Provision of Optional versus Standard Product Features in Competition

2017 ◽  
Vol 81 (3) ◽  
pp. 80-95 ◽  
Author(s):  
Subramanian Balachander ◽  
Esther Gal-Or ◽  
Tansev Geylani ◽  
Alex Jiyoung Kim
Keyword(s):  
Empirical Support ◽  
Product Line ◽  
Product Lines ◽  
Product Features ◽  
Car Market ◽  
Standard Product ◽  
Quality Image ◽  
Using Data ◽  
The Cost ◽  
The Relationship

Competing brands differ in the extent to which they offer a given feature as standard or optional in their product lines. In this article, the authors study the competitive basis for this difference in brands’ product line strategies. Specifically, they analyze the relationship between a brand's quality image and its propensity to offer a wider product line, from a relatively stripped-down base model to a more feature-rich model. They develop a conceptual framework and hypotheses by considering an analytical model with two vertically differentiated firms: They show that a low-quality firm would offer a feature as optional—that is, it would offer both a feature-added product and a stripped-down base product—if it chose to add the feature to its product. In contrast, a high-quality firm would offer the feature as a standard component unless the cost of the feature was high. This asymmetry in the propensity of high- and low-quality firms to offer optional and standard features with their products is tested using data from the U.S. passenger car market; the authors find empirical support for their model.

Virtual vs physical platform: organizational capacity and slack, strategic decision and firm performance

2020 ◽  
Vol 35 (12) ◽  
pp. 1983-1995 ◽  
Author(s):  
Hang Lee ◽  
Yung-Chang Hsiao ◽  
Chung-Jen Chen ◽  
Ruey-Shan Guo
Keyword(s):  
Firm Performance ◽  
Empirical Support ◽  
Organizational Capacity ◽  
Strategic Choice ◽  
Retail Industry ◽  
Content Type ◽  
Using Data ◽  
Virtual Platform ◽  
The Relationship ◽  
Better Than

Purpose This study aims to examine the relationship between organizational capacity, slack resource, platform strategic choice and firm performance. It also tackles the endogenous issues regarding the strategic choice of platform types. Design/methodology/approach This study uses Heckman’s two-stage procedures to examine the relationship between the variables. The sample in this study comes from Compustat annual company and segment files. The sample used in the main analysis consists of 252 individual corporations globally and 3,528 firm-year observations from 2004–2017. Findings The empirical results suggest that: (1) firms are more likely to develop physical platforms than virtual platforms when they possess higher levels of available slack, potential slack, research and development (R&D) capacity and marketing capacity; (2) in general, firms developing physical platforms perform better than firms developing virtual platforms after the endogeneity bias are controlled; and (3) firms that choose to develop physical platforms perform better than if they had chosen to develop virtual platforms. Research limitations/implications This study contributes to the platform research literature by proposing the endogenous role of platform type choice in firm performance in the context of the retail industry. Prior conceptual and theoretical platform studies have seldom focused on the retail industry through a strategic choice perspective. Furthermore, one of the contributions of this study is the derivation of empirical support for the research’s prediction using data from actual firms carried out by global physical and virtual platform companies. This study also presents many opportunities for further explorations on the relationship between firm strategic choice and firm performance in the context of platform retail industry. Practical implications The findings of this study suggest that firms must realize that their performance is not necessarily affected by these platform type choice determinants in terms of potential slack, available slack, R&D capacity and marketing capacity. By contrast, they should pay more attention to developing physical platforms if it is possible. The study findings indicate that although virtual platforms have grown rapidly because of the development of technology, firm performance is at all times superior when firms choose to develop physical platforms. Originality/value Prior platform studies have focused on the topic of network structure, platform architecture, pricing strategy, platform leadership and platform design and governance within the context of video game industry, software industry, hardware industry and telecommunications industry. Seldom of them focus on other industries through a strategic choice perspective. Furthermore, one of the contributions of this study is the derivation of empirical support for the research’s prediction using data from actual firms carried out by global physical and virtual platform companies.

scholarly journals A LITERATURE REVIEW ON FEATURE DIAGRAM PRODUCT COUNTING AND ITS USAGE IN SOFTWARE PRODUCT LINE ECONOMIC MODELS

2013 ◽  
Vol 23 (08) ◽  
pp. 1177-1204 ◽  
Author(s):  
RUBEN HERADIO ◽  
DAVID FERNANDEZ-AMOROS ◽  
JOSE A. CERRADA ◽  
ISMAEL ABAD
Keyword(s):  
Cost Savings ◽  
Economic Models ◽  
Automated Analysis ◽  
Software Product Line ◽  
Product Line ◽  
Product Lines ◽  
Software Product ◽  
Feature Diagram ◽  
The Cost ◽  
Line Engineering

In software product line engineering, feature diagrams are a popular means to represent the similarities and differences within a family of related systems. In addition, feature diagrams implicitly model valuable information that can be used in economic models to estimate the cost savings of a product line. In particular, this paper reviews existing proposals on computing the total number of products modeled with a feature diagram and, given a feature, the number of products that implement it. This paper also reviews the economic information that can be estimated when such numbers are known. Thus, this paper contributes by bringing together previously-disparate streams of work: the automated analysis of feature diagrams and economic models for product lines.

scholarly journals Trait dimensionality explains widespread variation in local adaptation

2015 ◽  
Vol 282 (1802) ◽  
pp. 20141570 ◽  
Author(s):  
Ailene MacPherson ◽  
Paul A. Hohenlohe ◽  
Scott L. Nuismer
Keyword(s):  
Gene Flow ◽  
Local Adaptation ◽  
Growth Rates ◽  
Environmental Conditions ◽  
Strong Correlation ◽  
Empirical Support ◽  
Reciprocal Transplant ◽  
Population Growth Rates ◽  
Using Data ◽  
The Relationship

All species are locked in a continual struggle to adapt to local ecological conditions. In cases where species fail to locally adapt, they face reduced population growth rates, or even local extinction. Traditional explanations for limited local adaptation focus on maladaptive gene flow or homogeneous environmental conditions. These classical explanations have, however, failed to explain variation in the magnitude of local adaptation observed across taxa. Here we show that variable levels of local adaptation are better explained by trait dimensionality. First, we develop and analyse mathematical models that predict levels of local adaptation will increase with the number of traits experiencing spatially variable selection. Next, we test this prediction by estimating the relationship between dimensionality and local adaptation using data from 35 published reciprocal transplant studies. This analysis reveals a strong correlation between dimensionality and degree of local adaptation, and thus provides empirical support for the predictions of our model.

A Model of Product Line Marketing

2021 ◽  
Author(s):  
Chuan He ◽  
Shaowei Ke ◽  
Xingtan Zhang
Keyword(s):  
Spillover Effect ◽  
Product Line ◽  
Marketing Effort ◽  
Product Lines ◽  
Product Line Design ◽  
Potential Market ◽  
High Utility ◽  
The Cost ◽  
Consumer Tastes ◽  
Line Design

Firms offer a variety of products to meet different customer needs. In many horizontally differentiated markets, prices are stable, and firms make infrequent adjustments to their product lines. Although prior research focused on product line design, we investigate how firms should allocate their marketing effort when their product lines are fixed. We propose a simple model to analyze product line marketing. Our model exhibits a flagship product effect in which the firm’s optimal marketing effort is concentrated, provided that the ratio between consumer tastes dispersion and the convexity of the cost of marketing effort is below a threshold. The flagship product is selected according to a marketing effort allocation index that measures the trade-off between a product’s markup and its potential market share. This result is robust with or without competition and whether prices are exogenous or endogenous. Firms often experience shocks to their marketing cost because of technological improvement or externalities. If a monopolist’s cost of marketing effort declines, she should place more emphasis on a low-utility, high-markup product. Conversely, if the cost increases, the monopolist may find it beneficial to focus her marketing effort on a high-utility, low-markup product. When multiproduct firms compete against each other, we show that if the opponent’s cost of marketing effort decreases, there can be a spillover effect, in which the firm benefits from the opponent’s cost reduction, thereby leading to a win-win situation. This paper was accepted by Dmitri Kuksov, marketing.

scholarly journals A Theory of Merger-Driven IPOs

2011 ◽  
Vol 46 (5) ◽  
pp. 1367-1405 ◽  
Author(s):  
Jim Hsieh ◽  
Evgeny Lyandres ◽  
Alexei Zhdanov
Keyword(s):  
Initial Public Offering ◽  
Firm Value ◽  
Empirical Support ◽  
Comparative Statics ◽  
Public Firm ◽  
Acquisition Strategy ◽  
Using Data ◽  
Valuation Uncertainty ◽  
Public Offering ◽  
The Cost

AbstractWe propose a model that links a firm’s decision to go public with its subsequent takeover strategy. A private bidder does not know a firm’s true valuation, which affects its gain from a potential takeover. Consequently, a private bidder pursues a suboptimal restructuring policy. An alternative route is to complete an initial public offering (IPO) first. An IPO reduces valuation uncertainty, leading to a more efficient acquisition strategy, therefore enhancing firm value. We calibrate the model using data on IPOs and mergers and acquisitions (M&As). The resulting comparative statics generate several novel qualitative and quantitative predictions, which complement the predictions of other theories linking IPOs and M&As. For example, the time it takes a newly public firm to attempt an acquisition of another firm is expected to increase in the degree of valuation uncertainty prior to the firm’s IPO and in the cost of going public, and it is expected to decrease in the valuation surprise realized at the time of the IPO. We find strong empirical support for the model’s predictions.

scholarly journals Company Characteristics, Dominant Personalities in Board Committees and Internet Financial Disclosures by Malaysian Listed Companies

2020 ◽  
Author(s):  
Ali Saleh Alarussi ◽  
Dhiaa Shamkhi
Keyword(s):  
Audit Committee ◽  
Listed Companies ◽  
Financial Disclosure ◽  
The Internet ◽  
Firm Age ◽  
Board Committees ◽  
Financial Disclosures ◽  
Using Data ◽  
The Cost ◽  
The Relationship

This paper investigates whether the internet financial disclosure can be explained by a company’s characteristics and the dominant personalities in board committees of the Malaysian listed companies. Ten hypotheses were tested using data collected from 194 Malaysian listed companies’ websites. Specifically, this paper examines the relationship between the internet financial disclosures (IFD) and the variables, namely internationality, leverage, foreign shareholders, level of technology, firm age, number of shareholders, listing status, dominant personalities in the audit committee, and chairmen of audit and nomination committees. It is found that the level of technology, firm age, number of shareholders and listing status significantly affect the level of IFD. However, the dominant personalities in the audit and nomination committees affect negatively the level of IFD in Malaysia. The study provides some evidence to support the signaling theory and the cost and benefit hypothesis in relation to internet disclosure.  

Case Mix Management: A Cautionary Note

1993 ◽  
Vol 6 (3) ◽  
pp. 47-50
Author(s):  
Michael J. Long
Keyword(s):  
Information System ◽  
Management Information System ◽  
Case Mix ◽  
Management Information ◽  
Cautionary Note ◽  
Hospital Administrators ◽  
Diagnostic Related Groups ◽  
Using Data ◽  
The Cost ◽  
The Relationship

Using data from a study that involved 500 U.S. acute care hospitals, the author examines the relationship between the profitability of Diagnostic Related Groups (DRGs) and their DRG weight, and the similarity/difference of the most/least profitable DRGs across hospital types. Hospital administrators are cautioned that to engage in case mix management, they must use a management information system that provides the data necessary for determining the cost of treating each patient type within their own institution, not information derived from other facilities or other systems.

scholarly journals Towards Incremental FSM-based Testing of Software Product Lines

2012 ◽  
Author(s):  
Maykon Luís Capellari ◽  
Itana Maria de Souza Gimenes ◽  
Adenilso da Silva Simão ◽  
Andre Takeshi Endo
Keyword(s):  
Embedded System ◽  
Finite State Machines ◽  
Product Line ◽  
Test Case ◽  
Test Cases ◽  
State Machines ◽  
Product Lines ◽  
Software Product ◽  
Finite State ◽  
The Cost

Software Product Line (SPL) is an approach which offers several benefits for organizations, such as significant reductions in the development and maintenance costs, reduced time-to-market, and personalized software products. In SPLs, the testing activity presents challenges due to characteristics of their development process. The cost of testing SPL is usually higher than the cost of testing traditional systems. SPLs foster the reuse of artifacts that include requirement specifications, code and models. Among different models used in an SPL, state-based models, such as Finite State Machines, are promising candidates to support the test case generation. Therefore, we propose a strategy to reuse test cases generated for different products of an SPL. Test cases are derived from Finite State Machines representing products instantiated from an SPL. The test cases generated for a product are reused when testing further products instantiated from the same SPL, in order to reduce the size of additional test cases. We illustrate our strategy in a case study using two SPLs of embedded system applications.

scholarly journals On the investigation of Risk Management Practices in Software Product Lines

2012 ◽  
Author(s):  
Luanna Lopes Lobato ◽  
Ivan do Carmo Machado ◽  
Paulo Anselmo da Mota Silveira Neto ◽  
Eduardo Santana De Almeida ◽  
Silvio Romero de Lemos Meira
Keyword(s):  
Embedded System ◽  
Management Practices ◽  
Finite State Machines ◽  
Product Line ◽  
Test Cases ◽  
State Machines ◽  
Product Lines ◽  
Software Product ◽  
Finite State ◽  
The Cost

Software Product Line (SPL) is an approach which offers several benefits for organizations, such as significant reductions in the development and maintenance costs, reduced time-to-market, and personalized software products. In SPLs, the testing activity presents challenges due to characteristics of their development process. The cost of testing SPL is usually higher than the cost of testing traditional systems. SPLs foster the reuse of artifacts that include requirement specifications, code and models. Among different models used in an SPL, state-based models, such as Finite State Machines, are promising candidates to support the test case generation. Therefore, we propose a strategy to reuse test cases generated for different products of an SPL. Test cases are derived from Finite State Machines representing products instantiated from an SPL. The test cases generated for a product are reused when testing further products instantiated from the same SPL, in order to reduce the size of additional test cases. We illustrate our strategy in a case study using two SPLs of embedded system applications.

scholarly journals Cooperazione, competizione o co-opetizione? Evidenze empiriche nel settore della sanitŕ

2009 ◽  
pp. 5-29
Author(s):  
Americo Cicchetti ◽  
Daniele Mascia ◽  
Francesca Pallotti ◽  
Alessandro Lomi
Keyword(s):  
Resource Dependence ◽  
Health Care Organizations ◽  
Interorganizational Relationships ◽  
Empirical Support ◽  
Niche Overlap ◽  
Theoretical Argument ◽  
Organizational Network ◽  
Geographical Regions ◽  
Using Data ◽  
The Relationship

- Extant research on interorganizational relationships has generally considered the propensity of organizations to collaborate and interorganizational rivalry as antithetic behaviours. In this paper we try to reconcile apparently contentious theoretical views on the relationship between interorganizational collaboration and competition, and propose a model that predicts the existence of a non-monotonic effect of similarity in resource dependence profiles on the propensity of interdependent organizations to collaborate and exchange resources. We test our theoretical argument by using data that we have collected on 91 health care organizations serving more than five million residents in one of the largest Italian geographical regions. Controlling for firm-specific resource complementarities and for differences in organizational forms, behavioural orientations and institutional constraints, we provide empirical support to our predictions. We discuss how this result may help to improve our ability to predict the network structure of organizational communities from the observation of individual exchange relations.Keywords: Competition, cooperation, organizational network, niche overlap.

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