Letting the market work for you: an evolutionary perspective on product strategy
✍ Scribed by Olav Sorenson
- Publisher
- John Wiley and Sons
- Year
- 2000
- Tongue
- English
- Weight
- 141 KB
- Volume
- 21
- Category
- Article
- ISSN
- 0143-2095
No coin nor oath required. For personal study only.
✦ Synopsis
Managers must choose to allocate scarce resources either to the maintenance of a range of products tailored to heterogeneous consumer preferences or to the efficient production of a small number of products. In addition, managers must choose the degree to which they periodically cull the product line. Vigorous selection removes poor performers from the product line, but this action simultaneously impairs the firm's ability to monitor changes in consumer preferences. Empirical evidence from the computer workstation industry reveals that the ideal choice of product variety depends on the competitive ecology of the industry. Product variety becomes less valuable as the total number of products on the market increases, but it increases in value as uncertainty makes the accurate prediction of demand difficult.