Rahul Kapoor

Associate Professor of Management at The Wharton School


The Wharton School

Rahul Kapoor  is an Associate Professor of Management at the Wharton School, University of Pennsylvania. In his research, Rahul explores the strategies pursued by established and emerging firms in technologybased industries. He focuses on how firms organize for innovation and manage technological and industrylevel changes. His work has been published in several leading peerreviewed journals including the Academy of Management Journal, Organization Science, Research Policy and Strategic Management Journal, _and in practitioner journals including the _Harvard Business Review and MIT Sloan Management Review. He is a member of the editorial board for the Academy of Management Journal, Organization Science, Strategic Management Journal and Strategy Science. At Wharton, Rahul teaches undergraduate, MBA, Executive MBA, and PhD courses on Technology Innovation and Strategy. He is also an active contributor to Wharton’s Executive Education, teaching in both the customized and open enrollment programs. He has received several awards for his research and teaching including the inaugural Academy of Management (Technology and Innovation Management Division) Emerging Scholar Award. Prior to joining academia, he spent over 7 years in the hightech industry where he worked for Texas Instruments and was involved with two startups, one of which he cofounded.

Joon Mahn Lee and Rahul Kapoor (2017), Complementarities and Coordination: Implications for Governance Mode and Performance of Multiproduct Firms , Organization Science.

Abstract: We explore the fit between a firm’s product portfolio strategy and its governance mode with respect to complementary activities that underlies its product offering.  We view firm’s governance choice through the lens of orchestrating complementary activities that entail multiple interrelated and often simultaneously occurring transactions.  Our core premise is that a broader product portfolio while offering benefits through the bundle of complementary activities raises the coordination costs for firms, making integration of complementary activities a preferred mode of governance.  We find strong support for our arguments in the context of the U.S. healthcare industry.  Hospitals with a narrow service portfolio are more likely to have contracts with physicians as external service providers, and hospitals with a broad service portfolio are more likely to employ their own physicians.  Moreover, hospitals that deviate from this fitbased relationship suffer a significant penalty in terms of their financial performance as measured by return on assets (ROA) and return on sales (ROS).  Our findings allow us to shed new light on the linkage between strategy and governance mode, and enable us to illustrate that performance differences across multiproduct firms may be better understood by considering the fit between their strategy and their governance mode instead of simply focusing either on their strategy or on their governance mode per se.

John C. Eklund and Rahul Kapoor (Under Review), Uncovering an Incumbency Paradox: Firms with the Greatest Need to Change Face the Greatest Stock Market Pressure to Conform.

Abstract: An emerging literature stream explores how incumbents’ strategies in the face of industry change are evaluated by stock market participants, underscoring how institutional pressures may constrain incumbents’ adaptation. An important insight offered so far is that securities analysts are embedded in existing industrylevel categories which results in them being less attentive and optimistic when firms pursue strategies that embrace new emerging technologies and business models, resulting in an effect sometimes referred to as the “incumbent discount.” In this study, we offer an alternative perspective on the incumbent discount, one that is explicitly rooted in the rationale employed by stock market investors to value firms. We suggest that this rationale can add to the explanation of the incumbent discount. More importantly, it allows us to consider differences among incumbents in terms of their internal asset configurations and their external competitive environment. Evidence from the US electric utility industry, which is undergoing a change from a centralized to a decentralized model of electricity generation, offers strong support for our arguments. Ironically, the discount associated with incumbents’ pursuit of the decentralized model is exacerbated for those incumbents who have the greatest need to change – those who have accumulated higher stocks of assets that cannot be deployed in the decentralized model, and those operating in more competitive environments. However, incumbents’ pursuit of the decentralized model through alliances with partners from outside the industry mitigates the discount, suggesting that alliances can help to buffer these institutional pressures.

Shiva Agarwal and Rahul Kapoor (Working), Two Faces of Value Creation in Business Ecosystems: Leveraging Complementarities and Managing Interdependencies.

Abstract: A given innovation often does not stand alone. Rather it is connected with other elements in the ecosystem that impacts its value creation. We draw on this premise in a platformbased ecosystem in which participating firms innovate around a platform. We introduce the notion of connectedness to refer to the extent to which a given innovation interacts with the platform (i.e., platform connectedness) and also with the other complements in the ecosystem (i.e., complement connectedness). On the one hand, higher connectedness may allow the innovation to leverage complementarities. On the other hand, it may subject the innovation to an array of interdependencies that may limit its value creation. We explore these arguments on apps launched by software developers for Apple’s iPhone platform between 2008 and 2013. We find that higher platform and complement connectedness is in general associated with a greater likelihood of app’s successful commercialization. However, the benefit of platform connectedness is weakened when Apple updates its platform with a new generation.  In contrast, the benefit of complement connectedness is strengthened when Apple updates its platform and if the complements themselves have low platform connectedness. These findings shed light on two faces of value creation in ecosystems the opportunities associated with leveraging complementarities and the challenges associated with managing technological interdependencies.

Rahul Kapoor and Shiva Agarwal (2017), Sustaining Superior Performance in Business Ecosystems: Evidence from Application Software Developers in the iOS and Android Smartphone Ecosystems , Organization Science.

Abstract: We study the phenomenon of business ecosystems in which a platform firm orchestrates the functioning of the ecosystem by providing a platform and setting the rules for other complementor firms to participate in it. We develop a theoretical framework to explain how the structural and evolutionary features of the ecosystem may shape the extent to which participating complementor firms can sustain their superior performance. The structural feature, which we refer to as ecosystem complexity, is a function of the number of unique components or subsystems that interact with the complementor’s product. We incorporate the evolutionary features by considering the role of generational transitions initiated by platform firms over time as well as the role of complementors’ ecosystemspecific experience. Evidence from Apple’s iOS and Google’s Android smartphone ecosystems supports our arguments that higher ecosystem complexity helps app developers sustain their superior performance, and that this effect is stronger for more experienced firms. In contrast, platform transitions initiated by Apple and Google make it more difficult for app developers to sustain their performance superiority, and that this effect is exacerbated by the extent of ecosystem complexity.  The study offers a novel account of how the performance of complementor firms in business ecosystems may be shaped by their ecosystemlevel interdependencies.

Ron Adner and Rahul Kapoor (2016), Innovation Ecosystems and the Pace of Substitution: Reexamining Technology Scurves , Strategic Management Journal, 37 (4), pp. 625648.

Abstract: Why do some new technologies emerge and quickly supplant incumbent technologies while others take years or decades to take off? We explore this question by presenting a framework that considers both the focal competing technologies as well as the ecosystems in which they are embedded. Within our framework, each episode of technology transition is characterized by the ecosystem emergence challenge that confronts the new technology and the ecosystem extension opportunity that is available to the old technology. We identify four qualitatively distinct regimes with clear predictions for the pace of substitution. Evidence from 10 episodes of technology transitions in the semiconductor lithography equipment industry from 1972 to 2009 offers strong support for our framework. We discuss the implication of our approach for firm strategy.

Rahul Kapoor and Thomas Klueter (2015), Decoding the AdaptabilityRigidity Puzzle: Evidence from Pharmaceutical Incumbents’ Pursuit of Gene Therapy and Monoclonal Antibodies , Academy of Management Journal, 58 (4), pp. 11801207.

Abstract: The emergence of radical technologies presents a significant challenge to incumbent firms. We study firms’ management of radical technological change by separating their actions into upstream research (the “R” of R&D) and downstream development (the “D” of R&D). We introduce two contingencies to explain when incumbents’ research investments in radical technologies translate into product development and when these upstream investments may get voided by organizational inertia downstream. First, radical technologies can differ in how they conform to incumbents’ existing business models, impacting the extent to which the movement of research outputs toward development will be subject to inertial pressures. Second, incumbents can invest in a radical technology through a variety of modes (internal research, external research contracts, alliances, acquisitions). These modes represent unique combinations of who does research and who is involved in the decision for subsequent development, and, hence, differ in the extent to which they are shielded from inertial pressures. This difference helps explain why incumbents, despite responding to radical technologies, may still be unable to adapt, as well as what types of investments will be more effective in helping firms navigate technological change. Evidence from pharmaceutical incumbents’ pursuit of monoclonal antibodies and gene therapy offers strong support for our arguments.

Rahul Kapoor and Nathan Furr (2015), Complementarities and Competition: Unpacking the Drivers of Entrants' Technology Choices in the Solar Photovoltaic Industry , Strategic Management Journal, 36 (3), pp. 416436.

Abstract: Entrants in new industries pursue distinct technologies in hopes of winning the technology competition and achieving sustainable competitive advantage. We draw on the complementary assets framework to predict entrants’ technology choices in an emerging industry. Evidence from the global solar photovoltaic industry supports our arguments that entrants are more likely to choose technologies with higher technical performance and for which key complementary assets are available in the ecosystem. However, diversifying entrants are more likely to trade off superior performance for complementary asset availability whereas startup entrants are more likely to trade off complementary asset availability for superior performance. This difference is largely due to diversifying entrants with preentry capabilities related to the industry. The study offers a novel illustration of how complementarities and competition shape entry strategies.

Rahul Kapoor and Patia McGrath (2014), Unmasking the Interplay Between Technology Evolution and R&D Collaboration: Evidence from the Global Semiconductor Manufacturing Industry, 19902010 , Research Policy, 43, pp. 555569.

Abstract: Technological progress in an industry is enabled by the collective R&D efforts of suppliers, users and research organizations. In this study, we explore how the pattern of R&D collaboration within the industry community evolves over the technology life cycle. We propose that as the technology evolves from an initial emergence stage to subsequent stages of growth and maturity, there is a corresponding change in the opportunities and challenges confronting industry participants. This results in a shift not only in the relative propensities for internal and collaborative R&D, but also in the distribution of the different types of collaborative interactions involving research organizations, suppliers and users. The context for the study is the global semiconductor manufacturing industry from 1990 to 2010. During this period, the industry experienced exponential technological progress that was fueled by the deep ultraviolet (DUV) manufacturing technology. We draw upon a comprehensive archival dataset of more than 12,000 articles presented in industry technical conferences to analyze the pattern of collaborative R&D during the emergence, growth and maturity stages of the DUV technology. The observed trends in the semiconductor manufacturing industry point to intriguing shifts in the efforts and interactions among suppliers, users and research organizations as they collectively push the technology envelope forward.

Rahul Kapoor (2013), Persistence of Integration in the Face of Specialization: How Firms Navigated the Winds of Disintegration and Shaped the Architecture of the Semiconductor Industry , Organization Science , 24 (4), pp. 11952013.

Abstract: Although the stylized model of industry evolution suggests that firms transform from vertical integration to specialization over time, many industries still exhibit a continued persistence of integrated firms. In exploring this puzzle, I draw on detailed firmlevel data from the semiconductor industry to analyze how integrated incumbents, beyond shifting to the specialized mode, reconfigured in the face of industry’s vertical disintegration so as to coexist with the specialized firms. I propose and find that the incumbents who persist with vertical integration increase their emphasis on systemic innovations and transact with specialized firms in both upstream and intermediate markets. The valuecreating opportunities associated with integrated incumbents’ leveraging (a) their relative superiority in developing systemic innovations and (b) markets to pursue a broader menu of transactional choices may offset their costs of staying integrated. These firmlevel factors also determine the pattern of industry’s vertical disintegration and the extent of coexistence between integrated and specialized firms.

Rahul Kapoor and Joon Mahn Lee (2013), Coordinating and Competing in Ecosystems: How Organizational Forms Shape New Technology Investments , Strategic Management Journal, 34 (3), pp. 274296.

Abstract: We consider firms in the context of their business ecosystems and explore how differences in the ways in which firms are organized with respect to complementary activities affect their decision to invest in new technologies. We argue that, in addition to creating differences in incentives and bureaucratic costs, firmcomplementor organizational form plays an important role in the firm’s ability to coordinate accompanying changes in complementary activities so as to shape the benefits from investing early in the new technology. We test our predictions in the U.S. healthcare industry from 1995–2006. The study makes a strong case for viewing firms’ competitive strategies in the context of their business ecosystems and for the existence of an important link between firms’ coordination choices and their strategic investments.

Past Courses


The course is designed to meet the needs of future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technologybased industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of bothestablished and emerging firms competing through technological innovations, andstudy the key strategic drivers of value creation and appropriation in the context of business ecosystems. ,There is definitely an overlap in content with other courses in intermediate microeconomics, or managerial economics. Nevertheless, the treatment is sufficiently distinctive to make it complementary to those other treatments for a student who is particularly interested in economic change, or is otherwise interested in acquiring a broader view of economics.


The course is designed to meet the needs of the future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technologybased industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems.


Emerging enterprises, the focus in this course, are small, new, fastgrowing organizations. Their founders and managers face multifaceted challenges: how to assess the competitive position of their business model and develop a strategy; how to develop the internal organizational structure, culture, and policies for selecting and managing employees; and how to pursue global opportunities. We cover these challenges in separate modules on strategy, human and social capital, and global issues. The human and social capital module covers classic management challenges of aligning interests of the individual and the organization; managing individual psychological needs and social influences; and developing employee capabilities that provide competitive advantage. Also covered are unique challenges that yound organizations face, i.e. building an effective culture; recruiting, selecting, and retaining talent; building systematic approaches to motivating employees; coping with the stresses of rapid growth; and leveraging the benefits (and avoiding the liabilities) of the founder's powerful imprint. ,The strategy module covers fundamental issues central to the competitiveness of the enterprise. Because the strategy field is broad, MGMT 612 emphasizes topics and frameworks that are most relevant for younger firms, such as innovation, disruption, managing resource constraints, and building capabilities. However, a key insight of the module is the importance of seeing the playing field from the perspective of the competition. Thus, by the end of this section, students will have a robust grounding in strategy that will allow them to succeed, whether their career path leads to a Fortune 100 firm or a garage start up. ,The global module covers the emerging firm's decision about when (and whether) to internationalize. This decision must address which foreign markets to enter; the mode of entry; the sequence of moves to develop capabilities; what organizational form to choose; where to establish HQ; and how to adapt to the unique economic and institutional features of different markets. In all these issues, the emphasis is on how young, resourceconstrained firms can position themselves profitably in globally competitive markets. For the final project, student teams provide integrated analysis across the modules for an emerging enterprise of their choice.


The course is designed to meet the needs of future managers, entrepreneurs, consultants and investors who must analyze and develop business strategies in technologybased industries. The emphasis is on learning conceptual models and frameworks to help navigate the complexity and dynamism in such industries. This is not a course in new product development or in using information technology to improve business processes and offerings. We will take a perspective of both established and emerging firms competing through technological innovations, and study the key strategic drivers of value creation and appropriation in the context of business ecosystems. The course uses a combination of cases, simulation and readings. The cases are drawn primarily from technologybased industries. Note, however, that the case disucssions are mainly based on strategic (not technical) issues. Hence, a technical background is not required for fruitful participation.

Second Prize, Best Paper in Innovation Management (EBS Business School and MikroFORUM), 2014 Second Prize, Best Paper in Innovation Management (EBS Business School and MikroFORUM), 2013 First runnerup, INFORMSIndustry Studies Association Best Paper Prize, 2013 Outstanding Reviewer Award, Business Policy and Strategy Division of the Academy of Management, 2012 Winner, Academy of Management Technology and Innovation Management Division Past Chairs Emerging Scholar Award, 2011 Best Paper Proceedings, Academy of Management Meetings, 2010 Finalist, Sloan Industry Studies Dissertation Award, 2009 Best Paper Proceedings, Academy of Management Meetings, 2008 Best Paper Proceedings, Academy of Management Meetings, 2005 Carolyn Dexter Award Nominee, Academy of Management Meeting, 2005 INSEAD Ph.D. Fellowship, 2004 Nanyang Technological University Natsteel Gold Medal, 1997 Singapore Airlines – Neptune Orient Lines Undergraduate Scholarship, 1993

Knowledge @ Wharton

When Will Electric Cars Go Mainstream?, Knowledge @ Wharton 01/06/2017 The Rise of the Chatbots: Is It Time to Embrace Them?, Knowledge @ Wharton 06/09/2016 Why the Best Technology Isn’t Always the Winner, Knowledge @ Wharton 02/03/2016 Has ‘Disruptive Innovation’ Run Its Course? Not Yet…, Knowledge @ Wharton 07/09/2014 Collaborative Innovation Holds Key to Semiconductor Industry Growth, Knowledge @ Wharton 11/06/2013 What’s Wrong with This Picture: Kodak’s 30year Slide into Bankruptcy, Knowledge @ Wharton 02/01/2012 Sprint’s 4G Advantage: Game Changer or Not Enough to Call Home About?, Knowledge @ Wharton 06/23/2010 Carol Bartz’s Challenge at Yahoo: Choose a Path, Build a Team and Do It Fast, Knowledge @ Wharton 01/21/2009


Courses Taught

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