The Emergence of Dominant Designs

Journal of Marketing, April 2006, Forthcoming

McCombs Research Paper Series No. MKT-02-05

47 Pages Posted: 5 Dec 2005

See all articles by Raji Srinivasan

Raji Srinivasan

University of Texas at Austin - Red McCombs School of Business

Gary L. Lilien

Pennsylvania State University - Institute for the Study of Business Markets

Arvind Rangaswamy

Pennsylvania State University - Department of Marketing

Abstract

In many product categories, technological evolution results in the emergence of a single product design that achieves market dominance. In this paper, we examine two questions: will a dominant design emerge in a new product category? If it does, how long will it be before a dominant design emerges? Thus, we simultaneously model the probability of emergence of a dominant design and the time of that emergence, conditional on its emergence. Our model incorporates the effects of several product-market characteristics including appropriability of the rents associated with the product, network effects, size of the product's value net, the standard setting process, radicalness of innovation and R&D (research and development) intensity on the probability and the time of dominant design emergence.

We use data for 63 office products and consumer durables to estimate a split population hazard model for the probability and time of emergence of an initial dominant design. We find that a dominant design is more likely to emerge with weak appropriability, with weak network effects, with low product radicalness and with high R&D intensity. Dominant designs that do emerge are likely to emerge sooner in product categories where there is weak appropriability, where there are a large number of firms in the value net, where standards are set by a de facto process and where there is low product radicalness The proposed model can be used to predict both the probability and the time of the emergence of a dominant design in a new product category.

Keywords: dominant design, market evolution, technological evolution, split population model

Suggested Citation

Srinivasan, Raji and Lilien, Gary L. and Rangaswamy, Arvind, The Emergence of Dominant Designs. Journal of Marketing, April 2006, Forthcoming, McCombs Research Paper Series No. MKT-02-05, Available at SSRN: https://ssrn.com/abstract=861304

Raji Srinivasan (Contact Author)

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

Gary L. Lilien

Pennsylvania State University - Institute for the Study of Business Markets ( email )

University Park, PA 16802-3306
United States
814-863-2782 (Phone)
814-863-0413 (Fax)

HOME PAGE: http://www.smeal.psu.edu/isbm/about/people/LILIEN.

Arvind Rangaswamy

Pennsylvania State University - Department of Marketing ( email )

University Park, PA 16802-3306
United States

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