Publications
Publications
- October 1991 (Revised November 1993)
- HBS Case Collection
Philips' Compact Disc Introduction (A)
Abstract
Asks that students adopt the perspective of Philips in 1979, after technical development of the CD was complete, but three years before it was introduced commercially. At that time, Philips' management had to decide whether to attempt to establish a CD standard through an alliance with another consumer electronics firm. Raises questions regarding the costs and benefits of standardization, optimal pricing of CD players and discs (given their complementarity), optimal pricing of a durable good, and the effects of proprietary information on entry strategies. Also requires analysis of several related industries, with special attention to opportunities to invest in product-specific capital.
Keywords
Technological Innovation; Market Entry and Exit; Product Launch; Standards; Product Development; Technology Industry
Citation
McGahan, Anita M. "Philips' Compact Disc Introduction (A)." Harvard Business School Case 792-035, October 1991. (Revised November 1993.)