Delayed Product Introduction

We investigate the incentives of a monopolistic seller to delay the introduction of a new and improved version of his product. By analyzing a three-period model, we show that the seller may prefer to delay introducing a new product, even though the enabling technologies for the product are already available. The underlying motivation is analogous to that found in the durable goods monopolist literature – the seller suffers from a time inconsistency problem that causes his old and new products to cannibalize each other. Without the ability to remove existing stock of the old product from the market, shorten product durability, or pace research and development (R&D), he may respond by selling the new product later. We characterize the equilibria with delayed introduction, and study their changes with respect to market and product parameters. In particular, we show that delayed introduction could occur regardless of whether the seller can offer upgrade discounts to consumers, that instead, it is related to quality improvement brought about by the new product, durabilities, and discount factors. Further, we show that delayed introduction could bring socially efficient outcomes as well. Based on the insights of the model, we provide practical suggestions on pricing and policies

Technology Timing and Pricing In the Presence of an Installed Base

This paper studies a vendor.s timing and pricing strategies to tackle its own installed base when selling a newly improved product. We characterize the market with either a partly- or fully- covered installed base, consumers. relative willingness to pay for the newly improved version of the product, and their relative payoffs from delayed purchase. Instead of using the conventional assumption of constant consumer reservation price, we propose that if consumers already own an existing (old) version of a durable product, their willingness to purchase the newly improved version would increase over time. This effect, interweaving with consumer heterogeneity on valuation of quality and purchase history, may enable perfect intertemporal price discrimination (Salant 1989). We find that upgrade pricing may not be able to differentiate consumers with different purchase history when consumer heterogeneity is sufficiently high. Instead, the vendor would maximize its profit through intertemporal price discrimination, delayed product introduction, or pooling pricing. By overcoming the intractability of studying delayed product introduction in a market with heterogeneous consumers, this study analytically confirms Fishman and Rob.s conjecture (2000) that heterogeneity in consumers. valuation of quality may discourage a vendor to launch a new product. Particularly, consumers. anticipation of future price reduction can lead to delayed product introduction even when the extent of quality improvement embodied in the new product is high.New product introduction, intertemporal price discrimination, delayed product introduction, installed base, upgrade policy

Now or Never Revisited: An Analysis of Market Entry Timing for Successive Product Generation

Determining the optimal market entry timing for successive technological innovations is a critical decision for firms. Pioneering studies dealing with this issue have focused one-time sale (e.g., HDTV), and concluded that a new product should be introduced to the market either now or never, or now or at maturity. However, these prior studies do not examine another commonly seen business practice —revenue is generated from continuous services (e.g., Office 365). In this research, we derive the optimal market entry timing under both one-time sale and continuous service, and check whether the prior findings remain valid under today’s diverse market landscape. We find that under one-time sale, the optimal entry timing is not limited to now, maturity, or never; but it can also lie between now and maturity. More interestingly, our results show that the now or never rule holds only under a scenario not considered in the prior studies

Intel's XL Permit: A Framework for Evaluation

The paper develops a framework to evaluate permits granted to firms under the Environmental Protection Agency's Project XL � with emphasis on the novel air permit granted to the Intel Corporation. We describe the permit, the process that created it, and the types of costs and benefits likely to arise from this type of "facility-specific" regulatory arrangement. Among other things, the paper describes the permit's impact on environmental quality, production costs, transaction costs, and Intel's strategic market position. The paper also considers how an estimate of the costs and benefits � both to Intel and society � might be estimated. While facility-specific regulation typically conjures images of production cost savings as processes are re-engineered and low-cost abatement strategies pursued, the Intel case highlights perhaps a more important source of benefit: flexibility in the form of streamlined permitting. Flexibility in this form allows for accelerated product introductions, with potentially significant benefits to the firm and possibly to society.

The industrial organization of information goods industries

Ph.DDOCTOR OF PHILOSOPH

Diffusion of Subsidized ACTs in Accredited Drug Shops in Tanzania: Determinants of Stocking and Characteristics of Early and Late Adopters.

Many households in sub-Saharan Africa utilize the private sector as a primary source of treatment for malaria episodes. Expanding access to effective treatment in private drug shops may help reduce incidence of severe disease and mortality. This research leveraged a longitudinal survey of stocking of subsidized artemisinin combination therapies (ACTs), an effective anti-malarial, in Accredited Drug Dispensing Outlets (ADDOs) in two regions of Tanzania. This provided a unique opportunity to explore shop and market level determinants of product diffusion in a developing country retail market. 356 ADDOs in the Rukwa and Mtwara regions of Tanzania were surveyed at seven points between Feb 2011 and May 2012. Shop level audits were used to measure the availability of subsidized ACTs at each shop. Data on market and shop level factors were collected during the survey and also extracted from GIS layers. Regression and network based methodologies were used. Shops classified as early and late adopters, following Rogers' model of product diffusion, were compared. The Bass model of product diffusion was applied to determine whether shops stocked ACTs out of a need to imitate market competitors or a desire to satisfy customer needs. Following the introduction of a subsidy for ACTs, stocking increased from 12% to nearly 80% over the seven survey rounds. Stocking was influenced by higher numbers of proximal shops and clinics, larger customer traffic and the presence of a licensed pharmacist. Early adopters were characterized by a larger percentage of customers seeking care for malaria, a larger catchment and sourcing from specific wholesalers/suppliers. The Bass model of product diffusion indicated that shops were adopting products in response to competitor behavior, rather than customer demand. Decisions to stock new pharmaceutical products in Tanzanian ADDOs are influenced by a combination of factors related to both market competition and customer demand, but are particularly influenced by the behavior of competing shops. Efforts to expand access to new pharmaceutical products in developing country markets could benefit from initial targeting of high profile shops in competitive markets and wholesale suppliers to encourage faster product diffusion across all drug retailers

The Double Edged Blade of Consumerism & the Impossible Trinity – Bangladesh

This paper demonstrates how a change in monetary policy by lowering the interest rates can lead to a decline in savings in the short run. Almost perfect correlation coefficient exists between declined marginal savings and increased household desire to either invest or spend; hoarding proves to be minimal but there are limits to household investments. Corporate investment is also possibly affected by the new policy as consumerism and lower cost of capital encourages the firms to invest. Consumption also leads to indebtedness. However, the consumption patterns, capital flight and borrowing motives proves to be of alarming significance to the policy makers. In the long-run, monetary expansionary policy is forecasted to be ineffective. Keywords: Monetary policy, interest rate, Saving-Consumption-Investment Imbalance, Product Influx, Impossible Trinity, Consumption Pattern, Debt Motivations, Capital Fligh

IBM\u27s OS/2 Warp and its International Strategy

It is my intention, through the research in this thesis to present problems and solutions to normal business and marketing decisions that take place on a day-to-day basis in IBM Corporation. Also, OS/2 new version named Warp will be studied to an extent. OS/2 version 3 is not only a multitasking, multiprocessing operating system, but is also is IBM\u27s most recent and advance piece of software they have ever produce. It is a world of choices. Just as IBM hopes OS/2 warp will fulfill users operating systems needs, I will try to fulfill the needs of IBM to release a better product compare to Microsoft and also the changes IBM could do to dominate the market. There are a lot of choices these days when deciding which operating system to trust your data to, just as there are many studies conducted on how the operating system would perform in the marketplace. Whether people are just beginning, are familiar with computers, or have lots of technical expertise, what is on these pages might open the minds of some people on how to conduct regular business. This Thesis is divided into different sections as explained in the Table of Content. Section 1 is the Introduction: These sections explain in advance what IBM OS/2 Warp is. Section 2 is IBM Corporation: In this section, details of IBM and the company\u27s product line and annual sales are included. Section 3 is OS/2 and OS/2 Warp: This section explains the differences between new and old version and details of both. Section 4 is IBM Business Strategy. Section 5 is IBM\u27s Marketing Strategy. Finally, conclusion and references follow

Delaying Product Introduction: A Dynamic Analysis with Endogenous Time Horizon

Gezer S. Delaying Product Introduction: A Dynamic Analysis with Endogenous Time Horizon. Universität Bielefeld Working Papers in Economics and Management. Vol 04-2018. Bielefeld: Bielefeld University, Department of Business Administration and Economics; 2018.We consider a capital accumulating incumbent firm which produces an established product and has the option to introduce an improved substitute product to the market by incurring adoption costs. We find that depending on the initial capacities on the established market and the value of adoption costs, three scenarios are possible, namely introducing immediately, later or abstaining from product introduction. In case of delay of product introduction, the incumbent reduces capacities for the established product before the new product is introduced. We encounter Skiba points where the incumbent is indifferent between two of the three scenarios and use a bifurcation analysis in order to characterize the transition towards different steady states