Open AccessCost–benefit model for multi-generational high-technology products to compare sequential innovation strategy with quality strategy
Author(s) -
Hyoung Jun Kim,
Su Jung Jee,
So Young Sohn
Publication year - 2021
Publication title -
plos one
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.99
H-Index - 332
ISSN - 1932-6203
DOI - 10.1371/journal.pone.0249124
Subject(s) - cannibalization , quality (philosophy) , product (mathematics) , competitor analysis , competition (biology) , industrial organization , resource (disambiguation) , business , new product development , computer science , risk analysis (engineering) , marketing , ecology , computer network , philosophy , geometry , mathematics , epistemology , biology
In the rapidly changing high-tech industry, firms that produce multi-generational products struggle to consistently introduce new products that are superior in innovativeness. However, developing innovative products in a short time sequence period is likely to cause quality problems. Therefore, considering time and resource constraints, two kinds of strategies are commonly employed: sequential innovation strategy , sequentially introducing a new generation of technology product at every launch interval, ensuring timely innovativeness but with relatively uncertain quality, or quality strategy , intermittently introducing a new generation of products, together with a derivative model between generations to enhance the quality. In this study, we propose a framework for a cost–benefit analysis that compares these two strategies by considering competition between firms within a generation as well as that within a firm across multiple generations (i.e., cannibalization) throughout the launch cycle of high-tech products. We apply our proposed framework to the smartphone market and conduct a sensitivity analysis. The results are expected to contribute to strategic decision-making related to the introduction of multi-generational technology products.