THE MIT JAPAN PROGRAM _____ 1N -Z a '
THE MIT JAPAN PROGRAM _____ 1N -z a ' .. Science, Technology, Management 0 4 1J_ %I--, STRATEGIC MANEUVERING AND MASS-MARKET DYNAMICS: THE TRIUMPH OF VHS OVER BETA Michael A. Cusumano, Yiorgos Mylonadis, and Richard Rosenbloom Massachusetts Institute of Technology MITJP 91-68 Center for International Studies Massachusetts Institute of Technology ------ ___l__l.....__x__-_____ I ___ 1 DISTRIBUTED COURTESY OF THE MIT JAPAN PROGRAM Science . Technology . Management Room E38-754 Massachusetts Institute of Technology Cantmbridge, MA 02139 (617) 253-2839 Copyright 1992 The MIT Japan Program STRATEGIC MANEUVERING AND MASS-MARKET DYNAMICS: THE TRIUMPH OF VHS OVER BETA Michael A. Cusumano, Yiorgos Mylonadis, and Richard Rosenbloom Massachusetts Institute of Technology MITJP 91-)8 -(Ii--·--_--- I ---- __ ABSTRACT This article deals with the diffusion and standardization rivalry between two similar but incompatible formats for home VCRs (video- cassette recorders): the Betamax, introduced in 1975 by the Sony Corporation, and the VHS (Video Home System), introduced in 1976 by the Victor Company of Japan (Japan Victor or JVC) and then supported by JVC's parent company, Matsushita Electric, as well as the majority of other distributors in Japan, the United States, and Europe. Despite being first to the home market with a viable product, accounting for the majority of VCR production during 1975-1977, and enjoying steadily increasing sales until 1985, the Beta formatfell behind the VHS in market share during 1978 and declined thereafter. By the end of the 1980s, Sony and its partners had ceased producing Beta models. This study analyzes the key events and actions that make up the history of this rivalry while examining the context -- a mass consumer market with a dynamic standardization process subject to "bandwagon" effects that took years to unfold and were largely shaped by the strategic maneuvering of the VHS producers.
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