This article presents a framework to help companies manage product rollovers, choose the best rollover strategy, and improve product rollovers. Companies need to plan their rollovers early, when they are planning the new product's introduction. First, they choose a primary rollover strategy, based in part on assessment of the uncertainties associated with the product's manufacturing, delivery, and market potential. Then they monitor product and market conditions. Finally, as product and market conditions change, they adopt a contingency strategy if necessary.
Companies can consider two primary strategies for product rollovers.
The less risky dual-product roll plans to sell both old and new products simultaneously for a period of time and can be implemented in a variety of ways. Finally, while contingency strategies enable companies to modify their primary strategies if appropriate, companies can improve their product rollovers significantly by exploiting opportunities to reduce the product and market risks of each new product in the first place. Hau Lee is the Kleiner, Perkins, Mayfield, Sequoia Capital Professor, department of industrial engineering and engineering management, Stanford University. Christopher Tang is a professor, Anderson School of Management, University of California, Los Angeles. All rights reserved.