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Competing after radical technological change: the significance of product line management strategy

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  • Neil Jones

Abstract

Research on firm performance after the introduction of a radical technological change has primarily concerned itself with differences between incumbents and entrants. This paper explores other factors that may influence firm performance over the longer term after a radical change—specifically, those related to product line management strategy. Following a radical change, a period of incremental technological change typically creates the opportunity for rapid development of new products. In such settings, strategies to manage multiple products, including families of related products that can be derived from a common platform, may be expected to impact competitive performance, especially over the longer term. The data for the study are from the telecommunications switching sector, specifically the private branch exchange (PBX) industry. Fifty‐six firms and over 240 new products were analyzed over 22 years. This study shows that incumbent–entrant‐based explanations of firm performance are incomplete. In particular, the results demonstrate that product line strategy explains significant additional variation in firm performance. The paper tests hypotheses linking both overall product line strategy and product platform strategy to firm performance. It finds that overall product introduction rates and product longevity can be linked to performance. It also shows that decomposing overall strategy into product platform strategy—rates of platform and derivative introduction, and platform longevity—can further increase explanatory power. In total, the results indicate that strategic prescriptions in the literature that emphasize development speed alone are oversimplified. They also suggest that differences in how relationships among products derived from a common platform are managed can contribute to competitive advantage and demand complex trade‐offs. Copyright © 2003 John Wiley & Sons, Ltd.

Suggested Citation

  • 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.
  • Handle: RePEc:bla:stratm:v:24:y:2003:i:13:p:1265-1287
    DOI: 10.1002/smj.354
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    Cited by:

    1. Lucio Fuentelsaz & Elisabet Garrido & Juan P. Maicas, 2015. "Incumbents, technological change and institutions: How the value of complementary resources varies across markets," Strategic Management Journal, Wiley Blackwell, vol. 36(12), pages 1778-1801, December.
    2. 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.
    3. Claussen, Jörg & Kretschmer, Tobias & Spengler, Thomas, 2010. "Market leadership through technology – Backward compatibility in the U.S. Handheld Video Game Industry," Discussion Papers in Business Administration 12716, University of Munich, Munich School of Management.
    4. 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.
    5. Ewald Scherm & Christian Maaß, 2006. "Zum Stellenwert der Netzwerkökonomik in der Strategie-/Marketingforschung —Eine Analyse empirischer Untersuchungen," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 17(1), pages 27-46, March.
    6. Richard F. J. Haans & Constant Pieters & Zi-Lin He, 2016. "Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1177-1195, July.
    7. Kristina Vaičiūtė & Aušra Katinienė & Gintautas Bureika, 2022. "The Synergy between Technological Development and Logistic Cooperation of Road Transport Companies," Sustainability, MDPI, vol. 14(21), pages 1-22, November.
    8. Cucculelli, Marco & Le Breton-Miller, Isabelle & Miller, Danny, 2016. "Product innovation, firm renewal and family governance," Journal of Family Business Strategy, Elsevier, vol. 7(2), pages 90-104.
    9. Kamolsook, Apinya & Badir, Yuosre F. & Frank, Björn, 2019. "Consumers' switching to disruptive technology products: The roles of comparative economic value and technology type," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 328-340.
    10. Dunk, Alan S., 2007. "Innovation budget pressure, quality of IS information, and departmental performance," The British Accounting Review, Elsevier, vol. 39(2), pages 115-124.
    11. Wong, Hiu-Kan & Ellis, Paul D., 2007. "Is market orientation affected by the product life cycle?," Journal of World Business, Elsevier, vol. 42(2), pages 145-156, June.
    12. Konshik Kim, 2018. "DIMINISHING RETURNS TO R&D INVESTMENT ON INNOVATION IN MANUFACTURING SMEs: DO THE TECHNOLOGICAL INTENSITY OF INDUSTRY MATTER?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(07), pages 1-27, October.
    13. Tobias Kretschmer & Jörg Claussen, 2016. "Generational Transitions in Platform Markets—The Role of Backward Compatibility," Strategy Science, INFORMS, vol. 1(2), pages 90-104, June.

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