Are More Good Things Better, or Will Technical and Market Capabilities Conflict When a Firm Expands?

This paper examines the effects on performance of possessing market and technicallyrelated capabilities before entry into a new technical subfield of the imaging industry between 1954 and 1988. The study addresses cases in which technical change does not destroy the value of market-related assets of incumbent firms. I examine the survival, short term market share, and longer term market share, attained by industry incumbents and entrants diversifying from other industries. I find that different resources contribute to different types of performance, and that the intuitively likely result— that possessing more technical and market-related resources leads to better performance—sometimes does not occur.