Competitive Product Introductions in Technologically Dynamic Environments

41 Pages Posted: 30 Apr 2007 Last revised: 29 Oct 2015

See all articles by Sreekumar R. Bhaskaran

Sreekumar R. Bhaskaran

Southern Methodist University (SMU) - Information Technology and Operations Management Department (ITOM)

Karthik Ramachandran

Georgia Institute of Technology - Scheller College of Business

Date Written: 2007

Abstract

New product development in several industries is driven by innovations in underlying technologies. Firms developing new generation products often face the following choice: they can either introduce a product based on a proven and immediately available technology, or delay product introduction to incorporate a superior, yet unproven, technology. In this paper, we study how competing firms introduce new products in such technologically fluid environments. We show that this technology selection decision for new-generation products depends on the evolution of technology trajectories, the additional risk involved in developing advanced versions and the competitive intensity in the end-product market. By staggering their new product introductions over time, firms are able to utilize introduction timing as an additional dimension to distance themselves from their rival. The optimal investment by a firm in product development, and its sensitivity with respect to competition, are also characterized. We also extend our analysis to consider the impact of market factors such as network effects and growth potential on the profitability of different introduction strategies.

Keywords: Introduction Timing, Technology Trajectories, Competition, Network Effects, Product Innovation, Operations Strategy

Suggested Citation

Bhaskaran, Sreekumar R. and Ramachandran, Karthik, Competitive Product Introductions in Technologically Dynamic Environments (2007). Available at SSRN: https://ssrn.com/abstract=983404 or http://dx.doi.org/10.2139/ssrn.983404

Sreekumar R. Bhaskaran (Contact Author)

Southern Methodist University (SMU) - Information Technology and Operations Management Department (ITOM) ( email )

Dallas, TX 75275
United States

Karthik Ramachandran

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States
(404) 894-8631 (Phone)

HOME PAGE: http://www.prism.gatech.edu/~karthik37/

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