Experience base, strategy-by-doing and new product performance
Research Summary Strategy research views firms' diverse experience base as critical to new product success. It also champions strategy-by-doing in entrepreneurial settings. This study juxtaposes and bridges these two perspectives to better understand product development. We propose that while a...
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| Main Authors: | , , , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2021
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| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/7219 https://ink.library.smu.edu.sg/context/lkcsb_research/article/8218/viewcontent/Strategic_Management_Journal___2020___Chen___Experience_base__strategy_by_doing_and_new_product_performance.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Research Summary Strategy research views firms' diverse experience base as critical to new product success. It also champions strategy-by-doing in entrepreneurial settings. This study juxtaposes and bridges these two perspectives to better understand product development. We propose that while a firm's product portfolio diversity contributes to new product success only to a certain degree, design iteration-a postlaunch strategy-by-doing approach-is positively associated with new product performance. Our core contribution points to a complementary relationship: strategy-by-doing helps mitigate the capacity constraints problem that prevents firms from successfully adapting product development capabilities to a dynamic market. Our analysis of a sample of 2,182 nascent mobile apps from 564 top producers in the U.S. market supports our hypotheses. We discuss implications for product development, strategy-by-doing, and technology innovation literature.Managerial Summary Successful product development establishes firms' competitive advantage. The burgeoning digital economy increasingly prompts product development to depend on strategy-by-doing and requires firms to adapt a product's design over its lifecycle. Through analyzing a sample of newly launched mobile apps in the U.S. market, we find that while a firm's product portfolio diversity improves new product success to a certain degree, design iteration, a distinct approach to strategy-by-doing, underpins a new product's continual attractiveness to users. Moreover, frequent design iterations can overcome the barriers that innovator firms face when applying a diverse repertoire of experiences to product development. |
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