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New Product Strategy in Small Technology-Based Firms: A Pilot Study

Author

Listed:
  • Marc H. Meyer

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

  • Edward B. Roberts

    (Sloan School of Management, Massachusetts Institute of Technology, Cambridge, Massachusetts 02139)

Abstract

A pilot test is reported on a method for relating the degree of "newness" within a firm's portfolio of products and the firm's economic success. The embodied technology and market applications newness is measured in the sequences of 79 products developed and released by a sample of 10 small technology-based companies, each under $50 million in most recent sales. A two-dimensional "technology newness/market newness" grid is prepared for the product set of each firm, based on the conditions existent at the time of each product's development. Alternative weighting schemes are used to generate a "newness index" for each firm. The degree of "strategic focus" is shown to relate directly to corporate growth in that small firms with more restricted degrees of technological and market change in their successive products outperform companies with wide diversity. The evidence suggests, however, that some product "newness" is better than no "newness," and that more technological change can be effectively employed in small company product strategy than market change.

Suggested Citation

  • Marc H. Meyer & Edward B. Roberts, 1986. "New Product Strategy in Small Technology-Based Firms: A Pilot Study," Management Science, INFORMS, vol. 32(7), pages 806-821, July.
  • Handle: RePEc:inm:ormnsc:v:32:y:1986:i:7:p:806-821
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    File URL: http://dx.doi.org/10.1287/mnsc.32.7.806
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    Citations

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    Cited by:

    1. A. Heirman & B. Clarysse, 2004. "Do Intangible Assets and Pre-founding R&D Efforts Matter for Innovation Speed in Start-Ups?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/238, Ghent University, Faculty of Economics and Business Administration.
    2. V. Krishnan & Karl T. Ulrich, 2001. "Product Development Decisions: A Review of the Literature," Management Science, INFORMS, vol. 47(1), pages 1-21, January.
    3. Giarratana, Marco S., 2004. "The birth of a new industry: entry by start-ups and the drivers of firm growth: The case of encryption software," Research Policy, Elsevier, vol. 33(5), pages 787-806, July.
    4. Gambardella, Alfonso & Giuri, Paola & Luzzi, Alessandra, 2007. "The market for patents in Europe," Research Policy, Elsevier, vol. 36(8), pages 1163-1183, October.
    5. Roberts, Edward Baer., 1989. "Strategic transformation and the success of high technology companies," Working papers 3066-89., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    6. Giarratana, Marco S. & Fosfuri, Andrea, 2004. "Product strategies and startups' survival in turbulent industries: evidence from the security software industry," DEE - Working Papers. Business Economics. WB wb044816, Universidad Carlos III de Madrid. Departamento de Economía de la Empresa.
    7. Barry L. Bayus & Rajshree Agarwal, 2007. "The Role of Pre-Entry Experience, Entry Timing, and Product Technology Strategies in Explaining Firm Survival," Management Science, INFORMS, vol. 53(12), pages 1887-1902, December.
    8. Shobha S. Das & Andrew H. Van de Ven, 2000. "Competing with New Product Technologies: A Process Model of Strategy," Management Science, INFORMS, vol. 46(10), pages 1300-1316, October.
    9. repec:spr:scient:v:111:y:2017:i:3:d:10.1007_s11192-017-2376-0 is not listed on IDEAS
    10. Zahra, Shaker A., 1996. "Technology strategy and financial performance: Examining the moderating role of the firm's competitive environment," Journal of Business Venturing, Elsevier, vol. 11(3), pages 189-219, May.
    11. Hauschildt, Jürgen & Schlaak, Thomas M., 1999. "Zur Messung des Innovationsgrades neuartiger Produkte," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 510, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    12. Lopez, Luis E. & Roberts, Edward B., 2002. "First-mover advantages in regimes of weak appropriability: the case of financial services innovations," Journal of Business Research, Elsevier, vol. 55(12), pages 997-1005, December.
    13. López, Luis E. (Luis Eduardo), 1961- & Roberts, Edward Baer., 1997. "Effects of organization on financial innovation," Working papers 169-97. Working paper (Sl, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    14. Robert, Edward Baer. & Meyer, Marc H., 1991. "Product strategy and corporate success," Working papers 3239-91., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    15. Dina Cunha & Sandra T. Silva & Aurora A.C. Teixeira, 2013. "Are Academic Spin-Offs necessarily New Technology-Based firms?," FEP Working Papers 482, Universidade do Porto, Faculdade de Economia do Porto.
    16. Hauschildt, Jürgen, 1990. "Zur Messung des Innovationserfolgs: Revidierte Fassung eines Vortrags der 2nd TIM Conference of Technology Management, Hamburg, 10./11. Mai 1990," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 253, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    17. Lau Antonio, K.W. & Yam, Richard C.M. & Tang, Esther, 2007. "The impacts of product modularity on competitive capabilities and performance: An empirical study," International Journal of Production Economics, Elsevier, vol. 105(1), pages 1-20, January.
    18. Wang, Chi-Feng & Chen, Li-Yu & Chang, Shao-Chi, 2011. "International diversification and the market value of new product introduction," Journal of International Management, Elsevier, vol. 17(4), pages 333-347.
    19. Brockhoff, Klaus K. & Rao, Vithala R., 1991. "Issues in predicting the demand for a new technological product," Manuskripte aus den Instituten für Betriebswirtschaftslehre der Universität Kiel 270, Christian-Albrechts-Universität zu Kiel, Institut für Betriebswirtschaftslehre.
    20. Zahra Sorori Eshliki & Mojtaba Fallahnejad & Mehrdad Zolfi & Saber Khalili Esbouei, 2015. "Application of the Fuzzy Logic in Explanation of Effective Factors on Commercialization of Products (Empirical Evidence: Knowledge-Based Business of Incubators Centers of Iran North Region)," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(5), pages 115-126, May.
    21. repec:eee:ijrema:v:25:y:2008:i:2:p:119-128 is not listed on IDEAS

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