The vast size and worldwide structure of the new demand made it impossible for any one firm to accommodate it. Accordingly an early mover, like Sony, had no guarantee to hold market share simply by being first. This created a need for Sony to capitalize on it market position. This was especially true because other companies like Matsushita had the option of moving in with a comparable product with lower prices, better features, and superior distribution. Matsushita's which marketed products under brand names that included Panasonic, Technics, National, and Quasar possesses the mass production capability and the broad distribution necessary meet the global demand. In addition Matsushita could schedule large production runs because they were willing to sell finished products to original equipment manufacturers (or OEMs) for sale under their labels. Sony on the other-hand was reluctant to build VCRs for sale under other companies labels, preferring to build up the Sony name and reputation and avoid sharing innovations with other firms.

As the battle between rival formats played out the primary players were Sony and JVC (although Philips continued to produce a different format in Europe for a decade). The primary argument is that the early lead and the final outcome of the battle reflect the deliberate actions of the main players. Strategic maneuvering by JVC in 1975-77 led to the alignment of producers to exploit the mass production and distribution capabilities necessary to account for the early dominance of VHS. In the 1980s the strategic alignment of producers of the complementary products further accelerated Beta's eventual demise.

Sony's management made some crucial mistakes which would be recognized years afterward. They should have worked harder to bring more companies into a "family" to support the Beta format. This was due to Sony's belief that their product was better and they knew that they were ahead of their rivals in VCR development. JVC, on the other-hand, launched a much more effective campaign to form an alliance behind the VHS format. JVC's parent company (Matsushita) moved aggressively to bring leading consumer electronics firms in Europe into the VHS family.

In the fall of1974 Sony began preparations for manufacturing without approaching other firms to entice them to adopt the Beta format. They did this to establish themselves as the early leader in the market (which they did successfully). Unfortunately this also made Sony less flexible, because altering their design would prove very costly to their manufacturing process. It was later that year that Sony first recognized Beta's major design flaw, its limited playing time. This issue became a problem during discussions with RCA, who had already test marketed its own product and found that a minimum two-hour playing time was necessary for commercial success. RCA recognized the Beta formats inadequacy of a one-hour playing time. They decided to join with JVC and Matsushita in declining to adopt the Beta format. Now it seemed time for Sony to modify the Betamax for two-hour recordings which resulted in the loss of valuable time and opportunities to continue their attempts at licensing their format. Of particular interest was when Hitachi approached them in 1975 but were turned away because Sony managers insisted that the Betamax was not yet perfected and thus not available for licensing.

Unlike Sony, who wanted to limit it's partners to licensing agreements, JVC pursued a strategy aimed at establishing as many partners as possible. They did so by establishing licensing and OEM agreements. JVC began this process shortly after seeing the Betamax demonstrated in the Spring of 1975 and had lined up Hitachi, Mitsubishi, and Sharp by the end of 1976. They agreed to supply Hitachi with VCRs when Sony would not and it was Hitachi who helped recruit Mitsubishi and Sharp.