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(line) Traditionally, the first firm to commercialize a
new technology has benefited from the unique
opportunity to shape product definitions, forcing
followers to adapt to a standard or invest in an
(5) unproven alternative. Today, however, the largest
payoffs may go to companies that lead in
developing integrated approaches for successful
mass production and distribution.
Producers of the Beta format for
(10) videocassette recorders (VCRs), for example,
were first to develop the VCR commercially in
1975, but producers of the rival VHS (Video
Home System) format proved to be more
successful at forming strategic alliances with
(15) other producers and distributors to manufacture
and market their VCR format. Seeking to maintain
exclusive control over VCR distribution, Beta
producers were reluctant to form such alliances
and eventually lost ground to VHS in the
(20) competition for the global VCR market.
Despite Beta’s substantial technological head
start and the fact that VHS was neither technically
better nor cheaper than Beta, developers of VHS
quickly turned a slight early lead in sales into a
(25) dominant position. Strategic alignments with
producers of prerecorded tapes reinforced the
VHS advantage. The perception among
consumers that prerecorded tapes were more
available in VHS format further expanded VHS’s
(30) share of the market. By the end of the 1980s,
Beta was no longer in production.