but now we’re stuck with internal combustion.
How about the metric system?
Convenient, easy, simple to use. Just makes sense all around.
But the US won’t change because of fear of change and lazy to change.
MS Windows vs Mac OS comes to mind. While few would argue that Vista is better than OS 10 there are few companies willing to make the change. They typically have too much invested in Windows compatible products to move to another operating system…
Would migration to new music and video formats count? VCR tapes, for instance, had many problems, including no random access, proclivity to breaking, and bulkiness.
But I wouldn’t just say that resistance to change is fear of the unknown. People with an old product have a lot invested in it, and sometimes change is expensive. Switching from records to CDs meant buying new copies of a lot of stuff. In my experience new versions of operating systems and tools don’t get used for a long time after they are introduced, because testing to make sure they don’t break anything is time consuming and expensive. The proponents of a new thing sometimes say resistance to change is from fear, but there are actually very good reasons for it.
It also meant spending money on changes in a lot of other, ancillary stuff. Like replacing the storage shelves for your records with new CD racks (which often meant changing your whole wall of bookshelves). And many record players were built into large cabinets that were part of the furniture of the room. And throwing away your investment in spare needles, record cleaning fluid, etc.
And there was the cost of replacing your library of music. Some stores had successful promotions where they offered ‘trade-in’ deals – exchange your LP record for x% off on the same recording on CD. But these were local stores; the record companies in general did not offer any such deals nationwide.
Also, at the start, only a small part of the catalog was released on CD. There were many LP records that could not be replaced by a CD version of that recording; it had not been released on CD. (There are still today many LP recordings that don’t have a CD counterpart.) So even if people had been willing to spend the money to replace their entire LP record collection with CD’s, they couldn’t – many of their LP records were not available on CD.