The Bell-Western Union Patent Agreement of 1789

Western-Union held a monopoly in long distance telegraphy in the US. In 1879 Western Union chose to forgo an opportunity to take control of the telephone, thereby sealing its own demise. Declining to pursue telephony was a calculated business decision. How can such a monumental failure be explained?

This case explores the challenges of managing competing opportunities in technologically vibrant industries. It offers a novel setting in which to explore issues of competitive advantage, innovation incentives, and the evolution of consumer utility.