Article ID: CBB001320060

The Determinants of Competitive Success in the Interwar British Radio Industry (2012)

unapi

This article discusses the sources of competitive advantage in the interwar British radio industry. Specifically, it examines why sections of the industry that reaped substantial monopoly rents from the downstream value chain failed to dominate the industry. During the 1920s Marconi (which controlled the fundamental UK patents) had a key cost advantage, as had other members of the 'Big Six' electrical engineering firms which formed the BBC and were granted preferential royalties. Meanwhile the valve manufacturers' cartel was also able to extract high rents from set manufacturers. The vertical integration literature suggests that input monopolists have incentives to control downstream production. Yet---in contrast to the gramophone industry, which became concentrated into two huge companies following market saturation in the 1930s---radio retained a much more competitive structure. The Big Six failed to capitalize fully on their initial cost advantages owing to logistical weaknesses in supplying markets subject to rapid technical and design obsolescence. Subsequently, during the 1930s, marketing innovations are shown to have played a key role in allowing several independents to establish successful brands. This gave them sufficient scale to provide strong bargaining positions with input suppliers, negating most of their initial cost disadvantage.

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Authors & Contributors
Scales, Rebecca P.
Frost, Gary Lewis
Suzanne Lommers
Tom Lewis
Pierre Frigon
Yermolov, P. P.
Concepts
Broadcasting, radio and television
Radio
Technology and economics
Communication technology
Technological innovation
Technology and industry
Time Periods
20th century, early
19th century
18th century
20th century, late
20th century
21st century
Places
United States
England
Great Britain
Crimea (Ukraine)
Manchester (England)
Rio de Janeiro (Brazil)
Institutions
Radio Corporation of America
Canadian Broadcasting Corporation (CBC)
International Business Machines Corporation
École Polytechnique de Montréal
Academia Brasileira de Ciencias
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