Skip to main content

Competitive Intensity and Product Line Strategies in Technology-Based Industries

  • Chapter
  • 476 Accesses

Abstract

In this chapter, the analysis links competitive dynamics and product line extension literatures, and explores whether competitive responses to industry rivals in terms of product line extension are different when faced with different levels of competitive intensity over time. Although competitive dynamics may help understand the rationale underlying product portfolio adjustment, scholars from this stream of thought offer very limited arguments on the relationship between competition and the length of a firms’ product line. This chapter develops a theoretical framework which suggests that the competitive intensity-product line length relationship is not linear. It also illustrates insights into the mobile phone industry.

This is a preview of subscription content, log in via an institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   54.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Aaker D. A. and Joachimsthaler, E. 2000. Brand Leadership. Free Press: London.

    Google Scholar 

  • Axarloglou, K. 2008. Product line extensions: Causes and effects. Managerial and Decision Economics, 29(1): 9–21.

    Article  Google Scholar 

  • Bayus, B. L. and Putsis, W. 1999. Product proliferation: An empirical analysis of product line determinants and market outcomes. Marketing Science, 18(2): 137–153.

    Article  Google Scholar 

  • Bordley, R. 2003. Determining the appropriate depth and breadth of a firm’s product portfolio. Journal of Marketing Research, 40(1): 39–54.

    Article  Google Scholar 

  • Bröring, S., Cloutier, L. M. and Leker, J. 2006. The front end of innovation in an era of industry convergence: Evidence from nutraceuticals and functional foods. R&D Management, 36(5): 487–498.

    Article  Google Scholar 

  • Caves R., Fortunato M. and Ghemawat P. 1984. The decline of dominant firms, 1905–1929. Quarterly Journal of Economics, 99(3): 523–546.

    Article  Google Scholar 

  • Chen, M. J., Su, K. H. and Tsai, W. 2007. Competitive tension: The awareness-motivation-capability perspective. Academy of Management Journal, 50(1): 101–118.

    Article  Google Scholar 

  • Dens, N. and Pelsmacker, P. D. 2010. Attitudes toward the extension and parent brand in response to extension advertising. Journal of Business Research, 63(11): 1237–1244.

    Article  Google Scholar 

  • Draganska, M. and Jain, D. 2005. Product line length as a competitive tool. Journal of Economics and Management Strategy, 14(1): 1–28.

    Article  Google Scholar 

  • Ferrier, W. J., Fhionnlaoich, C. M., Smith, K. G. and Grimm, C. M. 2002. The impact of performance distress on aggressive competitive behaviour: A reconciliation of conflicting views. Managerial and Decision Economics, 23(4/5): 301–317.

    Article  Google Scholar 

  • Giachetti, C. and Marchi, G. 2010. Evolution of firms’ product strategy over the life cycle of technology-based industries: A case study of the global mobile phone industry, 1980–2009. Business History, 52(7): 1123–1150.

    Article  Google Scholar 

  • Gill, T. 2008. Convergent products: What tunctionalities add more values to the base? Journal of Marketing, 72(2): 46–62.

    Article  Google Scholar 

  • Hamel, G. 2002. Leading the Revolution. Boston, MA: Harvard Business School Press.

    Google Scholar 

  • Helfat, C. E and Raubitschek R. 2000. Product sequencing: Co-evolution of knowledge, capabilities and products. Strategic Management Journal, 21(10–11): 961–979.

    Article  Google Scholar 

  • John, D. R., Loken, B. and Joiner C. 1998. The negative impact of extensions: Can flagship products be diluted? Journal of Marketing 62(1): 19–32.

    Article  Google Scholar 

  • Jones, N. 2003. Competing after radical technological change: The significance of product line management strategy. Strategic Management Journal, 24(13): 1265–1287.

    Article  Google Scholar 

  • Kadiyali, V., Naufel V. and Chintagunta C. 1999. Product line extensions and competitive market interactions: An empirical analysis. Journal of Econometrics, 89(1\2): 339–364.

    Google Scholar 

  • Kekre, S. and Srinivasan, K. 1990. Broader product line: A necessity to achieve success. Management Science, 36(10): 1216–1233.

    Article  Google Scholar 

  • Kotler, P. 2000. Marketing Management. New York: Prentice-Hall.

    Google Scholar 

  • Krider, R. E. and Weinberg, C. B. 1998. Competitive dynamics and the introduction of new products; the motion picture timing game. Journal of Marketing Research, 35(1): 1–16.

    Article  Google Scholar 

  • Kumar, N. 2003. Kill a brand; keep a customer. Harvard Business Review, 81(12): 86–95.

    Google Scholar 

  • Lane V. and Jacobson R. 1995. Stock market reactions to brand extension announcements: The effects of brand attitude and familiarity. Journal of Marketing, 59(1): 63–77.

    Article  Google Scholar 

  • Morrin, M. 1999. The impact of brand extensions on parent brand memory structures and retrieval processes. Journal of Marketing Research, 36(4): 517–525.

    Article  Google Scholar 

  • Nijssen, E. J. 1999. Success factors of line extensions of fast-moving consumer goods. Journal of Marketing, 33(5\6): 450–470.

    Google Scholar 

  • Porter, M. E. 1980. Competitive Strategy. Free Press, New York.

    Google Scholar 

  • Putsis, Jr, W. P. 1997. An empirical study of the effects of brand proliferation on private label-national brand pricing behavior. Review of Industrial Organization, 2(3): 355–371.

    Article  Google Scholar 

  • Putsis, Jr, W. P. and Bayus, B. L. 2001. An empirical analysis of firm’s product line decision. Journal of Marketing Research, 38(1): 110–119.

    Article  Google Scholar 

  • Quelch, J. and Kenny, D. 1994. Extend profits, not product lines. Harvard Business Review, 72(6): 60–64.

    Google Scholar 

  • Scherer, F. and Ross, D. 1990. Industrial Market Structure and Economic Performance. Boston: Houghton Mifflin.

    Google Scholar 

  • Schmalensee, R. 1978. Entry deterrence in the ready-to-eat breakfast cereal industry. Bell Journal of Economics, 9(2): 305–327.

    Article  Google Scholar 

  • Shankar, V. 2006. Proactive and reactive product line strategies: Asymmetries between market leaders and followers. Management Science, 52(2): 276–292.

    Article  Google Scholar 

  • Shocker, A. D., Srivastava, R. K. and Rueckert, R. W. 1994. Challenges and Opportunities Facing Brand Management: An Introduction to the Special Issue. Journal of Marketing Research, 31(2): 149–158.

    Article  Google Scholar 

  • Shugan, S. M. 1989. Product assortment in a triopoly. Management Science, 35(3): 307–321.

    Article  Google Scholar 

  • Smith K. G. and Grimm, C. M. 1991. A communication-information model of competitive response timing, Journal of Management, 17(1): 5–23.

    Article  Google Scholar 

  • Smith, K. G., Ferrier, W. J. and Grimm, C. M. 2001. King of the hill: Dethroning the industry leader. Academy of Management Executive, 15(2): 59–70.

    Article  Google Scholar 

  • Steenkamp, J- B., Batra, R. and Alden, D. L. 2003. How perceived brand globalness creates brand value. Journal of International Business Studies, 34: 53–65.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Copyright information

© 2013 Claudio Giachetti

About this chapter

Cite this chapter

Giachetti, C. (2013). Competitive Intensity and Product Line Strategies in Technology-Based Industries. In: Competitive Dynamics in the Mobile Phone Industry. Palgrave Pivot, London. https://doi.org/10.1057/9781137374127_4

Download citation

Publish with us

Policies and ethics