Selecting product development projects: pioneering versus incremental innovation strategies
Article Abstract:
The choice between pioneering or incremental innovation as a product development strategy is examined as a project selection problem. A pioneering project involves the development of a novel product while an incremental innovation project involves the modificationor improvement of an existing product. A game-theoretic framework that models competitive reactions to a firms' choice of development strategy while accounting for project completion time uncertainties is used to analyze the effect of firm factors such as differential efficiency, substitutability between pioneering and incremental products and first mover advantage on project choice. The results indicate that completion time efficiency relative to competitors directly influences each firm's project choice, while being a first mover does not. However, such an advantage enhances relative efficiency in completing alternate projects on a firms' selection strategy.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1993
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R&D cooperation between firms - a perceived transaction cost perspective
Article Abstract:
Transaction expenses are a major concern for companies considering entering into R&D arrangements with other organizations. Negotiating and transaction costs are often perceived as high. Research was conducted to examine the factors shaping this perception, specifically the technical attributes of the product being developed and the characteristics of the contractual arrangements governing product development. The study used Ch. Rotering's data obtained from 385 West German industrial companies and analyzed in his 1990 research. Results suggested that the perception of high transaction costs was being promoted by the uncertainty of companies, which was mostly due to their inexperience with cooperation, formality of agreements, and cooperation in the technological life cycle's early phases. The situational aspects, rather than the procedural aspects, of cooperative arrangements were also found to influence perceptions.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1992
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