THE DYNAMISM OF BUSINESS TRANSFORMATION: DIGITIZATION OF PHOTOGRAPHY AND PHOTO-PRINTING BUSINESS
2022 Volume 49 Pages 98-107
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2022 Volume 49 Pages 98-107
In this study, we investigated how firms react to radical innovation and how incumbent businesses transform. We focused on the photo-printing business in Japan and its adaption to the digitization of photography after the mid-1990s, which might have had a negative effect on the survival of the industry. Nevertheless, despite theoretical predictions, the industry has prevailed.
Compared to existing research, our analytical perspectives were characteristic in the following two aspects: we focused on incumbent firms whose position would be undermined by new entrants; our unit of analysis was not limited to a single organization, but included multiple entities that are related to the focal firm to capture the entire change that was cumulatively generated by each entity. In the case analysis, we attempted to determine the reasons why photo-printing businesses have survived from both macro and micro perspectives, providing a multi-layered understanding of the phenomenon.
We revealed the significant role of digital-minilabs as a solution to the challenges of the photo-printing business, examined the reasons why this business achieved results that differ from existing theories, and uncovered the tacit premise of those theories. Next, we examined the following two issues: first, the reason for the emergence of digital minilabs at such an advantageous time for the photo-printing business. The timing of digital-minilabs' emergence was found not to have been determined based on strategic planning, but was a result of reactionary measures to address immediate challenges. Second, we investigated why minilab equipment spread rapidly to the entire photo-printing industry.
After investigating the digitization phenomenon in the photo-printing business, we propose that the process, which was intermediated by chance, can be explained from the perspective of the garbage can model. Finally, we distill the essence of the dynamic force that drove the transformation of the industry.
