Rolling Out New Products Across Country Markets: An Empirical Study of Causes of Delays

Abstract

Faced with the challenge of launching a new product into numerous countries, managers may view a sequential rollout as the prudent course of action. Rather than launching the product simultaneously in diverse countries, they may believe they can reduce risk by launching first in one or two countries, and then in others. However, this strategy overlooks the interplay between timeliness in international new product rollouts (INPR) and product success. George M. Chryssochoidis and Veronica Wong explore these issues in a study of 30 high-tech products launched into multiple European markets. Their study has three objectives: examining the incidence of timeliness and delays in simultaneous and sequential INPR; exploring the causes of delays in INPR; and assessing the effects that INPR timeliness and delays have on new product outcomes. They define timeliness in INPR as the availability of the new product to the firm's multiple target markets within the time frame planned by the company's managers. In other words, timeliness in this study reflects a company's capability for adhering to the schedule that management has established. Contrary to expectations, the results of this study do not reveal direct effects on timeliness in INPR from such sources as diversity of target markets or the firm's external environment. These results suggest that firms can achieve on-time, multicountry rollout of new products notwithstanding the legal, technological, and competitive environment. For the firms in this study, timeliness in INPR depends on such factors as sufficiency of marketing and technological resources (for example, to train sales staff, provide after-sales service, and adapt the product for multiple markets), proficiency in executing new product development activities, and effective communication between a company's headquarters and its business units and customers in different countries. Among the 22 product launches categorized as sequential rollouts in this study, 15 experienced delays. All eight of the simultaneous launches were timely. The results of this study indicate a positive relationship between timeliness in INPR and new-product success. Conversely, for the firms in this study, delays in INPR resulted in lower-than-expected product sales and profitability. In other words, the seemingly less risky sequential launch strategy may actually increase the risk of new product failure by delaying product rollout in multiple markets

Greasing the Wheels of Change: Bribery, Institutions, and New Product Introductions in Emerging Markets

“…Researchers have only recently begun to explore the strategic responses of firms through bribery (Iriyama et al, 2016), so our understanding of its effects remains confined to several aspects, namely entry modes (Uhlenbruck et al, 2006), exports (Lee & Weng, 2013), and capital investment (Birhanu et al, 2016). In turn, I focus on a strategic aspect (i.e., introduction of new products) that is critically linked to firms' long-term performance (Banbury & Mitchell, 1995;Schoonhoven et al, 1990;Wang & Chen, 2015) and show that bribery can positively influence firms' ability to cash in on their product innovations (Chryssochoidis & Wong, 1998). …”

“…Introduction of new products is an auspicious conclusion of a long-term and risky process (Katila & Ahuja, 2002) in which innovators must overcome many challenges in terms of research, development, production, and testing before hitting the markets (Danneels, 2002). Given these significant sunk costs, firms seek to avoid costly delays to the deployment of their products (Chryssochoidis & Wong, 1998) and are willing to pay for insurance (in the form of bribes) against any harmful interference in their operations (Leff, 1964;De Jong et al, 2012). While developing links with the current political elites delivers immediate benefits for firms seeking relief from bureaucracy (Li, Meng, Wang, & Zhou, 2008), in the long term, using bribery as a tool for building ties with bureaucrats provides firms with a more effective and complementary safeguard against future political changes (Darendeli & Hill, 2016) that might affect negatively their new product launches.…”

Global Takeoff of New Products: Culture, Wealth, or Vanishing Differences?

“…For instance, Chryssochoidis and Wong (1998) and Gielens and Dekimpe (2001) argue for a simultaneous launch to minimize product failure risk due to delayed rollouts and competitive environments. However, Kalish et al (1995) argue that conditions such as long product life cycles, small size, or slow growth of a foreign market make a waterfall strategy more preferable.…”

The role of seeding in multi-market entry

“…For example, Chryssochoidis and Wong (1998) found a positive relationship between the simultaneous launch of hightech products and profitability. Mascarenhas (1997) found that larger initial advertising budgets do not result in higher performance in international markets, implying that the firm can disperse its advertising budget, instead of focusing it on a limited number of regions.…”