This article explains why Facit, a Swedish manufacturer of mechanical calculators, typewriters, and office furniture, collapsed in the shift from mechanical to electronic calculators in the early 1970s. Facit struggled to develop its own electronic calculators because its competencies were related to mechanics rather than electronics. Because the firm was located in a small company town in Sweden, it was difficult for Facit to access skilled labor related to electronics. Also, a lot of firms entered the industry with the shift to electronics and the increased competitive rivalry further augmented Facit's problems. The rapid development of integrated circuits in 1967-1972 implied that all these structural changes happened in a short period of time, putting firms such as Facit in a problematic situation.