The challenge for IBM is to continue to adjust to the new economic realities.
Finally, it is worth speculating that this entire story would have played out
much differently in the absence of the 1969 Justice Department case. Without that
case, IBM may have stayed farther ahead of its small rivals in the 1970s and may
have been more up-to-date on the technologies developed by its competitors. One
cannot be sure that history would have played out differently in the absence of the 1969 case, but there are strong reasons to believe that it would have.
Emerson W. Pugh, Building IBM: Shaping an Industry and Its Technology
( Cambridge, MA: MIT Press, 1995), p. 324.
For more on the life of Thomas Watson Sr., see Thomas G. Belden and
Marva R. Belden
, The Lengthening Shadow: The Life of Thomas J. Watson ( Boston: Little, Brown
and Company, 1962); Pugh, Building IBM, pp. 29-36; and Robert Sobel, IBM vs. Japan:
The Struggle for the Future ( New York: Stein and Day, 1986), pp. 28-34.
Charles H. Ferguson and
Charles R. Morris, Computer Wars ( New York: Random
House, 1993), pp. 3-4.
Pugh, Building IBM, pp. 323-324.
Richard T. DeLamarter, Big Blue: IBM's Use and Abuse of Power ( New York: Dodd, Mead, 1986), p. 29.
For explanations of the theory see Jack Hirshleifer, "The Firm's Cost Function: A
Successful Reconstruction?" Journal of Business 35 ( July 1962): 235-255; Kenneth J. Arrow
, "The Economic Implications of Learning by Doing", Review of Economic Studies 29 ( April 1962): 155-173; L. E. Preston and
E. C. Keachie, "Cost Functions and Progress
Functions: An Integration", American Economic Review 54 ( March 1964): 100-106; Sherwin Rosen, "Learning by Experience as Joint Production", Quarterly Journal of
Economics 87 ( August 1972): 366-382; Karl F. Habermeier, "The Learning Curve and
Competition: A Stochastic Model of Duopolistic Rivalry", International Journal of
Industrial Organization 10 ( September 1992): 369-392; and Clement G. Krouse, "Market
Rivalry and Leaming-by-Doing", International Journal of Industrial Organization 12
( December 1994): 437-456.
Gerald Brock, The U.S. Computer Industry: A Study of Market Power ( Cambridge, MA: Ballinger, 1975), p. 29.
Federal Trade Commission, Statistical Report: Annual Line of Business Report,
( Washington, D.C.: U.S. Government Printing Office), 1974- 1977 editions.
Brock, Market Power, pp. 33-37.
DeLamarter, Big Blue, p. 57.
Morris, Computer Wars, p. 7.
DeLamarter, Big Blue, p. 57.
See for examples, Telex Corporation v International Business Machines, 510 F2d 894 ( 1975); ILC Peripherals Leasing Company v International Business Machines, 458
FSupp. 423 ( 1978); and Memorex Corporation v International Business Machines, 636 F2d 1188 ( 1980).
Questia, a part of Gale, Cengage Learning. www.questia.com
Book title: Market Dominance:How Firms Gain, Hold, or Lose It and the Impact on Economic Performance.
Contributors: David I. Rosenbaum - Editor.
Place of publication: Westport, CT.
Publication year: 1998.
Page number: 150.
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