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Product Innovativeness and Entry Strategy: Impact on Cycle Time and Break‐even Time
Author(s) -
Ali Abdul,
Krapfel Robert,
LaBahn Douglas
Publication year - 1995
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/1540-5885.t01-1-1210030
Subject(s) - new product development , business , product (mathematics) , product lifecycle , industrial organization , quality (philosophy) , sample (material) , marketing , product innovation , business cycle , economics , mathematics , philosophy , chemistry , geometry , epistemology , chromatography , keynesian economics
New product development time, or cycle time, has become a critical competitive variable, particularly for small high‐tech manufacturing firms. The business press is filled with examples about large firms that have successfully reduced cycle time. This article investigates the relative impact of product innovation and entry strategy on cycle time and initial market performance of small firms. Using a sample of seventy‐three small manufacturing firms, Abdul Ali, Robert Krapfel, Jr., and Douglas LaBahn find that faster product development is associated with shorter break‐even time. Their results also indicate that these firms are achieving shorter cycle time not by sacrificing product quality, but by keeping the technical content of the product simple. Past research has not taken into account this relationship, and this may be one of the reasons why researchers have often suggested conflicting impact of entry strategy on market performance.