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Modeling Intercategory and Generational Dynamics for A Growing Information Technology Industry

Author

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  • Namwoon Kim

    () (Department of Business Studies, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong)

  • Dae Ryun Chang

    () (School of Management, Yonsei University, Seoul, Korea)

  • Allan D. Shocker

    () (College of Business, San Francisco State University, San Francisco, California 94132)

Abstract

Previous studies dealing with product growth have dealt only with substitution effects among successive generations of one product category and not with complementarity and competition provided by related product categories. Based on a broadened concept of the competitive information technology (IT) market, we develop a dynamic market growth model that is able to incorporate both interproduct category and technological substitution effects simultaneously. The market potential for each category or generation is treated as a variable rather than a constant parameter, which is typical of recently growing IT sectors such as wireless telecommunications. The model is calibrated, its plausibility discussed, and its face and predictive validity assessed using data on wireless telecommunications services from two Asian markets. Results show that the market potential (and sales growth) of one category or generation is significantly affected by others and by the overall structure of a geographic market. The model is shown to make relatively good predictions even when the data from recently introduced categories/generations are limited.

Suggested Citation

  • Namwoon Kim & Dae Ryun Chang & Allan D. Shocker, 2000. "Modeling Intercategory and Generational Dynamics for A Growing Information Technology Industry," Management Science, INFORMS, vol. 46(4), pages 496-512, April.
  • Handle: RePEc:inm:ormnsc:v:46:y:2000:i:4:p:496-512
    DOI: 10.1287/mnsc.46.4.496.12059
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    File URL: http://dx.doi.org/10.1287/mnsc.46.4.496.12059
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    References listed on IDEAS

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    Cited by:

    1. Chen, Yuwen & Carrillo, Janice E., 2011. "Single firm product diffusion model for single-function and fusion products," European Journal of Operational Research, Elsevier, vol. 214(2), pages 232-245, October.
    2. Sanjeev Dewan & Dale Ganley & Kenneth L. Kraemer, 2010. "Complementarities in the Diffusion of Personal Computers and the Internet: Implications for the Global Digital Divide," Information Systems Research, INFORMS, vol. 21(4), pages 925-940, December.
    3. Chien, Chen-Fu & Chen, Yun-Ju & Peng, Jin-Tang, 2010. "Manufacturing intelligence for semiconductor demand forecast based on technology diffusion and product life cycle," International Journal of Production Economics, Elsevier, vol. 128(2), pages 496-509, December.
    4. Saurabh Panwar & P. K. Kapur & Ompal Singh, 2019. "Modeling Technological Substitution by Incorporating Dynamic Adoption Rate," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(01), pages 1-24, February.
    5. Il-Horn Hann & Byungwan Koh & Marius F. Niculescu, 2016. "The Double-Edged Sword of Backward Compatibility: The Adoption of Multigenerational Platforms in the Presence of Intergenerational Services," Information Systems Research, INFORMS, vol. 27(1), pages 112-130, March.
    6. Gupta, Ruchita & Jain, Karuna, 2016. "Competition effect of a new mobile technology on an incumbent technology: An Indian case study," Telecommunications Policy, Elsevier, vol. 40(4), pages 332-342.
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    9. Samuel Sale, R. & Mesak, Hani I. & Inman, R. Anthony, 2017. "A dynamic marketing-operations interface model of new product updates," European Journal of Operational Research, Elsevier, vol. 257(1), pages 233-242.
    10. Peres, Renana & Muller, Eitan & Mahajan, Vijay, 2010. "Innovation diffusion and new product growth models: A critical review and research directions," International Journal of Research in Marketing, Elsevier, vol. 27(2), pages 91-106.
    11. Abhik Roy & Jagmohan Raju, 2011. "The influence of demand factors on dynamic competitive pricing strategy: An empirical study," Marketing Letters, Springer, vol. 22(3), pages 259-281, September.
    12. Franses, Ph.H.B.F. & Hernández-Mireles, C., 2006. "When Should Nintendo Launch its Wii? Insights From a Bivariate Successive Generation Model," ERIM Report Series Research in Management ERS-2006-032-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    13. Shi, Xiaohui & Li, Feng & Bigdeli, Ali Ziaee, 2016. "An examination of NPD models in the context of business models," Journal of Business Research, Elsevier, vol. 69(7), pages 2541-2550.
    14. Chumnumpan, Pattarin & Shi, Xiaohui, 2019. "Understanding new products’ market performance using Google Trends," Australasian marketing journal, Elsevier, vol. 27(2), pages 91-103.
    15. Stefan Stremersch & Eitan Muller & Renana Peres, 2010. "Does new product growth accelerate across technology generations?," Marketing Letters, Springer, vol. 21(2), pages 103-120, June.
    16. Jongsu Lee & Minkyu Lee, 2009. "Analysis on the growth of telecommunication services: a global comparison of diffusion patterns," Applied Economics, Taylor & Francis Journals, vol. 41(24), pages 3143-3150.
    17. Zhengrui Jiang & Dipak C. Jain, 2012. "A Generalized Norton-Bass Model for Multigeneration Diffusion," Management Science, INFORMS, vol. 58(10), pages 1887-1897, October.
    18. Huang, Yeu-Shiang & Lin, Shin-Hua & Fang, Chih-Chiang, 2017. "Pricing and coordination with consideration of piracy for digital goods in supply chains," Journal of Business Research, Elsevier, vol. 77(C), pages 30-40.
    19. 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.
    20. Hongmin Li & Dieter Armbruster & Karl G. Kempf, 2013. "A Population-Growth Model for Multiple Generations of Technology Products," Manufacturing & Service Operations Management, INFORMS, vol. 15(3), pages 343-360, July.
    21. Kim, Namwoon & Srivastava, Rajendra K., 2007. "Modeling cross-price effects on inter-category dynamics: The case of three computing platforms," Omega, Elsevier, vol. 35(3), pages 290-301, June.
    22. Yogesh V. Joshi & David J. Reibstein & Z. John Zhang, 2009. "Optimal Entry Timing in Markets with Social Influence," Management Science, INFORMS, vol. 55(6), pages 926-939, June.

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