Iterate to Innovate: How Firms Strategize Design Iteration to Navigate the Uneven Landscape in the Global Mobile Application Industry

Abstract

Digital firms constantly iterate products to capture innovation opportunities. As digitalization transforms the global marketplace, firms all over the world must strategize iteration across various institutional contexts. My dissertation starts by establishing that firms need to be cautious about introducing iteration given its demand-side costs. Further, I find that frequent iterations enable digital firms to become innovative in uncertain institutional environments compared to stable environments. Moreover, iterating with regular rhythms help firms diversify across platform markets, but not so if firms diversify across heterogeneous country markets. Hence, both institutional conditions and market diversification must be considered when strategizing iteration.