Experience base, strategy-by-doing and new product performance
Date
2021
Authors
Chen, Liang
Wang, Mengmeng
Cui, Lin
Li, Sali
Journal Title
Journal ISSN
Volume Title
Publisher
John Wiley & Sons Inc.
Abstract
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-bydoing 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.
Description
Keywords
digital innovation, innovation performance, productdevelopment, product portfolio, strategy-by-doing
Citation
Collections
Source
Strategic Management Journal
Type
Journal article
Book Title
Entity type
Access Statement
License Rights
DOI
Restricted until
2099-12-31