Abstract
International new product launch speed is a crucial goal for firms, as it has major implications for their performance. The authors examine whether and how (1) the price and number of attributes of a new product, (2) the number of developed (emerging) countries in which it has been launched, and (3) the nature of the firm that originally launched it (i.e., multinational versus not) affect the new product’s speed of launch from developed countries to emerging ones (i.e., trickle-down) or vice versa (i.e., reverse innovation). In order to test the hypotheses, the authors use data on new product launches in the global packaged food industry in 2001–2014. The results indicate that a lower price accelerates trickle-down, while a higher price and more attributes accelerate reverse innovation. Further, having been launched in more countries and having been launched by a multinational firm both accelerate trickle-down and reverse innovation.
Highlights
International new product launch speed is a crucial goal for firms as it has major implications for their cash flows and profits (Hultink et al 1998; Verniers et al 2011; Yeniyurt et al 2007)
The most common trickle-down sequence is from the U.S to Mexico (129), while the most common reverse innovation sequence is from Mexico to the U.S (75)
International new product launch speed is a crucial goal for firms (Verniers et al 2011; Yeniyurt et al 2007)
Summary
International new product launch speed is a crucial goal for firms as it has major implications for their cash flows and profits (Hultink et al 1998; Verniers et al 2011; Yeniyurt et al 2007). Understanding the drivers of international new product launch speed is critical in today’s global marketplace, where multinational firms (MNCs, hereinafter) increasingly derive profits from the launch of new products in emerging countries (Bahadir et al 2015; Ernst et al 2015). MNCs face the risk of seeing local firms imitating in emerging countries products that MNCs originally launched in developed countries. MNCs are exposed to competition from emerging countries’ firms in their own domestic markets, with emerging countries’ firms rapidly launching in developed countries products that were originally launched in emerging countries (Ramamurti and Singh 2009; Sheth 2011). Managers of MNCs have to tackle three relevant problems: (1) adapting their new products to accelerate their launch in emerging countries; (2) preempting imitation of their new products by local firms in emerging countries; (3) defending their established positions in developed countries from new product launches by emerging countries’ firms. Theoretical and empirical issues have, so far, greatly limited our understanding of these problems
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