26 tires is documented in Table 7. The cord tire innovation removed the cross threads from cotton fabric used in the plies of tires. This eliminated the abrasion of cotton cord against cord, which was a major factor limiting tire mileage. 19 Although they significantly increased mileage, cords were initially two to three times as expensive as fabric tires, which as Table 7 indicates greatly limited their initial rate of adoption. Innovations by Goodyear and later Firestone in cord thickness, methods of impregnating the cords with rubber, machinery to cut the cord plies, and vulcanization processes gradually made cords more competitive and spurred their adoption, as reflected in Table 7. As a result, Goodyear and Firestone captured a substantial share of the market for cords (Allen [1949, pp. 37-39], Lief [1951, pp. 103-5]), which helped Goodyear to become the number one producer in the industry by 1916 (Allen [1949, pp. 39-40]). The balloon tire was an outgrowth of gum dipping, a new method of impregnating cords with rubber developed by Firestone. 20 Gum dipping contributed to a more resilient and flexible tire that enabled Firestone to widen the cross section of the tire. Firestone engineers discovered that with greater air capacity, the pressure in the tire could be greatly reduced, making it possible to lighten the tire through less plies and a lighter tread. The result was a smaller, squatter, softer tire resembling a balloon. While it was designed for a more comfortable ride, unexpectedly the balloon tire also greatly increased tire mileage. Firestone began selling balloon tires in late 1923. The tire’s requirement for new wheels and rims and modifications of new automobiles slowed adoption (Lief [1951, pp. 139-40]), but by 1925 Ford and other major manufacturers adopted it, and the tire caught on rapidly. Table 6 indicates that tire product innovation was dominated by the big four plus 19 Diamond Rubber, followed quickly by Goodrich, introduced cord tires in the U.S. in 1910 based on a license from Palmer Cord Tyre Company, the developer of the Palmer Cord tire in England. The Palmer patent did not block the development of alternative cord designs and many firms developed cord tires; 38 of 80 firms listed in Tufford  are denoted as producing cords. 20 A patent on the balloon tire was initially granted to an independent inventor, but the tire was later ruled to be a logical outgrowth of past design changes and the patent was overturned (Warner [1966, p. 103]).
27 Diamond, which was in the top five producers before it merged with Goodrich. These firms accounted for all the major tire design innovations. With the exception of one innovation on which Lee was given partial credit, they also accounted for every other major product innovation through 1940 that was credited to tire producers. This pattern persisted after 1940 as well, with the big four accounting for all the subsequent major tire product innovations on Warner’s list for 1940-1965 that were credited to tire firms. The rate of diffusion of the major tire design innovations is reflected in Table 7, which reports the annual percentage of tire sales by the clincher and straight-side designs and by fabric, high-pressure cord, and balloon tire construction for 1910-1933. Spurred on by licensing restrictions on the patented clincher tire, Goodyear and Firestone developed the straight-side in 1905. 21 Straight-sides were subsequently introduced by many tire producers, but as Table 7 indicates clincher tires continued to be used widely for many years, especially on lighter cars such as the popular Model T and Chevy. As noted above, cord tires also diffused gradually for many years until the balloon tire, which was adopted quickly. The other major innovations tended to diffuse rapidly. A separate industry developed to supply and improve carbon black, a chemical added to rubber to increase the life of the tire tread (Warner [1966, pp. 194-209]), thereby facilitating adoption of the latest advances. Patents on accelerators, antioxidants, and other rubber chemical innovations were generally easy to invent around through minor modifications in the new compounds (Warner [1966, p. 220]), and these chemicals were generally available from suppliers and widely used (Warner [1966, pp. 214-218]). 22 Among the tire cord innovations, long staple cotton was widely used from the outset of the industry, and first order high-twist cotton was part of a continuous stream of improvements whose adoption was not blocked by patents 21 The clincher tire was secured to the wheel by a thick bead of rubber around the inner edge of each side of the tire which fit under the inwardly curved flanges of the clincher rim. The straight-side used wire covered by rubber to form an inextensible bead that provided a more secure way to fix the tire to the rim and made it easier to change. Licensing restrictions on the clincher tire were later nullified by a ruling limiting clincher patents to bicycles. 22 Accelerators speed up the vulcanization of rubber (the application of heat under pressure to make rubber resilient to temperature changes and other forces), and antioxidants slow the aging of tread and sidewall rubbers. Secrecy rather than patents was the main device for appropriating returns from rubber chemical innovations (Warner [1965, p. 220]).
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Demonstrates why outstanding companies that had their competitive antennae up, listened astutely to customers, and invested aggressively in new technologies still lost their market dominance. Drawing on patterns of innovation in a variety of industries, this book argues that good business practices can, nevertheless, weaken a great firm.