Successive product generations: financial implications of industry release rhythm alignment
A central question for firms releasing successive generations of a product is whether they should pursue a market-driven approach and align own product releases to existing industry-level patterns. While an alignment with industry patterns enables firms to capitalize on general market receptivity, it may also entail dilution and competitive interference effects. Using data on the consumer electronics and automotive industries, we show that the effectiveness of such alignment depends on two additional timing-related decisions: the firm’s release regularity for successive product generations and its preannouncement timing. Firms benefit from alignment to the industry only if they release successive generations in a regular manner (to create anticipation) and refrain from early preannouncements (to avoid competitive counteraction). For all other combinations of release regularity and preannouncement timing, not aligning to the industry rhythm leads to higher levels of firm performance. Taken together, our findings enable a nuanced view of the interplay of timing-related launch decisions that provides actionable guidance for managers.
KeywordsSuccessive product generations Launch timing strategy Industry release rhythm alignment Release regularity New product preannouncements
The authors thank the entire JAMS review team for their constructive and insightful recommendations throughout the whole process. Moreover, the authors thank Johannes Hattula for his helpfulcomments and suggestions for improvement.
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