Technological discontinuities often reshape competitive landscapes, not only by altering production capabilities but also by transforming market demand. These shifts can lead to significant changes in customer preferences and, in some cases, the emergence of entirely new customer segments. This study explores how incumbents' ability to recognize and respond to demand-side disruptions impacts their adaptation to new technological generations. We argue that incumbents’ prior market experiences with emerging customer needs influence their capacity to navigate demand-side changes and sustain competitive advantage. By analyzing longitudinal data on firm entry and exit across multiple technological generations in the computer printer industry, we provide empirical evidence that prior exposure to evolving customer segments contributes to differences in incumbents' performance during periods of technological change. Our findings highlight the importance of demand-side capabilities in explaining incumbent heterogeneity and long-term resilience in dynamic markets.
