Final answer:
The CEO must overcome organizational inertia and board resistance to strategic change, convincing them that embracing new technology is essential for staying competitive and profitable, even though it involves entering into uncertain markets and possibly fracturing their monopoly-like position in software.
Step-by-step explanation:
The CEO in this scenario is facing the challenge of strategic change management within the company. The resistance he faces from the board of directors is linked to their adherence to the current business identity as a software-focused firm, which clashes with the CEO's vision of diversifying into hardware enabled by new technology.
For the CEO to overcome internal resistance, he must navigate through organizational inertia and the fear of stepping into unfamiliar market territories, while presenting a compelling case for how embracing innovation and expansion can position the company to take advantage of lucrative market opportunities and potentially deliver higher profits over time, despite competitor pressure and the risk of diluting their current market strength.
This involves finding a balance between the perceived safety of a monopoly-like position in their current software market and the pursuit of innovation to stay ahead in a competitive landscape, where relentless pursuit of new technologies can contribute to attaining a 'winner-take-all' position within the industry as seen in historical cases like Microsoft and Amazon. Ultimately, the CEO must align the company's strategic objectives with the dynamic forces shaping the technology sector, where both small and large firms can thrive depending on how they leverage information and communications technologies.