bluuebunny/crossref_metadata_2025_split huggingface dataset:
Launch decisions and competitive reactions: an exploratory market signaling study
Authors: Hultink Erik Jan , Langerak Fred 
Published: September 2003

When firms launch a new product into the marketplace they often aim to find a balance between building scale and provoking extensive and quick competitive reactions. Competitors react to new products when they perceive the product introduction as hostile, committed or when they feel that the product entry will have a large impact on their profitability. The present study develops a framework that shows how strong and fast incumbents react to perceived market signals resulting from a new product's launch decisions (broad targeting, penetration pricing, advertising intensity and product advantage). The strength of the relationships between the launch decisions and the perceived market signals was expected to depend on one industry characteristic (i.e., market growth) and on one entrant characteristic (i.e., aggressive reputation).We distinguished three market signals in our framework: hostility, commitment and consequences. Signal hostility refers to the extent to which the approach used by an acting firm to introduce the new product is perceived hostile whereas the commitment signal refers to the extent to which incumbents perceive the entrant firm to be committed to the new product introduction. The consequence signal is defined as the incumbents' perception of the impact of a new product entry on their profitability. We tested our framework using cross‐sectional data provided by 73 managers in The Netherlands who recently reacted to a new product entry.The results clearly reveal which launch decisions create which market signals. For example, incumbents consider high advantage new products hostile and consequential. Penetration pricing and an intense advertising campaign are also considered hostile, especially in fast growing markets. Broad targeting is not perceived hostile, especially not when used by entrants with an aggressive reputation. In addition, this study explored the impact of three perceived market signals on the strength and speed of competitive reaction. The results reveal that perceived signals of hostility and commitment positively impact the strength of reaction, whereas the perceived consequence signal positively impacts the speed of reaction. The article concludes with the implications of our study for managers and academics. The relevance to managers was assessed from both the perspective of the incumbent firm that must defend, and that of the rival firm that is introducing the new product.
From experience: applying the risk diagnosing methodology
Authors: Keizera Jimme A. , Halman Johannes I.M. , Song Michael 
Published: September 2003

No risk, no reward. Companies must take risks to launch new products speedily and successfully. The ability to diagnose and manage risks is increasingly considered of vital importance in high‐risk innovation. This article presents the Risk Diagnosing Methodology (RDM), which aims to identify and evaluate technological, organizational and business risks in product innovation. RDM was initiated, developed and tested within a division of Philips Electronics, a multinational company in the audio, video and lighting industry. On the basis of the results the senior Vice President (R&D) of Philips Lighting decided to include the method in the company's standard innovation procedures. Since then, RDM has been applied on product innovation projects in areas as diverse as automobile tires, ship propellers, printing equipment, landing gear systems and fast‐moving consumer goods such as shampoo, margarine and detergents.In this article we will describe how Unilever, one of the world's leading companies in fast‐moving consumer goods, adopted RDM after a major project failure in the midnineties. At Unilever, RDM proved very useful in diagnosing project risks, promoting creative solutions for diagnosed risks and strengthening team ownership of the project as a whole. Our results also show that RDM outcomes can be used to build a knowledge base of potential risks in product innovation projects.
Upper management control of new product development projects and project performance
Authors: Bonner Joseph M. , Ruekert Robert W. , Walker Orville C. 
Published: September 2003

While some degree of freedom and flexibility is an essential ingredient to productive cross‐functional NPD teams, upper‐managers are faced with the challenge of instituting effective control mechanisms which head projects in the right strategic direction, monitor progress toward organizational and project goals, and allow for adjustments in the project if necessary. But too much or the wrong type of control may constrain the team's creativity, impede their progress, and injure their ultimate performance. Therefore, this study examines formal and interactive control mechanisms available to upper‐managers in controlling new product development (NPD) projects, and the relationship between these mechanisms and NPD project performance.Formal output and process controls are examined which consist of the setting and monitoring of outcomes, such as goals, schedule and budgets, and of processes and procedures, respectively. This study also looks at how the effectiveness of these control mechanisms may be contingent upon the degree of innovativeness in the project and the degree to which the project is part of a broad product program. In addition, the use of formal rewards for achieving team performance as opposed to rewards for individual achievement is investigated. Lastly, interactive controls are examined which consist of upper‐managers interacting directly with project members in the development of strategy and operational goals and procedures prior to the start of the project, and upper‐managers intervening in project decision‐making.Questionnaire data are collected on 95 projects across a variety of industries. The findings suggest that while NPD projects teams need some level of strategic direction concerning the objectives to be accomplished and the procedures to be followed, upper‐level managers can exert too much control. In particular, the findings showed a negative association between the use of upper manager‐imposed process controls and project performance. The findings also indicated that the degree to which upper‐managers intervened in project‐level decisions during the project was negatively related to project performance. However, the results showed support for the notion that early and interactive decision‐making on control mechanisms is important for effective projects. In particular, early team member and upper‐management involvement in the setting of operational controls, such as goals and procedures for monitoring and evaluating the project, was positively associated with project performance.This study provides additional insight into our understanding of upper‐management support in new product development. The study suggests that upper‐managers can over control with the wrong type of controls, and suggests effective ways of implementing participative and interactive control mechanisms.
From experience: leading dispersed teams
Authors: Smith Preston G. , Blanck Emily L. 
Published: September 2003

Although management can gain great performance benefit from colocating cross‐functional product development teams, colocation is becoming increasingly difficult to achieve as companies globalize and form alliances. Consequently, this article offers guidance to keep your development team functioning effectively even though it may be dispersed across town or around the world.We aim our suggestions at the team leader, but both team members and managers will find helpful ideas and become sensitive to critical issues. For example, management often underestimates the loss in team performance as the team disperses and incorrectly assumes that communication technologies alone will largely overcome the complications of distance.An effective team depends on open, effective communication, which in turn depends on trust among members. Thus, trust is the foundation, but it is also the very quality that is most difficult to build at a distance. For this reason and for several others that occur in the very front of the project, we suggest that if you can get your team together face‐to‐face at any time during the project, do it at the beginning. You can establish trust while you are planning the project together, writing the product specification, formulating working approaches, and creating communication protocols (for example, how long before an e‐mail must be answered?).Likewise, the most important maintenance activity during the middle of the project is retaining an effective level of trust, which is far easier than having to rebuild trust. In part, you accomplish this by “humanizing” the project: sharing team member biographical information, telling an occasional good‐natured joke, and knowing when a colleague's family member is in the hospital. We also cover communication technologies—which ones to select and why you need a variety of media. Although such technologies are necessary for running a dispersed team, they are not nearly as sufficient as many technology suppliers suggest.Another complication is that differences in culture tend to grow as the team spreads over greater distances, encountering different time zones, languages, ethnic groups, and thus corresponding values. Although such differences place challenges before the team, diversity also offers advantages to those who are sensitive to the facets of culture. Consequently, we break culture down into its components and suggest ways of working with each one.Although we tend to underestimate the complications of working at a distance today, in time, teams will learn the skills needed. In the meantime, the perceptive manager and team leader will pay special attention to building these skills.
The effectiveness of different mechanisms for integrating marketing and R&D
Authors: Leenders Mark A.A.M. , Wierenga Berend 
Published: September 2003

The integration of marketing and R&D is a major concern for companies that want to improve their new product performance (NPP). For this integration, companies are using mechanisms such as physical proximity, cross‐functional teams, and job rotation. This study examines the effectiveness of these mechanisms by developing a model that distinguishes between indirect effects of mechanisms on NPP (i.e., through a higher level of integration) and direct effects. The model is tested with data collected from 148 pharmaceutical companies. We were able to measure and compare the effectiveness of seven different integration mechanisms, which produced insights that are interesting and relevant for theory as well as practice.We found that housing marketing and R&D closer to each other and using an influential cross‐functional phase review board are the most effective mechanisms to foster integration. Equal remuneration and career opportunities for marketing and R&D and cross‐functional teams are somewhat less effective, whereas personnel movement and informal social group events contribute little. ICT appears to be a very effective tool for enhancing NPP. ICT not only fosters integration between marketing and R&D, but it also has an independent direct positive effect on NPP. Through ICT the day‐to‐day communication between the different parties in the companies becomes much easier, and we think that this fosters the knowledge creation process within marketing and R&D. For cross‐functional phase review boards we found a negative direct effect on NPP. Notwithstanding its strong positive effect on integration, a price is paid in terms of NPP. This may be related to the amount of formalization and complexity accompanying this mechanism.
The virtual customer
Authors: Dahan Ely , Hauser John R. 
Published: September 2003

Communication and information technologies are adding new capabilities for rapid and inexpensive customer input to all stages of the product development (PD) process. In this article we review six web‐based methods of customer input as examples of the improved Internet capabilities of communication, conceptualization, and computation. For each method we give examples of user‐interfaces, initial applications, and validity tests. We critique the applicability of the methods for use in the various stages of PD and discuss how they complement existing methods.For example, during the fuzzy front end of PD the information pump enables customers to interact with each other in a web‐based game that provides incentives for truth‐telling and thinking hard, thus providing new ways for customers to verbalize the product features that are important to them. Fast polyhedral adaptive conjoint estimation enables PD teams to screen larger numbers of product features inexpensively to identify and measure the importance of the most promising features for further development. Meanwhile, interactive web‐based conjoint analysis interfaces are moving this proven set of methods to the web while exploiting new capabilities to present products, features, product use, and marketing elements in streaming multimedia representations. User design exploits the interactivity of the web to enable users to design their own virtual products thus enabling the PD team to understand complex feature interactions and enabling customers to learn their own preferences for new products. These methods can be valuable for identifying opportunities, improving the design and engineering of products, and testing ideas and concepts much earlier in the process when less time and money is at risk. As products move toward pretesting and testing, virtual concept testing on the web enables PD teams to test concepts without actually building the product. Further, by combining virtual concepts and the ability of customers to interact with one another in a stock‐market‐like game, securities trading of concepts provides a novel way to identify winning concepts.Prototypes of all six methods are available and have been tested with real products and real customers. These tests demonstrate reliability for web‐based conjoint analysis, polyhedral methods, virtual concept testing, and stock‐market‐like trading; external validity for web‐based conjoint analysis and polyhedral methods; and consistency for web‐based conjoint analysis versus user design. We report on these tests, commercial applications, and other evaluations. © 2002 Elsevier Science Inc. All rights reserved.
A comparison of quality function deployment and conjoint analysis in new product design
Authors: Pullman Madeleine E. , Moore William L. , Wardell Don G. 
Published: September 2003

In this work, we compare two product design approaches, quality function deployment (QFD) and conjoint analysis, by applying each to the design of a new all‐purpose climbing harness for the beginning/intermediate ability climber that would complement a leading manufacturer's existing product line. While many of the optimal design features were the same under both approaches, the differences allow us to highlight the strengths of each approach. With conjoint analysis, it was easier to compare the most preferred features (i.e., ones that maximized sales) to profit maximizing features and also to develop designs that optimize product line sales or profits. On the other hand, QFD was able to highlight the fact that certain engineering characteristics or design features had both positive and negative aspects. This tradeoff could point the way to “out of the box” solutions. QFD also highlighted the importance of starting explicitly with customer needs, regardless of which method is used.Rather than competing, we view them as complementary approaches that should be conducted simultaneously; each providing feedback to the other. When the two approaches differed on the optimal level or importance of a feature, it appeared that conjoint analysis better captured customers' current preferences for product features while QFD captured what product developers thought would best satisfy customer needs. Looking at the problem through these different lenses provides a useful dialogue that should not be missed. QFD's ability to generate creative or novel solutions should be combined with conjoint analysis' ability to forecast market reaction to design changes. © 2002 Elsevier Science Inc. All rights reserved.
Managing radical innovation: an overview of emergent strategy issues
Authors: McDermott Christopher M. , O'Connor Gina Colarelli 
Published: September 2003

Despite differences in definitions, researchers understand that radical innovation within an organization is very different from incremental innovation [13,17,21] and that it is critical to the long‐term success of firms. Unfortunately, research has also shown that it is often difficult to get support for radical projects in large firms [14], where internal cultures and pressures often push efforts toward more low risk, immediate reward, incremental projects. Interestingly, we know considerably less about the effective management of the product development process in the radical than in an incremental context. The purpose of this study is to explore the process of radical new product development from a strategic perspective, and to outline key observations and challenges that managers face as they move these projects to market. The findings presented here represent the results of a longitudinal (since 1995), multidisciplinary study of radical innovation projects. A multiple case study design was used to explore the similarities and differences in management practices applied to twelve radical innovation projects in ten large, established North American firms. The findings are grouped into three high‐level strategic themes. The first theme, market scope, discusses the challenges associated with the pursuit of familiar versus unfamiliar markets for radical innovation. The second theme of competency management identifies and discusses strategic challenges that emerge as firms stretch themselves into new and unfamiliar territory. The final theme relates to the people issues that emerge as both individuals and the project teams themselves try to move radical projects forward in organizations that are not necessarily designed to support such uncertainty.A breadth of subtopics emerge within and across this framework relating to such ideas as risk management, product cannibalization, team composition, and the search for a divisional home. Taken together, our observations reinforce the emerging literature that shows that project teams engaging in radical innovation encounter a much different set of challenges than those typically faced by NPD teams engaged in incremental innovation.
Reverse Mortgages and the Liquidity of Housing Wealth
Authors: Mayer Christopher J. , Simons Katerina V. 
Published: September 2003

Housing wealth constitutes most of the non‐pension wealth of the elderly population. This study analyzes the potential of reverse mortgages to increase the income and liquid wealth of the elderly by identifying households with relatively high levels of housing equity. Because this article looks at the whole distribution of elderly households and considers debt as well as income, it finds a larger potential market for reverse mortgages than previous studies.Calculations from the 1990 Survey of Income and Program Participation and Census population estimates show that over six million homeowners in the United States could increase their effective monthly income by at least 20% by using a reverse mortgage. Of these, more than 1.3 million have no children. Furthermore, a reverse mortgage would allow over 1.4 million poor elderly persons to raise their incomes above the poverty line.
Preliminary Evaluation of the HECM Reverse Mortgage Program
Authors: Case Bradford , Schnare Ann B. 
Published: September 2003

This paper describes and evaluates the Home Equity Conversion Mortgage (HECM) insurance demonstration, designed to encourage the development of private reverse mortgage programs by insuring lenders against the risks associated with new mortgage lending programs and with reverse mortgages in particular. The paper evaluates demand for the program by analyzing the attributes of participating borrowers, their properties and the types of payment options chosen. It also presents several observations regarding participation by the financial community in the HECM demonstration, required counseling and legal and regulatory issues that may hamper the growth and development of reverse mortgage programs in general.The findings suggest strong demand for reverse mortgages among “house‐rich, cash‐poor” elderly homeowners, either to supplement inadequate current incomes or to provide a reserve against unexpected lump‐sum expenses. The flexible design of the HECM program addresses a wide variety of borrower financial needs, even though it imposes higher costs on lenders and servicers. The continued growth of the program, however, is hindered by a shortage of qualified housing counselors in some areas, as well as by a variety of legal and regulatory barriers.
Reverse Mortgages and Borrower Maintenance Risk
Authors: Miceli Thomas J. , Sirmans C.F. 
Published: September 2003

This paper develops a theoretical model of the problem of maintenance risk in reverse mortgages (RMs) and home equity conversion instruments generally. By maintenance risk, we refer to the incentive homeowners will have to reduce maintenance expenditures as their equity in the house falls during the term of the RM. The underlying reason for this tendency is the limited liability feature of RMs, given that a borrower's obligation to the lender at. maturity is limited to the value of the house.The results of the model show that lenders will respond to this problem either by limiting the amount of RM loans to guarantee that maintenance risk is not a threat, or by charging an interest rate premium to cover the expected cost of default. Unfortunately, there do not exist data to test the importance of maintenance risk as a possible limitation on the extent of the RM market.
Temporary Buydowns and Affordability
Authors: Guttentag Jack M. , Redstone Allan J. 
Published: September 2003

This paper is directed to a neglected aspect of the problem of home ownership affordability: the impact on affordability of temporary buy downs. A temporary buydown is an option offered to home buyers to reduce the mortgage payment in the early years of the loan. The borrower allocates cash up front to an escrow account from which funds are withdrawn monthly to supplement the borrower's mortgage payment.Temporary buydowns are underused partly because of the difficulty of determining whether, in any particular case, they will increase affordability. This paper develops a new instrument called the maximum affordable mortgage (MAX) which automatically allocates the buyer's available cash between buydown, down payment and other uses in a manner which maximizes affordability for the buyer, subject to whatever underwriting constraints the investor wishes to impose on payment graduation and/or the total size of the buydown.The lender originating the MAX must be able to solve a complex algorithm at the point of sale, but the complexity is all behind the scenes. Using a computer, a loan officer can quickly find the cash allocation that maximizes affordability. The power of the MAX in increasing affordability may be enhanced if it is combined with a buyup wherein the lender trades off lower points against a higher rate.