Barriers to the Strategic Adoption of Revolutionary Manufacturing Processes Vincent Sabourin, Ph.D. Department of Administrative Sciences, University of Quebec at Montreal Montreal, Quebec, Canada H3C 4R2

Abstract This research examines the role of strategic barriers to the adoption of revolutionary new manufacturing processes in two American industries--primary textiles and steel Based on the experiences of these sectors, two general conclusions are reached First, the factors influencing strategic adoption of revolutionary processes can be classified into three categories: scale, vertical scope, and horizontal scope. Second, different strategic groups experience and encounter different barriers in the adoption of revolutionary technological processes.

Introduction

Objectives

Research on the adoption of new manufacturing technologies has centered historically on two perspectives: the macro view of industrial economics and the micro view interpretation of management research. Research in industrial economics has taken an industry perspective, describing the adoption of new technologies as a symmetrical phenomenon. This work has viewed technologies as being "on the shelf," available at the same time and in similar conditions to all industry producers (Shepherd 1972). In the last decade, behavioral industrial economists have criticized this perspective (Teece 1980; Scherer 1980; Jacquemin 1987; Oster 1990). Jacquemin has mentioned that "technological differences and resulting over time is totally ignored in industrial economics" (1987), while Brenner (1987) has argued that the focus on strategic behavior in industrial economics should be considerably enlarged to include innovative conduct. Research in management has taken an organizational perspective. Several authors have stressed the extent to which organizational factors such as structure, systems or culture can explain discrepancies in the adoption of new technologies (Adler 1988; Bessant, Loming, & Senker 1985; Fry 1982; Germin 1979, 1981). This perspective has been criticized, however not only because it did not take into account the role played by competition among producers (Porter 1983, 1985), but because its findings were specific and not generally applicable to the situations of other industry producers. More recently, a body of literature known as "strategic management" has turned to the competitive context, examining such topics as the position of a firm in the market structure, focusing upon the role played by barriers to mobility in the adoption of new technologies (Porter 1980, 1985; Oster 1990; Lele 1992).

This research examines the question of technology adoption from this strategic management perspective-an intermediate integrational approach between the macro view of industrial economics and the micro perspective of management. More specifically, it studies competitive factors which pose as barriers to the adoption of new technologies by strategic groups, defined here as producers with similar goals and characteristics competing on similar dimensions in the industry (Porter 1980), in regard to the following questions: 9 What is the nature of strategic barriers to adoption of radically new technologies? 9 What are the factors explaining the fact that certain industries did not adopt new manufacturing processes widely? 9 D o large-scale dedicated and small,scale flexible manufacturing processes act as similar or different barriers?

Methodology This research is engaged in an historical and comparative artalysis of two American industries considerably .transformed by the diffusion of radically new manufacturing processes since the beginning of the "1960s": the primary textile and steel industries. These industries were selected because they share four common characteristics: 1. Both industries have seen a shift from mass production to integrated process production under the form of continuous flow (according to the typology of Woodward [ 1965]). 2. Both industries were built at the beginning of the century and are currently manufacturing commodity goods for industrial markets.

Journal of Technology Transfer Vol. 23 (3): 59-66. 59

3. Both adopted technological changes at approximately the same period of time between 1958 and 1978 for the primary textile industry and between 1965 and 1985 for the steel industry. 4. Finally, both industries have witnessed the diffusion of radically new manufacturing processes labeled by the U.S. Office of Technology Assessment as "revolutionary." Specifically, this research includes an in-depth analysis of manufacturers in both industries--a group of small cotton textile producers in the primary textile industry and large integrated steel makers in the steel industry--who did not adopt the new processes widely. The research, completed over a three-year period, comprised an historical analysis of trade journals; a compilation of historical data derived from the U.S. Department of Commerce, Moody's and Compustat; and an examination of industry studies and plant visits. Industry experts and secondary sources such as trade journals also validated the f'mdings. Both industries were under the influence of two conjectural factors: ~ maturity stage and trade barriers: 1. Both industries were at a stage of maturity and had a moderate market growth. The maturity stage of the industry reduced the incentives to adopt radically new manufacturing processes. This was the case since the predictable cash flows had an expected moderate growth. 2. Both industries were also protected by trade barriers such as the Multiflbre Agreement (textile) and Voluntary Export Restraint (steel). These barriers restricted the entry of foreign players while reducing the incentives for adopting radically new manufacturing processes because of decreased foreign competition. Both conjectural factors had a similar impact on the industry by slowing down the rate of adoption of new processes and limiting competition within the established market structure. Our findings are applicable to industry at a similar stage of maturity. They are less applicable to industry with high or medium growth for three reasons: first, industries with high or medium market growth have greater incentives to adopt radically new processes. Second, these industries are younger and. their manufacturing processes much less formalized than established manufacturers at a maturity stage. Third, high or medium market growth improves the investment return in radically new manufacturing processes.

Technological Revolution of the Textile Industry (1958-1978) The primary textile industry underwent a revolutionary change due to a shift from mass production to large-scale ~The term "conjectural factors" refers to a combination of circumstances and events, especially those that produce a crisis. 60

dedicated integrated and continuous process technology. Revolutionary manufacturing processes such as ring spindles, open-end spinning, and automatic and shuttleless looms were introduced at the end of the 1950s. These new processes integrated formerly separate stages of spinning, weaving, and finishing into a continuous operation. Large chemical producers such as Dupont, Monsanto, and Celanese adopted these processes in high proportion when smaller, nonintegrated textile producers began to adopt these new processes.

Technological Revolution of the Steel Industry (1965-1985) The steel industry experienced the spread of a revolutionary change due to a shift from mass production to small-scale flexible manufacturing processes with processes such as continuous casting and electric furnace. Mini-mills adopted these radically new processes widely, whereas large integrated steel makers adopted them to a much lesser extent.

Findings The Primary Textile Industry In general, small cotton textile producers such as Riegel Textile, Reeve Brothers, Avondale Mills, Dixie Yam, National Spinning and Vernon Mills did not adopt the new large-scale dedicated processes. These producers faced several general obstacles: the small scale of their operations; a lack of vertical and horizontal integration, and conjectural factors. Scale--Operating scale proved to be a major impediment to adoption of new manufacturing processes. In the first place, small producers lacked the capital required to build plants with a minimum efficient scale and did not possess the scale of operations necessary to exploit economies of scale from larger plants (Textile World January 1975; Vibert). While it is true that adopting these new processes could be profitable if a firm operated the equipment on a two or three-shift basis for several years (thereby speeding capital costs over a large volume of output), the vast majority of small cotton textile produces had neither a large, sufficiently business volume to justify organizing their production on such a large-scale nor the ability to amortize financing of large industrial equipment (Vibert 1966). Small cotton producers lacked flexibility. Many innovations for spinning and weaving had been designed for large producers with machinery which required dedicated production runs. Most small cotton textile producers, however, were operating with hatch production and nonstandard products; small but significant alterations to existing principal machine components would have been more

expensive than the purchase of entirely new machinery (Pack 1987). Furthermore, many fiber-clearing alternatives or drafting systems currently available were not adapted for small firms. Smaller cotton textile producers did not possess the appropriate engineering and administrative skills to do the more sophisticated financial planning, product development and industrial engineering demanded by large-scale systems (Ota 1987). Located in small towns and rural areas, they faced problems of recruiting, training and paying qualified professionals who could oversee major transformations of techniques or extensive specialization and integration of production. These producers were also constrained by their short-term cost structure. The cost of raw materials in small textile mills could amount to over 60% of total costs in the spinning and weaving sections. With some direct labor and other variable costs added, this structure led to very highly variable total cost ratio (OECD 1965; Juvet 1967). The proportion of variable costs for small producers units remained much higher than for larger textile and chemical units; and, although a high proportion of variables costs was an advantage in economic downswings because it lowered the break-even point of these producers, it became a barrier to long-term investments. Economic fluctuation also acted as a deterrent to investment in modern equipment, even if much of the idle machinery was old and fully-depreciated. This kept, business labor-intensive, dominated by short-term orientation. Vertical Integration--Another considerable barrier to the adoption of new manufacturing processes was the lack of both upstream and downstream vertical integration. Lack of upstream vertical integration at the spinning stage decreased incentives for small producers to adopt large-scale processes. Unable to benefit from the primary transformation at the spinning stage, these producers had few reasons to diversify their businesses (Textile World August 1975) since they could not benefit from economies in draw texturing by eliminating the middleman. Nor could they access significant advantages to be gained through less handling, or compete with the years of experience in handling filament yams of the largest cotton textile producers (Textile World October 1958). On the other hand, lack of downstream vertical integration at the level of apparel-making, distribution and retail chains also acted as a deterrent to adoption of large-scale industrial processes. Unlike large cotton textile producers, small producers could not make investments in consumer products to increase their market power over retailers, deal with inventory problems or reduce their inventories; nor could they overcome difficulties with overproduction and industrial pileups. The president of J.P. Stevens described the problem associated with lack of vertical integration in these terms:

"When the sales begin to slip, the mill owner would send messages to his sales agents in New York and tell them to snap out of it and get out and sell a bit harder... But he would never listen to our advice. So we would get a warehouse full of inventory. Then we would shut down the mill completely for a couple of months until we could work off that inventory" (Business Week March 23, 1963). To add to these difficulties, small plants faced labor problems. Workers in those plants lacked the knowledge essential for coordinating vertical production flows. The existing job-shop skills were not transferable to large automated industrial situations. Moreover, the mills located in relatively isolated areas, and small towns close to cotton crops relied primarily on low-paid female labor. Adopting the new processes would require a different type of work force, one available for the night shift. Aside from early trade union problems, better-organized shift work and payment of wage premiums would have eliminated profits of most firms. Finally, the family-oriented structure of many of these businesses reduced the opportunities for the companies to become fully integrated by making upstream and downstream vertical acquisitions and restricted opportunities for consolidation, particularly in weaving.

Horizontal IntegrationMSmall producers traditionally remained confined to a narrow product range---a condition which increased their vulnerability to economic fluctuations characteristic of this industry which depends upon changing fashion trends. Instead of alleviating this situation, adopting new large-scale processes would only have increased dependence on a few product lines. Those small producers who did adopt the new processes by enlarging their product range offered few incentives to others, as they soon faced major difficulties and bankruptcies. Conjectural Factors--Two conjectural factors help to explain why small cotton textile producers did not widely adopt the new processes: strong economic fluctuations and fashion trends (OTA 1987). Economic swings periodically destroy or retard the profitability of any industry. The president of J.P. Stevens himself stated that one of the most serious problems in industry was the damaging effects of these market ups and downs. In the small textile industry, this economic uncertainty unfortunately coincided with the introduction of new processes, reducing their appeal, since, if adopted, they would have significantly increased the proportion of fixed over variable costs. Moreover, small producers remained hesitant to adopt new processes both because they lacked the ability to predict changes in seasonal clothing and because they did not possess the market power necessary to control apparel makers and retail chains, who were often responsible for changing fashion trends.

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Table 1. Strategic barriers to the adoption of large-scale dedicated manufacturing processes by small cotton producers Structural Factors i

i

Strategic Behaviors

Competitive Dimensions

Scale

9 Small-scale productive capacity was insuffident to justify the adoption of large-scale processes. 9 Large-scale processes lacked machinery flexibility and required dedicated production lines. 9 Lack of standardized input mata~l reduced opportunities for greater production speed. 9 Constraints of short-term cost structure acted as a deterrent to investment in modem equipment. 9 Process lacked of engineering and administrative supporting skills necessary for large-scale prod~tien.

Vertical Scope

9 Lack of a priori upstream vertical integration reduced incentives. 9 Low downstream vertical integration hindered access to outlets for additional production. 9 Job-shop skills are not lzansferable to large automated plants.

Horizontal Scope

9 Adoption of large-scale processes accentuated existing weaknesses stemming from a lack of product diversification, which left producers vulnerable to eeenomic fluetuatien.

Conjectural

9 Strong economic fluctuations increased the risk of adopting new technologies. 9 Producers were unable to predict fashion trends.

Large Integrated Steel makers In general, like the small textile industry, large steel makers such as U.S. Steel, Bethlehem Steel, and Armco did not adopt the new manufacturing processes widely, particularly those of the electric furnace and continuous casting. It has been estimated that between 1976 and 1985, only 28% of the new capacity provided by the electric furnace was adopted by large and medium steel makers. In 1985, the volume of steel manufactured using electric furnaces was estimated at 2 5 30%. Slab and billet came in slowly and have remained low for these producers. The number of steel manufacturers who adopted continuous casting was also significantly low--in 1985, for instance, the volume of steel produced using this process remained at 25-30%. Moreover, those few producers who did adopt this process did so at a high replacement cost. Generally speaking, the bigger the plant, the more difficult it proved to adopt the new processes: it has been estimated that 30% of the plants who rejected the innovations were large, Furthermore, none of the large and medium integrated producers was capable of combining the electric furnace and continuous casting to manufacture their products.

Strategic Obstacles Although the electric furnace and continuous casting were introduced in the 1960s, by 1985 nearly 70% of the steel produced originated in integrated mills using conventional processes. Four specific barriers, associated with the industry's past technological and competitive choices, were responsible for this situation: scale, vertical and horizontal integration and conjectural factors. 62

Scale--As with the primary textile industry, scale---in this instance, large-scale operations--proved to be a significant obstacle to the adoption of new technologies. Four factors can be cited as being responsible for this situation: First, the scale and technical characteristics of the new processes were not an economically attractive option for large firms. For one thing, reasonable arrangements for placing casters alongside large multiple open-hearth furnaces and huge roiling mills complexes proved to be difficult to design. In the end, electric furnace technology remained as an economically attractive option for selected small firms only. Second, new processes such as continuous casting could not be adopted incrementally without abandoning existing ingot route facilities. This situation not only negated several potential cost advantages offered by the new processes, but led to some serious cost increases because of duplication in production flows, forcing integrated steel makers to operate below minimum efficiency. Third, the cost of exiting from large-scale processes was high. Plants and equipment had aged and become a handicap for large steel makers. It was difficult to sell used plants and facilities which were, on average, 27 years old. Nor were plant shutdowns the answer--for instance, between 1982 and 1986, shutdowns in the industry cost 6 billion. Quite simply, several management executives were not ready to enter large losses into their annual reports, preferring instead to operate with relatively inefficient plants. Consequently, the only viable avenue was to accommodate new processes to the old, even if this measure created technical and production problems. Finally, large integrated steel makers had taken the slow depreciation option for their ingot facilities, and, since these had not fully depreciated, they faced fiscal penalties which deterred them from adopting new pro-

Table 2. Strategic barriers to the adoption of small-scale flexible manufacturing processes by large integrated steel makers Structural Factors Competitive Dimensions

Strategic Behaviors

Scale

9 Producers lacked discretionary capital at the moment when new technologies were introduced. 9 Difficulties arose in designing reasonable arrangements for casters with large, multiple open-hearth furnaces and large rolling mills complexes. 9 Continuous casting could not be introduced incrementally without abandoning existing ingot-route facilities. 9 Aging of plants and equipment was a cost liability.

Ve~dcal Scope

9 Producers could not risk negatives consequences of bottlenecks in non-integrated operations. 9Escalating price of raw material and labor made process unprofitable. 9 Job-shop skills were not transferable to large automated plants.

Horizontal Scope

9 Poor plant location in the North East and North Central instead of South and West U.S. reduced profitability.

Conjectural

9 Poor ratio of debt-to-bookvalue and lower cash flows increased the cost of access to capital for plant modernization. 9 Non-profitable diversification outside the steel industry reduced the availability of capital.

cesses. Electric furnace technology was an economically attractive option only for selected small firms with a raw material capacity of less than 600,000 tons annually (Rosegger 1979). Because large steel makers could not risk a bottleneck in manufacturing operations, they had to keep both continuous casting and conventional processes in the same facility--an option both costly and inefficient (FTC 1977). Financial considerations, especially the escalating price of raw materials and labor, also proved to be a barrier to the divestment of downstream steel operations. For instance, in 1952, labor costs were 18% higher that the overall industry average (FTC 1977). By 1971, this figure had risen to 60%. Moreover, since 1965, straight-time hourly wage rates increased from $3.17 to $13.01 in 1985, representing a 310% increase wage or an annual growth of 7.71%. By comparison, for the same period, U.S: labor wages grew only 1.4% annually (BLS 1985). Vertical I n t e g r a t i o n - - T h e adoption o f continuous cast-

ing was associated with major potential problems in the vertical coordination of the production flows. The negative consequences of a bottleneck in the production process were much greater for integrated mills than for nonintegrated mills (Rosegger 1979). Several risks at the vertical production level were found in adopting continuous casting. Continuous casting required very complex machines and a breakdown could paralyze rolling and finishing operations (FTC 1975). Large steel makers could not afford the risk of bottleneck in their manufacturing processes; thus they had to keep both continuous casting and conventional processes in the same facility which was costly and inefficient (FTC 1977). The operations of continuous cast-

ing machines in large integrated plants became greatly dependent on the ability of integrated steel makers to accommodate the flow of hot metal from the steel melting segment (Rosegger 1979). The escalating price of raw materials and labor also reduced the room for maneuvering to achieve divestment of downstream steel operations. The strength of labor unions severely restricted possibilities of reducing the vertical scope for large steel makers. In 1952, labor costs were 18% higher than the overall industry average (Rosegger 1979). In 1971, they were 60% higher than the industry average (Rosegger 1979). Since 1965, straight time hourly wage rates increased from $3.17 to $13.01 in 1985. This represents an increase of 310% for wages, an annual increase of 7.71%. By comparison, for the same period, U.S. labor wages grew only 1.4% annually (BLS 1985). Horizontal Integration--Traditionally, large integrated

steel makers manufactured a wide range of products. This tendency prevented them from focusing upon customized needs of specialized industries. According to Bethlehem Steel's president, Mr. Williams, the company lacked focus, owing to the philosophy of "being everything to everybody." For decades, this company had been producing a wide variety of steel products, including sheet strips, plates, structural shapes, piling bars, tin products, rails, pipes, rods and wires. Eight plants produced raw steel; sixteen manufactured miscellaneous other products, while eighteen constructed ships. In an insufficient effort to correct this situation, between 1980 and 1985, Bethlehem concentrated upon incorporating new techniques, focusing on high-strength and corrosion-resistant steels for the automobile industry, its largest client. Nor was Bethlehem the only large integrated

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manufacturer to alter its focus. During the mid-80s Armco concentrated its basic operations on special purpose and commodity steels, investing in fewer but selected products, such as fiat-rolled coated steels, high-strength steels and structural plates.

Conjectural Factors--Two conjectural factors impeded adoption of the new processes: thepoor ratio of debt-to-book value, and low returns from the industry's external investments. A third factor, also pertaining to financial concerns, was a lack of discretionary capital at the time that the new technologies were being introduced. In the mid-1960s, in an attempt at diversification, large steel makers invested important capital resources outside the steel industry. Unfortunately, these initiatives did not prove profitable, and considerably reduced available investment capital. Thus large steel makers were in a precarious f'mancial situation when the new processes were being introduced. In 1973 and 1974, the industry had to obtain $1,158 billion from external sources--most of it to pay off debts--while the ratio of debt-to-book value increased from 24% in 1974 to 31% in 1977. In the same period industry cash-flows fell from $4 billion to $2.1 billion. In 1977, it was estimated that the industry had to obtain $4 and $5 billion a year to modernize its plants radically.

Discussion In this section, we discuss our findings and its implications for strategic management. Our research brings three specific contributions for strategic management: 1. There exist three specific barriers to the adoption of radically new manufacturing processes: scale of operation, vertical integration and product diversification. We found that these three barriers were common to both industries even if technological processes were radically different. The scale of operation remains the main obstacle for adopting radically new manufacturing processes; it has also an indirect impact on the vertical and the horizontal scopes. For instance, radically technological processes might require a larger scale (or a smaller scale) of operations that will substantially increase (or decrease) the scale of production runs. This is intimately connected with large economies of scale and market scope. By increasing or lowering the efficiency scale of operations, new technological processes have an indirect impact on the vertical scope of integration and put additional pressure on manufacturers to become vertically integrated to reduce the risks of bottlenecks in their manufacturing capacity. Radically new manufacturing processes have a strong structural impact on the upstream and downstream vertical linkages of producers.

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A large scale of operation also has an impact on the horizontal scope of operations by putting additional pressure on the manufacturers to increase (or decrease) the product range, therefore decreasing the risks of a bottleneck in production capacity. The degree of production diversification is secondary: it has the effect of reducing a firm's dependence on long production runs. 2. The adoption of radically new manufacturing processes has an asymmetrical impact on the industry depending on the strategic groups of the industry. The new manufacturing processes transform the market structureby modifying the adequate scaleof operation, the adequate degree of vertical integration and product diversificationto compete efficientlyin the industry.An obstacle for one group might be an opportunityfor another group depending on the consistencywith the manufacturers' positioning.When these processes are consistentwith the actualpositioningof a strategicgroup in terms of scale of operations, vertical scope and horizontal scope, they reinforce the positioning of the manufacturers in the industry. By contrast, when the processes are inconsistent with the actual positioning of a strategic group, they will increase the vulnerabilityof the manufacturers. Figure I on the next page illustrateshow competitive dimensions mediate the impact of the new processes and have an impact depending on the consistency with the positioning of strategic groups of manufacturers 3. Third, we found that large-scale dedicated and small-scaleflexiblemanufacturing processeshave radicallydifferentimpacts on strategicgroups of the industry. The impact depends on the positioning of strategic groups. Large-scale dedicated processes represent an obstacle for strategic groups with a small scale of operation, a low vertical integration and a low degree of product diversification. However the same processes represent an opportunity for strategic groups with a large scale of operations, a high degree of vertical integration and a wide product diversification. Small-flexible manufacturing processes represent an obstacle for strategic groups of manufacturers with large scale of operations, a high degree of vertical integration and a high degree of horizontal integration, but they become a facilitating condition for strategic groups of manufacturers with a small scale of operation, a low vertical integration and a narrow product range.

Conclusion This discussion has shown how four factors--scale, vertical and horizontal scopes and conjectural conditions-influenced how small cotton textile producers and large steel makers adopted radically new technological processes. These factors are, as the research indi-

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1985, pp. 283-295.

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Business Week. "J.P, Stevens Seeks a Future Beyond Textiles." March 23, 1969.

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Fry, L.W. "Technology-Structure Research: Three Critical Issues." Academy of Management Journal 25, 1982, pp. 532-552. Galbraith, J.R. "Strategy and Organization Planning." Human Resources Management 22(1), Spring/Summer 1983, pp. 63-77. Gerwin, D. "The Comparative Analysis of Structure and Technology: A Critical Appraisal." Academy of Management Review 4, 1979, pp. 41-51.

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Gerwin, D. "Relationships Between Structure and Technology." In Handbook of Organizational Design, England: Oxford University Press, 1981. Hunt, M,S. "Competition in the Major Home Appliance Industry." Doctoral dissertation, Harvard University, 1972. Jacquemin, A. The New Industrial Organization, M.1.T. Press.

Figure 1. Strategic barriers to the adoption of revolutionary manufacturing processes cates, not exogenous, but primarily indigenous to the industries themselves. These findings are therefore compatible with a strategic management perspective and imply two basic assumptions for the management of technology transfer. First, members of a particular group of producers could gain an economic advantage by adopting radically new manufacturing processes before their competition. As this research clearly illustrates, the acceptance of innovations is constructed by a set of decisions taken by the producers and should therefore be seen as a consequence of the buildup of investments in tangible and intangible assets. Using assets systematically to adopt new processes, strategic groups can overcome inherent obstacles and shape the technological conditions of a given industry. Viewed from this perspective, strategic obstacles then become competitive advantages, natural consequences of technological choices and greater organi, zation efficiency.

References Adler, Paul S. "Managing Flexible Automation." California Management Review March/April 1985, pp. 74-98. Bessant, J., R. Lamming, and R. Senker. "The Challenge of Computer-Integrated Manufacturing." Technovation 3,

Juvet, J.L. "The Cotton Industry and World Trade." Journal of World Trade Law Sept.-Oct. 1967, pp. 222-234. Lele, Malcolm. Creating Strategic Leverage. Wiley, 1992. Nelson, R., and S.G. Winter. An Evolutionary Theory of Economic Change. Cambridge, MA: Harvard University Press, .1982. Nelson, R., and S.G. Winter. "Forces Generating and Limiting Concentration Under Shumpeterian Competition." Bell Journal of Economics, Fall 1989, pp. 524-548. OECD. Modern Cotton Industry: A Capital Intensive Industry. Oster, S. "Intra-lndustry Structure and the Ease of Strategic Change," Review of Economics and Statistics 64(3), Aug. 1982, pp. 376-384. Oster, S. Modern Competitive Analysis. England: Oxford University Press, 1990. Pack, Howard. Productivity, Technology and Industrial Development World Bank. England: Oxford University Press, 1987. Porter, M. Competitive Strategy. New York: Free Press, 1980.

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Porter, M.E. "The Technological Dimension of Competitive Strategy." Research on Technological Innovation, Management and Policy 1, 1983, pp. 1-33. Porter, M.E. "Technology and Competitive Advantage." Journal of Business Strategy 5, 1985, pp. 60-68. Rosegger, Gerhard. "Diffusion of Technological Specificity: The Case of Continuous Casting." The Journal of Industrial Economics 28(1), 1979, p. 41.

Textile World Special Report, "Textiles in Transition," January 1975. Textile World. "Dan River in Texturing: A Success." August 1975. U.S. Department of Commerce. Bureau of Labor Statistics Index, 1965 and 1985. (Washington, DC: Bureau of Labor Statistics).

Scherer, F. Industrial Market Structure and Economic Performance. Chicago: Rand McNally, 1980.

U.S. Office of Technology Assessment, Technology and Steel Industry Competitiveness (Washington, DC: U.S. GPO, 1987).

Shepherd, W.G. "The Elements of Market Structure." Review of Economics and Statistics 54, 1972, pp. 25-37.

Vibert, F. "Economic Problems of the Cotton Industry." Oxford Economic Papers 18(3), 1966, pp. 323-333.

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Author Biography Teece, D.J. "Economics of Scope and the Scope of the Enterprise." Journal of Economic Behavior and Organization 3, 1980, pp. 223-247. Teece, D.J. "Economic Analysis and Strategic Management." California Management Review 3(26), Spring 1984, pp. 87-109. Textile World. October 1958.

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Vincent Sabourin is Professor of Strategic Management and an active researcher in the area of competitive and market strategies. Dr. Sabourin teaches at undergraduate and graduate levels and has been a consultant for several Canadian corporations. He holds a Ph.D. from McGill University.