Question

Which of the following statements is true about new entrants in the context of a technological paradigm shift question

a. new entrants are not constrained by lack of capital
b. new entrants do not need to worry about their established customer base
c. new entrants often face the risks of product cannibalization
d. it is difficult for new entrants to focus all their energies on the opportunities offered by the new disruptive technology.
e. pressures to continue the existing out-of-date business model hamstring new entrants

Answer 1

New entrants in a technological paradigm shift do not need to worry about their established customer base, which allows them to focus on leveraging the new technology fully.

Step-by-step explanation:

When examining the statement about new entrants in the context of a technological paradigm shift, it is important to note that new entrants often have distinct advantages and challenges. These can be financial, market-specific, or operational. However, among the options provided, the correct one is that new entrants do not need to worry about their established customer base, as they typically do not have one. Established firms have to consider potential product cannibalization when introducing new technologies.

In contrast, new entrants can focus all their energies on leveraging opportunities offered by the new disruptive technology without such legacy concerns. Although new entrants can still face significant barriers to entry, including capital, technology, and market forces, the flexibility to build a business model around cutting-edge technology without the constraints of an existing customer base or outdated model offers them a unique advantage.