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An innovation diffusion of successive generations by system dynamics — An empirical study of Nike Golf Company

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  • Kreng, Victor B.
  • Wang, Bang Jyun

Abstract

Most multi-generation models investigate the monotonously incremental market potential of later generation by expanding applications for the product, besides, neither corporate marketing variables nor the competitive environment is considered. However, a new product introduced is not in a vacuum and the potential is more likely to be dynamic due to other influencing factors. Moreover, they tend to conduct the forecasts through trend extrapolation which normally neglects the extreme cases as outliers. This study constructs an integrated multi-generation diffusion model based on system dynamics, which considers dynamic market potential with a competitive relationship among generations and products. In addition, this study investigates how the price could be included as an explanatory variable. To verify the proposed model, an empirical study, Nike SQ SUMO and Nike SQ SUMO 5000 golf clubs, is investigated, in which their product life cycles just happen to cover the most extreme outlier, the Great Recession in 2008 and 2009. As a result, this model provides better forecasts by capturing the causes of industry dynamics. Accordingly, Nike could have been able to avoid unnecessary capacity expansion in May of 2007, August of 2008 and May of 2009 although there are peak periods, and can prepare more in December of 2007 and 2008 for Christmas holiday.

Suggested Citation

  • Kreng, Victor B. & Wang, Bang Jyun, 2013. "An innovation diffusion of successive generations by system dynamics — An empirical study of Nike Golf Company," Technological Forecasting and Social Change, Elsevier, vol. 80(1), pages 77-87.
    • Handle: RePEc:eee:tefoso:v:80:y:2013:i:1:p:77-87
    DOI: 10.1016/j.techfore.2012.08.002
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    Cited by:

    1. Saurabh Panwar & P. K. Kapur & Ompal Singh, 2020. "Modeling technology diffusion: a study based on market coverage and advertising efforts," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 11(2), pages 154-162, July.
    2. Wang, Juite & Lai, Jung-Yu & Chang, Chih-Hsin, 2016. "Modeling and analysis for mobile application services: The perspective of mobile network operators," Technological Forecasting and Social Change, Elsevier, vol. 111(C), pages 146-163.
    3. Groesser, Stefan N., 2014. "Co-evolution of legal and voluntary standards: Development of energy efficiency in Swiss residential building codes," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 1-16.
    4. Zhao, Rui & Zhou, Xiao & Han, Jiaojie & Liu, Chengliang, 2016. "For the sustainable performance of the carbon reduction labeling policies under an evolutionary game simulation," Technological Forecasting and Social Change, Elsevier, vol. 112(C), pages 262-274.
    5. Goodwin, Paul & Meeran, Sheik & Dyussekeneva, Karima, 2014. "The challenges of pre-launch forecasting of adoption time series for new durable products," International Journal of Forecasting, Elsevier, vol. 30(4), pages 1082-1097.
    6. Duan, Wenqi & Khurshid, Adnan & Nazir, Naila & Khan, Khalid & Calin, Adrian Cantemir, 2022. "From gray to green: Energy crises and the role of CPEC," Renewable Energy, Elsevier, vol. 190(C), pages 188-207.
    7. Kazancoglu, Yigit & Sezer, Muruvvet Deniz & Ozkan-Ozen, Yesim Deniz & Mangla, Sachin Kumar & Kumar, Ajay, 2021. "Industry 4.0 impacts on responsible environmental and societal management in the family business," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    8. Shi, Xiaohui & Chumnumpan, Pattarin, 2019. "Modelling market dynamics of multi-brand and multi-generational products," European Journal of Operational Research, Elsevier, vol. 279(1), pages 199-210.
    9. Ji-Hye Kim & Eungoo Kang, 2023. "An Empirical Research: Incorporation of User Innovativeness into TAM and UTAUT in Adopting a Golf App," Sustainability, MDPI, vol. 15(10), pages 1-22, May.

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