IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v39y1993i3p255-274.html
   My bibliography  Save this article

Selecting Product Development Projects: Pioneering versus Incremental Innovation Strategies

Author

Listed:
  • Abdul Ali

    (Department of Marketing, College of Business and Management, University of Maryland, College Park, Maryland 20742)

  • Manohar U. Kalwani

    (Krannert Graduate School of Management, Purdue University, West Lafayette, Indiana 47907)

  • Dan Kovenock

    (Krannert Graduate School of Management, Purdue University, West Lafayette, Indiana 47907)

Abstract

In this paper, we investigate project selection choices of duopolists facing two alternatives: undertaking a "pioneering" type project (Type A) aimed to develop a highly innovative product, or an "incremental innovation" type project (Type B) aimed to develop a less innovative product such as the modification of an existing product. A key objective of our research is to examine how firm characteristics such as their differential efficiencies in completing projects, differences in the degree of substitutability between Type A and B products, and first mover advantages affect product development strategies. We develop a game-theoretic model to obtain insights into the project selection problem taking into account competitive reactions to a firm's choice of project development strategies and technical uncertainties associated with project completion times. We report model findings on recommended project selection strategies for efficient and disadvantaged firms. Further, we examine how a firm's choice of a Type A project is affected by an increase in the variance of the project completion time of a Type A project relative to that of a Type B project, while the ratio of their mean completion times is held constant.

Suggested Citation

  • Abdul Ali & Manohar U. Kalwani & Dan Kovenock, 1993. "Selecting Product Development Projects: Pioneering versus Incremental Innovation Strategies," Management Science, INFORMS, vol. 39(3), pages 255-274, March.
  • Handle: RePEc:inm:ormnsc:v:39:y:1993:i:3:p:255-274
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.39.3.255
    Download Restriction: no

    Citations

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


    Cited by:

    1. V. Krishnan & Karl T. Ulrich, 2001. "Product Development Decisions: A Review of the Literature," Management Science, INFORMS, vol. 47(1), pages 1-21, January.
    2. Sachon, Marc & Paté-Cornell, Elisabeth, 2002. "Managing technology development for safety-critical systems," IESE Research Papers D/465, IESE Business School.
    3. Avlonitis, George J. & Salavou, Helen E., 2007. "Entrepreneurial orientation of SMEs, product innovativeness, and performance," Journal of Business Research, Elsevier, vol. 60(5), pages 566-575, May.
    4. Henkel, Joachim & Rønde, Thomas & Wagner, Marcus, 2015. "And the winner is—Acquired. Entrepreneurship as a contest yielding radical innovations," Research Policy, Elsevier, vol. 44(2), pages 295-310.
    5. Zschocke, Mark S. & Mantin, Benny & Jewkes, Elizabeth M., 2013. "Mature or emerging markets: Competitive duopoly investment decisions," European Journal of Operational Research, Elsevier, vol. 228(3), pages 612-622.
    6. Hao Zhao, 2003. "R&D Competition Between an Incumbent and an Entrant: An Integrated Model of R&D Investment, Performance Improvement, and Time-to-Market," Review of Marketing Science Working Papers 2-2-1023, Berkeley Electronic Press.
    7. Weyant, John P., 2011. "Accelerating the development and diffusion of new energy technologies: Beyond the "valley of death"," Energy Economics, Elsevier, vol. 33(4), pages 674-682, July.
    8. Scott A. Shane & Karl T. Ulrich, 2004. "50th Anniversary Article: Technological Innovation, Product Development, and Entrepreneurship in Management Science," Management Science, INFORMS, vol. 50(2), pages 133-144, February.
    9. Henkel, Joachim & Rønde, Thomas & Wagner, Marcus, 2010. "And the Winner Is--Acquired: Entrepreneurship as a Contest with Acquisition as the Prize," CEPR Discussion Papers 8147, C.E.P.R. Discussion Papers.
    10. Janez Prašnikar & Tanja Rajkovic & Maja Vehovec, 2008. "Competencies Driving Innovative Performance of Slovenian and Croatian Manufacturing Firms," Working Papers 0802, The Institute of Economics, Zagreb.
    11. Cho, Keun-Tae & Kwon, Cheol-Shin, 2004. "Hierarchies with dependence of technological alternatives: A cross-impact hierarchy process," European Journal of Operational Research, Elsevier, vol. 156(2), pages 420-432, July.
    12. Christoph H. Loch & Stylianos Kavadias, 2002. "Dynamic Portfolio Selection of NPD Programs Using Marginal Returns," Management Science, INFORMS, vol. 48(10), pages 1227-1241, October.
    13. Raul O. Chao & Stylianos Kavadias, 2008. "A Theoretical Framework for Managing the New Product Development Portfolio: When and How to Use Strategic Buckets," Management Science, INFORMS, vol. 54(5), pages 907-921, May.
    14. Schicker, Günter & Strassl, Johann, 2015. "A call for action - warum sich das professionelle Managementdes Service Portfolios in der Industrie auszahlt," Weidener Diskussionspapiere 53, University of Applied Sciences Amberg-Weiden (OTH).

    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:inm:ormnsc:v:39:y:1993:i:3:p:255-274. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: http://edirc.repec.org/data/inforea.html .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.