The incumbent State-owned Enterprises (SOE) are dominant players in the home markets. New entrants’ arrival challenges the SOEs’ market dominance while the technology discontinuity challenges the technical leadership by obsoleting the existing technology. This study focuses on the effect of these competitive pressures on the internationalization intent of the Indian SOEs. The incumbent firms develop a knowledge network in technical and market aspects by working with the partners, the suppliers and the buyers. The study also focuses on the moderating effect of the knowledge networks. This study uses structured equation modelling using the partial least squares technique as the analytical technique. The results confirm the positive effect of technological discontinuity on the internationalization intent. In contrast, new entrants had no such effect. The study also confirms the positive moderating influence of the knowledge network on the effect of technological discontinuity on the internationalization intent.
This study examines the effects of competitive pressure by new entrants and technological discontinuity on the strategic innovations adopted by incumbent state-owned enterprises (SOEs) in India. Due to government ownership, these firms are dominant players domestically and their market leadership is challenged by new entrants. Technological discontinuity challenges technology leadership. Incumbent firms develop knowledge networks by working with partners, suppliers, and buyers. The incumbent firms must strike a balance between the exploitation of current technology and the exploration of new technology. This study aims to understand the effect of new entrants and technological discontinuity on the exploitation and exploration strategies of Indian SOEs in the manufacturing sector. The quantitative analysis is carried out using partial least squares structural equation modeling. For Indian SOEs, the technological discontinuity does affect exploitation and exploration, but new entrants have no such effect. The study confirms the moderating effect of knowledge networks on exploitation.
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