A Process Model of Complementary Asset-Destroying Discontinuity in the Italian Newspaper Industry

Research has shown that established firms struggle to survive competence-destroying discontinuities unless they own valuable specialized complementary assets. But what happens when discontinuities destroy complementary assets while leaving incumbents’ core know-how intact? Our extensive qualitative study of the Italian newspaper industry through the Internet discontinuity (1995–2013) allows us to address this important question. We find that when a discontinuity transforms complementary assets from being specialized and tightly held to being generic and freely available, the way to create value in an industry is fundamentally altered—a change that may undermine or even erase incumbents’ competitive advantage. The research uncovers the mechanisms for this outcome, which include an increased access to core know-how and a shift from resource scarcity to resource abundance. We also explain why incumbents may lose value creation opportunities while entrants that develop orchestrating capabilities gain it. Fina...