Question

When the laptop market overtook the desktop market, blue tech inc., a leader in desktop technology, was left at a competitive disadvantage. Later, blue tech inc.'s management channeled all of the company's efforts and revenue to develop an efficient laptop from scratch in less than a year. However, the company failed because blue tech inc.'s models were inferior to the third- and fourth-generation models its competitors were selling. In this scenario, blue tech inc.'s failure can be best attributed to?

Answer 1

In this scenario, Blue Tech Inc.'s failure can be best attributed to "Time compression diseconomies."

We accept time compression diseconomies where the snappier a firm builds up the asset, the higher the improvement cost. We demonstrate that time compression diseconomies normally offer ascent to asset heterogeneity and henceforth upper hand in that one firm builds up the asset quicker than the other. We evaluate the supportability of the upper hand, determine conditions  

under which the asset is "incomparable" and demonstrate that firm benefits are nonmonotonic in the degree of time compression  diseconomies.