FIRM STRATEGIES IN THE PERSONAL-COMPUTER MARKET - ARE ESTABLISHED BRANDS BETTER OFF

The personal computer market underwent significant structural changes throughout the late 1970s and 1980s. While some manufacturers of perso nal computers managed to remain in the market for a number of years, m any others left after a short time. Besides the more visible movement of firms in and out of the industry, each firm also made underlying de cisions regarding which models to offer.This article analyzes model se lection strategies adopted by personal computer (PC) companies from 19 76 to 1988, focusing on differences between established and new firms. While new firms were more likely to produce models with similar chara cteristics, established firms offered a larger variety of models. With such model ''dispersion'' strategies, they avoided replacing their ex isting models and occupied new, top-of-the-line market segments before entrants. High-priced models, controlling for their technical attribu tes and brand effects, were more likely to leave the market. Brand eff ects were also significant in affecting PC models' probability of exit . Models produced by firms with more experience, both in years and in the number of models produced in the past, were more likely to survive longer.