Competency Reorientation: From Photographic Films to Cosmetics at Fujifilm, 1985-2018

For decades, scholars have used the notion of “competency trap” to theorize how prior organizational competencies induce rigidity and stasis and thus serve as liabilities facing radical technological changes. I explore a counter pathway in which incumbent organizations’ prior competencies, far from being liabilities, serve as core assets to address their adaptation challenges. I theorize this process through an in-depth historical case analysis of Japan-based multinational company Fujifilm, the only company from the analog photography industry to increase revenues since the triumph of the digital revolution by continuously entering non-photography markets. I relied on proprietary archival data and interviews to trace this transformation. The research uncovers antecedents and mechanisms facilitating this reorientation, emphasizing the dynamic reevaluation and flexible application of competencies in response to market changes. The study highlights the process of creating collective meanings of core competencies within firms and their consequences on subsequent social interactions, extending beyond the conventional focus on top management's cognitive decision-making processes.