Product development strategies in competitive markets
Abstract
The purpose of essay one in this dissertation is to determine which of a portfolio of projects a company should opt to fund given differences in project costs, profitability, and technical and market uncertainties. Our work on this project selection problem differs from those of past researchers in that the market uncertainties associated with competitive research strategies and the technical uncertainties associated with project completion times are modeled explicitly. Additionally, factors like firms' asymmetric efficiencies in completing projects and potential substitutability between different types of new products are included to add realism to the modeling effort and robustness to the model results. A game-theoretic model is developed to obtain insights into the project selection problem taking into account competitive reactions to a firm's choice of product development strategies. The model results on recommended project selection strategies for efficient and disadvantaged firms are discussed. Finally, the model is applied to see when a firm may find it optimal to announce its research strategy and, further, to examine the impact of patent-life and rate of imitation on a firm's choice of research strategies. The objective of essay two is to determine competitive product choices in an existing market and a related new market in a duopolistic framework. In the existing market, the firm could choose to stay with its old product, introduce an improved version of it, or exit. In the new market, the firm has an option of introducing an innovative product. The firm's product selection decisions in the two markets are assumed to depend on the interrelationship in the demand functions in the two markets, and the differential cost advantages of the two firms in producing the products, the nature of competition at the product choice and output stages, and the ability to credibly preempt the rival firm in product development. A game-theoretic approach is used to obtain insights into this decision-making process.
Degree
Ph.D.
Advisors
Kalwani, Purdue University.
Subject Area
Marketing
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