Overview
Rapid technological change, stiff global competition, and shifting trend of global market opportunities force companies to invest in research and development. Qi and Jinhong (2014) argue that institutions invest heavily in innovation to overcome competition. While many businesses prefer being the first to introduce novel products into the market, others opt to delay their innovative goods. John and Saul (2013) allege that being the first to introduce an innovative product into the market has both merits and demerits.
Being the first to launch a product does not guarantee that one will benefit from the innovation. There are numerous advantages and risks associated with delaying innovative products. One of the advantages is that delaying innovative products gives a company an opportunity to develop superior product and learn from the mistakes of the rival companies (Dean, Lester & Lesley 2012).
On the other hand, delaying innovative products denies a company the chance to make significant sales before competitors come up with rival products. This proposal will focus on the risks and benefits of delaying innovative products. The topic is vital as it will act as a revelation to potential investors who plan to introduce innovative products into the market. The investors will know the market indicators that they should consider before launching products.
Aims
The primary purpose of carrying out this study is to understand why some companies prefer being the last to introduce innovative products in the market. The study also seeks to identify the costs of not introducing novel products into the market early. Identifying the merits and demerits of delaying innovative products will help organizations to make informed decisions.
Objectives
The goals of the study include:
- To determine the advantages of delaying innovative products
- To analyze the risks of delaying innovative products
- To find out how companies can cope with the risks related to launching novel products into the market late
Literature Review
According to Nakil (2014), companies should not release new products into the market to impress tech press and investors. Releasing innovative products does not necessarily confirm the ability of a company to innovate. Eric and Young-Ro (2012) maintain that it is imperative to understand the benefits of delaying innovative products. Delaying innovative products gives companies an opportunity to come up with superior market entry strategies.
Even though an organization can profit from a product by releasing it into the market before the competitors, the failure of such a product may have devastating repercussions on the image of a company. As a result, delaying innovative products gives a company a chance to learn. Du, Sibley and Wilkie (2012) aver that a company gains experience with every iteration that it produces. At some point, the company develops the correct product and formulates appropriate market entry policies.
Roger and Benedetto (2012, p. 529) affirm that the literature on ‘technology diffusion, adoption, and strategic management suggests that fear of obsolescence may cause consumers to hesitate to buy current technological products’. Consumers are particularly wary of technical goods like computers, tablets and smartphones whose usability depends on external hi-tech advancements, architectures, and standards.
Customers are hesitant of purchasing the products due to fear that they might get obsolete. Thus, delaying innovative products helps organizations to evade the cost of leapfrogging. Mueller et al. (2012, p. 1523) hold that delaying innovative products helps to ‘persuade consumers to wait for new products and accumulate buyers for future products’.
In other words, slowing innovative products helps to increase the sales volume of an organization. Rodriguez-Pinto, Rodriguez-Escudero and Gutierrez-Cillan (2012) argue that it is hard to attract scores of customers by releasing innovative products in successions. A company ought to hoard innovative products so that they appear attractive.
Delaying innovative products minimizes cannibalization of the available goods. Consumers are unlikely to continue to use certain products after knowing that a company intends to introduce substitute goods (Song, Zhao & Benedetto 2013). Thus, releasing of novel goods into the market endangers the existing ones.
The innovative products substitute the old goods. Delaying innovative products gives a company a chance to benefit from older products. Sung (2014, p. 92) posits that delaying innovative products ‘extends the economic life span of the old goods’. In return, it enhances the value of the old products to customers.
Apart from mitigating cannibalism, delaying innovative products allows a company to capitalize on the second-mover advantages. An organization learns from the competitors, therefore avoiding the mistakes that they commit. A company that delays innovative products does not invest heavily in research and development since it benefits from information spillovers.
Delaying innovative products deprives a business of the chance to recover the cost related to developing new merchandise. Wang and Xie (2014) argue that releasing novel goods enables companies to dig up a premium for being the pioneers in a market. Besides, being the first to release innovative products earns a company some degree of loyalty. Consumers believe that the first product to appear on the market is always genuine (Murray, Ju & Gao 2012).
Other products that come later are viewed as imitations. Hence, delaying innovative products may have injurious effects on the brand. It may be difficult for a company to get a substantial market share. Zhao et al. (2012) argue that delaying innovative products adversely affects the sales volume of an enterprise. Consumer needs keep on changing. Thus, organizations must continually develop novel products to exploit the changing needs.
Jakopin and Klein (2012) argue that businesses can use numerous dynamic capabilities to overcome the risks associated with delaying innovative products. Enterprise can use pricing strategy to overcome rivals. A company may lower the price of its innovative products to attract customers. Customers have a tendency to go for cheap products as long as they meet their needs. Thus, lowering the prices of innovative products would facilitate in acquisition of the market share.
Apart from the pricing strategy, an enterprise can liaise with influencers to market the products. For instance, a company can hire the best marketing firm to help in popularizing the products through social media. Companies can also exploit nostalgia as a way to overcome the risks associated with delaying innovative products. Markides and Sosa (2013) claims that customers are likely to buy more products ‘if asked to recall the past than when requested to think about future memories’.
Moreover, customers are likely to buy innovative products after recalling the nostalgic events that they encountered in the past. Currently, companies like Calvin Klein, Coca Cola and Internet Explorer use this strategy to market their products. They endeavor to remind clients about the past encounters, thus prompting them to purchase their products.
Methodology
Research Design
There is a lot of data that describes the risks and benefits of delaying innovative products. Therefore, this study will comprise an exploratory research aimed at comparing the varied variables that make innovators haste in releasing the products into the market. Through the exploratory design, the researcher will have an opportunity to make novel findings. De Massis et al. (2015, p. 12) argue that exploratory design has ‘less stringent methodological restrictions’.
Consequently, the researcher is at liberty to select the methodology that suits their research objectives. The researcher will be keen to ensure that they do not miss all crucial variables that help innovators to determine the appropriate time to release innovative products into the market.
The investigator will reduce the threshold of what they consider to be important to establish if there is a correlation between the variables that influence the time when innovators release the products into the market. The research will use case studies of varied first-mover and second-mover companies. The researcher will analyze the case studies to determine the factors that force the institutions to either be the first or the last to release products into the market.
Data Collection
Researchers use varied approaches to collecting data based on the intended purpose. Prior to collecting secondary data, it is imperative to ascertain the credibility of the source. Peer-reviewed journals, periodicals, and books are credible sources that can facilitate the collection of secondary data. For this study, the researcher will rely on peer-reviewed journals. The journals will not be more than four years old.
The researcher will use numerous pointers to gather information. The goal of the research will play a significant role in data collection. The data collected will help the investigator to accomplish the objectives of the study. The researcher will ensure that the data collected contributes to answering particular questions. For instance, the data should contribute to elucidating the risks of delaying innovative products.
Data Analysis
De Massis et al. (2015, p. 19) maintain, ‘Classification of different types of secondary analysis of qualitative data is not straightforward as there are almost as many kinds as there are examples’. In spite of the challenges, the researcher will use varied methods to analyze secondary data. The investigator will conduct an additional in-depth analysis of the secondary data to determine the nature of the challenges that both first-movers and second-movers encounter as they introduce products into the market.
The comprehensive analysis will entail comparing the external and internal forces that make institutions delay innovative products. The researcher will also use the meta-analysis technique to analyze data. The investigator will combine data from different sources to come up with a conclusion.
De Massis et al. (2015) allege that it is imperative to conduct additional subset analysis for data that appears to share common features. Therefore, the investigator will selectively focus on variables that seem to share common characteristics or differ significantly.
Ethical Considerations
De Massis et al. (2015, p. 21) claim, ‘The growing interest in re-using data makes it imperative that researchers consider obtaining consent, which covers the possibility of secondary analysis’. The analysis of secondary data does not entail a lot of ethical considerations. Nevertheless, it is imperative that the researcher observes all ethical procedures for conducting research.
The researcher will require understanding the terms and conditions of using case studies of different institutions. As a majority of the case studies will involve sensitive data, the researcher will not assume informed consent. Since it might be hard for the researcher to seek additional consent, the investigator will rely on professional judgment. The investigator will have to determine if re-use of the secondary data contravenes the agreement made between the primary researcher and the institutions under the study.
Project Plan
Reference List
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