New Product Launch Strategy: Evaluation Model

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ARTICLE IN PRESS

Technovation 26 (2006) 1244–1252 www.elsevier.com/locate/technovation

An evaluation model of new product launch strategy
Yi-Chia ChiuÃ, Benson Chen, Joseph Z. Shyu, Gwo-Hshiung Tzeng Graduate Institute of Business Administration, National Chung Hsing University, 250 Kuo-Kuang Road, Taichung 402, Taiwan

Abstract The objective of this article is to develop an empirically based framework for formulating and selecting a product launch strategy. Managers usually face Fuzzy decision scenarios. Traditional decision-making methods fail to satisfy a manager’s need in this regard. Thus, a hierarchical fuzzy multi-criteria decision-making (Fuzzy MCDM) method for evaluating a new product launch strategy is proposed in this study. In order to show the practicality and usefulness of this model, an empirical study of the Taiwan IC industry is demonstrated. The results show that the fast follower strategy is the most applicable. r 2005 Elsevier Ltd. All rights reserved. Keywords: Launch strategy; Product strategy

1. Introduction Launching new products to market quickly is a prerequisite for acquiring a competitive advantage. Today, even some product development managers face intense pressure to bring world-class products to market in record time. Many factors contribute to this pressure, including acceleration in the rate of technological development, improved mass communication, more intense competition due to the maturing of markets and globalization, fragmentation of the marketplace due to changing demographics, shorter product life cycles, and the escalating cost of R&D (Ali et al., 1995). This accelerated rate of product obsolescence increases the need to develop new products quickly enough to ensure timely introduction during the product life cycle (Coredero, 1991). To be successful, perhaps even to survive, a company must master product strategy and skillfully navigate through proper development, and application and management of a product strategy that separates enduring success from failure (Mcgrath, 2000) Conventional new product strategies often do not provide a sufficiently flexible perspective for analyzing the determinants of success in a highly competitive environment (Calantone and di Benedetto, 1990). Although, much ÃCorresponding author. Tel.: +886 3 5614388; fax: +886 3 5614387.

E-mail address: yichia@nchu.edu.tw (Y.-C. Chiu). 0166-4972/$ - see front matter r 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.technovation.2005.09.002

empirical work has shown the importance of strategy for success (Cooper, 1980), authors sometimes show their own results as limited by certain environmental forces in subsequent studies (cf., Cooper, 1990). A number of issues recur as consistent correlates of new product success. One of the common factors identified is the impact of the new product’s launch strategy on success (Hultink et al. 1997). Droge and Calantone (1996) examined the relationships among environment, strategy, structure and performance in the context of new product development. Muffatto (1999) introduced a platform strategy in product development. Ali et al. (1995) investigated the relative impact of product innovation and entry strategy on cycle time and initial market performance for small firms. Barczak (1995) proposed that a firm’s choices of new product strategy, structure and process are interrelated, as are the effects of these choices on NPD performance. Hultink and Robben (1999) and Hultink et al. (1997,1998) constituted a launch strategy and examined how such decisions impact new product performance. Although previous research has investigated the concept and contents of new product performance and product launch strategy, there is still no consensus on decisions related to how a launch strategy is selected and formulated. Moreover, while other success differentiators have been researched extensively, studies that derive the details of the anatomy of a launch strategy, and the...
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