IDEAS home Printed from https://ideas.repec.org/a/bla/stratm/v35y2014i9p1398-1409.html
   My bibliography  Save this article

Detecting the relationship between competitive intensity and firm product line length: Evidence from the worldwide mobile phone industry

Author

Listed:
  • Claudio Giachetti
  • Giovanni Battista Dagnino

Abstract

The way firms lengthen or shorten their product line with respect to rivals is regarded as one of the possible strategies firms can pursue to respond to competition. This article builds and tests hypotheses to study the effect of different levels of competitive intensity on product line length. The empirical analysis of data on 3,527 handset models introduced by 66 mobile phone vendors from 1994 to 2010 shows a consistent inverse U‐shaped relationship between competitive intensity and the firm's product line length. In this way, we pinpoint an interesting link between the product line extension literature and the competitive dynamics and competitive intensity perspectives. Copyright © 2013 John Wiley & Sons, Ltd

Suggested Citation

  • Claudio Giachetti & Giovanni Battista Dagnino, 2014. "Detecting the relationship between competitive intensity and firm product line length: Evidence from the worldwide mobile phone industry," Strategic Management Journal, Wiley Blackwell, vol. 35(9), pages 1398-1409, September.
    • Handle: RePEc:bla:stratm:v:35:y:2014:i:9:p:1398-1409
    DOI: 10.1002/smj.2154
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/smj.2154
    Download Restriction: no
    File URL: https://libkey.io/10.1002/smj.2154?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Brander, James A & Eaton, Jonathan, 1984. "Product Line Rivalry," American Economic Review, American Economic Association, vol. 74(3), pages 323-334, June.
    2. Richard Schmalensee, 1978. "Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 305-327, Autumn.
    3. Jan Boone, 2008. "A New Way to Measure Competition," Economic Journal, Royal Economic Society, vol. 118(531), pages 1245-1261, August.
    4. Sunder Kekre & Kannan Srinivasan, 1990. "Broader Product Line: A Necessity to Achieve Success?," Management Science, INFORMS, vol. 36(10), pages 1216-1232, October.
    5. Ming-Jer Chen & Ken G. Smith & Curtis M. Grimm, 1992. "Action Characteristics as Predictors of Competitive Responses," Management Science, INFORMS, vol. 38(3), pages 439-455, March.
    6. Kostas Axarloglou, 2008. "Product line extensions: causes and effects," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 9-21.
    7. Mason, Charlotte H. & Milne, George R., 1994. "An approach for identifying cannibalization within product line extensions and multi-brand strategies," Journal of Business Research, Elsevier, vol. 31(2-3), pages 163-170.
    8. Neil Jones, 2003. "Competing after radical technological change: the significance of product line management strategy," Strategic Management Journal, Wiley Blackwell, vol. 24(13), pages 1265-1287, December.
    9. Jan Boone, 2008. "A New Way to Measure Competition," Economic Journal, Royal Economic Society, vol. 118(531), pages 1245-1261, August.
    10. Walter J. Ferrier & Cormac Mac Fhionnlaoich & Ken G. Smith & Curtis M. Grimm, 2002. "The impact of performance distress on aggressive competitive behavior: a reconciliation of conflicting views," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(4-5), pages 301-316.
    11. Barry L. Bayus & William P. Putsis, Jr., 1999. "Product Proliferation: An Empirical Analysis of Product Line Determinants and Market Outcomes," Marketing Science, INFORMS, vol. 18(2), pages 137-153.
    12. Robert R. Wiggins & Timothy W. Ruefli, 2002. "Sustained Competitive Advantage: Temporal Dynamics and the Incidence and Persistence of Superior Economic Performance," Organization Science, INFORMS, vol. 13(1), pages 81-105, February.
    13. Michaela Draganska & Dipak C. Jain, 2005. "Product‐Line Length as a Competitive Tool," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 14(1), pages 1-28, March.
    14. Venkatesh Shankar, 2006. "Proactive and Reactive Product Line Strategies: Asymmetries Between Market Leaders and Followers," Management Science, INFORMS, vol. 52(2), pages 276-292, February.
    15. Thomas Hutzschenreuter & Florian Gröne, 2009. "Changing Vertical Integration Strategies under Pressure from Foreign Competition: The Case of US and German Multinationals," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 269-307, March.
    16. Kathryn Graddy, 1995. "Testing for Imperfect Competition at the Fulton Fish Market," RAND Journal of Economics, The RAND Corporation, vol. 26(1), pages 75-92, Spring.
    17. Lynn O. Wilson & John A. Norton, 1989. "Optimal Entry Timing for a Product Line Extension," Marketing Science, INFORMS, vol. 8(1), pages 1-17.
    18. Claudio Giachetti & Gianluca Marchi, 2010. "Evolution of firms' product strategy over the life cycle of technology-based industries: A case study of the global mobile phone industry, 1980-2009," Business History, Taylor & Francis Journals, vol. 52(7), pages 1123-1150.
    19. Steven M. Shugan, 1989. "Product Assortment in a Triopoly," Management Science, INFORMS, vol. 35(3), pages 304-320, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Khalil Assala & Suela Bylykbashi & Gilles Roehrich, 2021. "How To Measure Competitive Intensity?," Post-Print hal-03381232, HAL.
    2. Adomako, Samuel & Amankwah-Amoah, Joseph & Ahsan, Mujtaba, 2023. "Base of the pyramid orientation, imitation orientation and new product performance in an emerging market," Technovation, Elsevier, vol. 119(C).
    3. César García-Díaz & Gábor Péli & Arjen van Witteloostuijn, 2020. "The coevolution of the firm and the product attribute space," PLOS ONE, Public Library of Science, vol. 15(6), pages 1-25, June.
    4. Yanhui Zhao & Yufei Zhang & Joyce (Feng) Wang & Wyatt A. Schrock & Roger J. Calantone, 2020. "Brand relevance and the effects of product proliferation across product categories," Journal of the Academy of Marketing Science, Springer, vol. 48(6), pages 1192-1210, November.
    5. Zhou, Meihua & Angelopoulos, Spyros & Ou, Carol & Liu, Hongwei & Liang, Zhouyang, 2023. "Optimization of dynamic product offerings on online marketplaces: A network theory perspective," Other publications TiSEM 75d71155-88bf-4ff7-aba1-9, Tilburg University, School of Economics and Management.
    6. Gonzalo Maldonado-Guzmán & Víctor Manuel Molina-Morejón & Raymundo Juárez-del Toro, 2023. "Brand Management Measurement in Mexican Small Firms: Empirical Evidence," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(5), pages 1-7.
    7. Lee, Kyungyul & Kwon, Youngsun, 2018. "How does the competitive intensity affect the firm's product strategies?," 22nd ITS Biennial Conference, Seoul 2018. Beyond the boundaries: Challenges for business, policy and society 190406, International Telecommunications Society (ITS).
    8. Asimakopoulos, Grigorios & Whalley, Jason, 2017. "Market leadership, technological progress and relative performance in the mobile telecommunications industry," Technological Forecasting and Social Change, Elsevier, vol. 123(C), pages 57-67.
    9. Faisal Khurshid & Woo‐Yong Park & Felix T. S. Chan, 2020. "The impact of competition on vertical integration: The role of technological niche width," Business Strategy and the Environment, Wiley Blackwell, vol. 29(3), pages 789-800, March.
    10. Queder, Fabian, 2020. "Competitive effects of cable networks on FTTx deployment in Europe," Telecommunications Policy, Elsevier, vol. 44(10).
    11. Zhang, Jing A. & O'Kane, Conor & Chen, Guoquan, 2020. "Business ties, political ties, and innovation performance in Chinese industrial firms: The role of entrepreneurial orientation and environmental dynamism," Journal of Business Research, Elsevier, vol. 121(C), pages 254-267.
    12. Christos Genakos & Tobias Kretschmer & Ambre Nicolle, 2021. "Strategic confusopoly: evidence from the UK mobile market," CEP Discussion Papers dp1810, Centre for Economic Performance, LSE.
    13. Charles Hugh Wilkie, Dean & Mirzaei, Abas & Pham, Ngoc & Johnson, Lester W., 2022. "Reassessing product line breadth effectiveness: The role of heterogeneity, moderation, and cumulative effects," Journal of Business Research, Elsevier, vol. 149(C), pages 434-447.
    14. Huang, Yuanyuan & Xie, En & Li, Yu & Reddy, K.S., 2017. "Does state ownership facilitate outward FDI of Chinese SOEs? Institutional development, market competition, and the logic of interdependence between governments and SOEs," International Business Review, Elsevier, vol. 26(1), pages 176-188.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yanhui Zhao & Yufei Zhang & Joyce (Feng) Wang & Wyatt A. Schrock & Roger J. Calantone, 2020. "Brand relevance and the effects of product proliferation across product categories," Journal of the Academy of Marketing Science, Springer, vol. 48(6), pages 1192-1210, November.
    2. Kostas Axarloglou, 2008. "Product line extensions: causes and effects," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 9-21.
    3. Anocha Aribarg & Neeraj Arora, 2008. "—Interbrand Variant Overlap: Impact on Brand Preference and Portfolio Profit," Marketing Science, INFORMS, vol. 27(3), pages 474-491, 05-06.
    4. Sarangi, Subrat & Chakraborty, Abhishek & Triantis, Konstantinos P., 2021. "Multimarket competition effects on product line decisions – A multi-objective decision model in fast moving consumer goods industry," Journal of Business Research, Elsevier, vol. 133(C), pages 388-398.
    5. Charles Hugh Wilkie, Dean & Mirzaei, Abas & Pham, Ngoc & Johnson, Lester W., 2022. "Reassessing product line breadth effectiveness: The role of heterogeneity, moderation, and cumulative effects," Journal of Business Research, Elsevier, vol. 149(C), pages 434-447.
    6. Venkatesh Shankar, 2006. "Proactive and Reactive Product Line Strategies: Asymmetries Between Market Leaders and Followers," Management Science, INFORMS, vol. 52(2), pages 276-292, February.
    7. Yalcinkaya, Goksel & Aktekin, Tevfik & Yeniyurt, Sengun, 2020. "Out with the old: A Bayesian approach to estimating product modification rates," Journal of Business Research, Elsevier, vol. 118(C), pages 141-149.
    8. Zhe OuYang & Peng Cheng & Yang Liu, 2020. "The role of product line breadth, product pre-entry experience, and market uncertainty in explaining followers’ speed of feature entry," Review of Managerial Science, Springer, vol. 14(6), pages 1221-1249, December.
    9. S. Sriram & Pradeep K. Chintagunta & Ramya Neelamegham, 2006. "Effects of Brand Preference, Product Attributes, and Marketing Mix Variables in Technology Product Markets," Marketing Science, INFORMS, vol. 25(5), pages 440-456, September.
    10. Kai-Lung Hui, 2004. "Product Variety Under Brand Influence: An Empirical Investigation of Personal Computer Demand," Management Science, INFORMS, vol. 50(5), pages 686-700, May.
    11. Ayd{i}n Alptekinou{g}lu & Charles J. Corbett, 2008. "Mass Customization vs. Mass Production: Variety and Price Competition," Manufacturing & Service Operations Management, INFORMS, vol. 10(2), pages 204-217, August.
    12. Yener Altunbas & Michiel van Leuvensteijn & David Marques-Ibanez, 2013. "Competition And Bank Risk: The Role Of Securitization And Bank Capital," Working Papers 13005, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    13. Roberto Fontana & Lionel Nesta, 2007. "Product entry in a fast growing industry: The LAN switch market," Springer Books, in: Uwe Cantner & Franco Malerba (ed.), Innovation, Industrial Dynamics and Structural Transformation, pages 87-106, Springer.
    14. Horrace, William & Huang, Rui & Perloff, Jeffrey, 2009. "Variety: Consumer Choice and Optimal Diversity," Research Reports 149942, University of Connecticut, Food Marketing Policy Center.
    15. Barry L. Bayus & William P. Putsis, Jr., 1999. "Product Proliferation: An Empirical Analysis of Product Line Determinants and Market Outcomes," Marketing Science, INFORMS, vol. 18(2), pages 137-153.
    16. M. van Leuvensteijn, 2014. "The Boone-indicator: Identifying different regimes of competition for the American Sugar Refining Company 1890-1914," Working Papers 08-37, Utrecht School of Economics.
    17. Gabszewicz, Jean J. & Marini, Marco A. & Tarola, Ornella, 2017. "Vertical differentiation and collusion: Pruning or proliferation?," Research in Economics, Elsevier, vol. 71(1), pages 129-139.
    18. Yi-Ling Cheng & Takatoshi Tabuchi, 2018. "Product Proliferation and First Mover Advantage in a Multiproduct Duopoly," CIRJE F-Series CIRJE-F-1091, CIRJE, Faculty of Economics, University of Tokyo.
    19. Han, Chaodong & Porterfield, Tobin & Li, Xiaolin, 2012. "Impact of industry competition on contract manufacturing: An empirical study of U.S. manufacturers," International Journal of Production Economics, Elsevier, vol. 138(1), pages 159-169.
    20. Ram Bala & Sumit Kunnumkal & Milind G. Sohoni, 2016. "Evergreening and operational risk under price competition," Naval Research Logistics (NRL), John Wiley & Sons, vol. 63(1), pages 71-89, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:stratm:v:35:y:2014:i:9:p:1398-1409. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/0143-2095 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.