Publication Type

Journal Article

Version

publishedVersion

Publication Date

7-2021

Abstract

Research Summary Strategy research views firms' diverse experience base as critical to new product success. It also champions strategy-by-doing in entrepreneurial settings. This study juxtaposes and bridges these two perspectives to better understand product development. We propose that while a firm's product portfolio diversity contributes to new product success only to a certain degree, design iteration-a postlaunch strategy-by-doing approach-is positively associated with new product performance. Our core contribution points to a complementary relationship: strategy-by-doing helps mitigate the capacity constraints problem that prevents firms from successfully adapting product development capabilities to a dynamic market. Our analysis of a sample of 2,182 nascent mobile apps from 564 top producers in the U.S. market supports our hypotheses. We discuss implications for product development, strategy-by-doing, and technology innovation literature.Managerial Summary Successful product development establishes firms' competitive advantage. The burgeoning digital economy increasingly prompts product development to depend on strategy-by-doing and requires firms to adapt a product's design over its lifecycle. Through analyzing a sample of newly launched mobile apps in the U.S. market, we find that while a firm's product portfolio diversity improves new product success to a certain degree, design iteration, a distinct approach to strategy-by-doing, underpins a new product's continual attractiveness to users. Moreover, frequent design iterations can overcome the barriers that innovator firms face when applying a diverse repertoire of experiences to product development.

Keywords

digital innovation, innovation performance, product development, product portfolio, strategy-by-doing

Discipline

Strategic Management Policy | Technology and Innovation

Research Areas

Strategy and Organisation

Publication

Strategic Management Journal

Volume

42

Issue

7

First Page

1379

Last Page

1398

ISSN

0143-2095

Identifier

10.1002/smj.3262

Publisher

Wiley

Additional URL

https://doi.org/10.1002/smj.3262

Download

Share

COinS