New Product Innovation with Multiple Features and Technology Constraints

Authors:
Kathy A. Paulson Gjerde;Susan A. Slotnick;Matthew J. Sobel
Affiliations:
-;-;-
Venue:
Management Science
Year:
2002

Citing 3
Cited 3

The innovation diffusion process in a heterogeneous population: a micromodeling approach

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New product development: the performance and time-to-market tradeoff

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Demand Heterogeneity and Technology Evolution: Implications for Product and Process Innovation

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Timing Successive Product Introductions with Demand Diffusion and Stochastic Technology Improvement

Manufacturing & Service Operations Management
The Adoption of Multiple Dependent Technologies

Operations Research
Do Innovations Really Pay Off? Total Stock Market Returns to Innovation

Marketing Science

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Abstract

We model a firm's decisions about product innovation, focusing on the extent to which features should be improved or changed in the succession of models that comprise a life cycle. We show that the structure of the internal and external environment in which a firm operates suggests when to innovate to the technology frontier. The criterion is maximization of the expected present value of profits during the life cycle. Computational studies complement the theoretical results and lead to insights about when to bundle innovations across features. The formalization was influenced by extensive interviews with managers in a high-technology firm that dominates its industry.