Market Growth Rate Research Articles

The Relationships between Resource Configurations and Launch Strategies in Taiwan's IC Design Industry: An Exploratory Study

Within the last decade, the link between launch strategies and new product performance has been widely investigated. However, the relationship between resource configurations and launch strategies has received little attention. This study endeavors to fill that void by examining the relationships between resource configurations and launch strategy selections. In addition, this study investigates the moderating effects of market growth and competitiveness on the relationship between resources and launch strategies. Drawing on contingency theory and strategic studies, this study proposes that resource contingencies affect changes in launch strategies. This study also suggests that market characteristics play a contingent role in the relationships between the configurations of resources and launch strategy choices. Based on extensive studies reporting on market characteristics and their links to strategies, this study proposes that two market characteristics—market growth and competitiveness—are relevant for launch strategy decision making. Taiwan's integrated circuit (IC) design industry has been used as the analytical sample, as it has been identified as a promising sector for new product development. Based on the result of investigating 90 firms, four resource configurations are identified: (1) strategic and organizational abilities; (2) technological capabilities; (3) societal assets and goodwill; and (4) physical assets. Furthermore, two different launch strategies—innovative and product advantage and cost oriented—also are discovered. The results from a seemingly unrelated regression model reveal that technological capabilities and societal assets and goodwill contribute to the variation in the firms' choices of launch strategies. This study further conducted the simple slope analysis to observe the effect of the technological capabilities on the innovative and product advantage strategy under different levels of the market growth rate. The results interestingly showed that firms with technological capabilities demonstrated different degree of tendencies in employing this strategy in alignment with various market growth rates. The finding sheds some lights on the moderating role market characteristics play on the relationships between resource configurations and launch strategy selections. Academic implications and suggestions for practitioners also are provided.

Technological capability, social capital and the launch strategy for innovative products

The Launch strategy for innovative products is a crucial strategic typology adopted by many high tech firms, and which has been identified in prior research focusing on new product introduction to the market. However, the nexus between launch strategies and firm resources has gained little research attention. This article therefore aims to investigate the influence of technological capability and social capital, two key resources for innovation in high tech firms, on the adoption of a launch strategy for innovative products. Furthermore, prior research has revealed that market characteristics play a moderating role on the relationship between firm resources and company strategies; thus, this study also examines the moderating effect of market characteristics. This study takes Taiwan's integrated circuit design firms as the analytical sample. Based on a sample of ninety companies, two interesting findings have been found. First, both technological capability and social capital are associated positively with the launch strategy for innovative products. Second, while the market growth rates increase, the positive relationship between technological capability and the launch strategy for innovative products becomes weaker.

The Dynamic Nature of Survival Determinants in E-Commerce

Longitudinal data on 460 e-tailers are used to test the dynamic effects of survival determinants in e-commerce. The model includes elements of competitive strategy, industry structure, firm and product characteristics, and the macro environment. The study demonstrates that very few of the factors affecting survival have a constant effect over time. For example, order of entry advantages are observed, but they are short-lived meaning that e-tailers cannot rely on early entry as a strategic move in the long run. This finding reconciles the arguments about the existence of pioneering advantages in the empirical literature. Retailers benefit from multiple channels throughout their lives. E-tailers with more media presence also seem to survive longer. Being publicly owned and selling products with digital characteristics present advantages for e-tailers only in the beginning years, but they are not sustainable over long time periods. Survival chances decrease with higher competitive density, market growth rate, and equity market level at the time of entry. Conversely, economic growth tends to increase survival chances. The study also finds an inverted-U relationship between the hazard of exit and firm age. The conclusion section discusses the implications of the time-varying nature of survival determinants.

Does the Financial Distress Factor Drive the Momentum Anomaly?

This paper brings together the evidence on two asset pricing anomalies - continuation of prior returns (momentum) and the market pricing of distressed firms. Our empirical analysis demonstrates both these effects are driven by market underreaction to bad news, and that momentum is largely subsumed by our distress risk factor. We also extend the extant literature on the market pricing of distress risk by considering this conditional on market state and GDP growth rate, and find little evidence that financial distress risk is a priced risk factor.

Export and domestic sales: their interrelationship and determinants

We examine the interrelationship between export and domestic sales. Our expectation is that they are simultaneously determined, and as such should not be examined in isolation. We also investigate how firm factors—such as R & D and advertising investments—and external factors—such as market growth and exchange rate changes—impact export and domestic sales. Using a non-recursive system of equations, we test our arguments on a representative sample of Spanish manufacturing firms between 1990 and 1997. We find significant interrelationships between export and domestic sales with striking differences between Spanish-owned firms and foreign-owned firms operating in Spain. For Spanish-owned firms, domestic and export sales are complements. These firms appear to focus on the domestic market and strength in the domestic market drives their export sales. In contrast, domestic and export sales are substitutes for foreign-owned firms. These firms' export strategies appear subsumed under strategies of managing a multinational network in which the focus is sales outside of Spain. We discuss the importance of these findings for understanding and managing export strategies. Copyright © 2005 John Wiley & Sons, Ltd.

The Nature and Success of Emerging High Potential Entrepreneurships in Nigeria

This study examined the nature and success factors of the Emerging High Potential Entrepreneurships (EHPEs) in Nigeria through the study of thirty randomly selected companies in three Eastern States of Nigeria. The findings show that (a) this new set of firms cover a wide range of the panoply of autonomous consumption of the people of Nigeria, (b) the basic production inputs are reasonably locally sourced, (c) entrepreneurs have the necessary educational and job experience backgrounds, and (d) the chosen lines of business have high market growth rates. These features underscore the fact that Nigeria is set on the path of industrial growth.

The dynamic effects of general purpose technologies on Schumpeterian growth

General purpose technologies (GPTs) are drastic innovations characterized by pervasiveness in use and innovational complementarities. The dynamic effects of a GPT are analyzed within a quality-ladders model of scale-invariant Schumpeterian growth. The diffusion path of a GPT across a continuum of industries is governed by S-curve dynamics. The model generates a unique, saddle-path long-run equilibrium. Along the transition path, the measure of industries that adopt the new GPT increases, consumption per capita falls, and the interest rate rises. The growth rate of the stock market depends negatively on the rate of GPT diffusion and the magnitude of the GPT-ridden RD and positively on the rate of population growth. It also follows a U-shaped path during the diffusion process of the new GPT. Finally, the model generates transitional growth cycles of per capita GNP.

The Quality Ladder and Product Variety: Larger Economies May Not Grow Faster

This paper constructs an endogenous growth model that combines the quality ladder model and the variety expansion model. Firms enter an imitation race. After the imitation process, monopolistic competition prevails and a new innovation race begins. A successful firm, by inventing a higher quality product, can take over the entire market. However, the existence of a variety of products limits the price that the successful firm can charge. We show that the present model exhibits an inverted U-shape relationship between market size and growth rate. Relatively large and small economies grow slowly while medium-sized economies grow rapidly.

Analysis of diffusion paths for photovoltaic technology based on experience curves

This paper assesses the prospects for diffusion of photovoltaic (PV) technology for electricity generation in grid-connected systems. The analysis begins with the calculation of the break-even price of PV systems and modules, which is the price that can assure commercial viability without incentives or subsidies. The calculated average break-even price of PV systems for building-integrated applications is about $3.2/W p, but can go up to about $4.5/W p in areas with very good solar irradiation and if a low real discount rate is applied. These are higher values than the break-even prices estimated in the literature to date. PV system break-even prices for intermediate load generation in utility-owned systems are also calculated, their average being about $1/W p. The methodology of experience curves is used to predict what would be the different levels of cumulative world PV shipments required to reach the calculated break-even prices of PV systems, assuming different trends in the relationship between price and the increase in cumulative shipments. The years in which the break-even levels of cumulative shipments could be theoretically obtained are then calculated by considering different market growth rates. Photovoltaics could enter the niche of building-integrated applications without incentives in the first years of the next decade, provided that the PR is 80% and the average annual world market growth rate is at least 15%. The final part of the paper analyzes the niche markets or applications that seem promising for the diffusion of photovoltaics in the next few years.

A Ten-Year Delphi Forecast of the Irish Speciality Food Market

The speciality food sector affords small agri-businesses the opportunity to operate in a growing niche market that satisfies consumer demands for high quality artisan foods. In this research the Delphi Technique was used to forecast growth in the Irish Speciality Food Market five and ten years into the future. The expert panel forecast that the Irish Speciality Food Market would grow by 65 per cent over the next ten years, with the most significant growth in the cured meats, yoghurt and cheese categories. The forecast indicated that sales through delicatessen or speciality food stores would be worth €47 million by 2010. The Irish Speciality Food Market's growth rate between 2000 and 2005 was forecast to be faster than the growth between 2005 and 2010.

Relational Norms and Goal Orientation in the Indian Market

Using three of Macneil's relational norms within the context of the Indian buyer-seller (channel members) relationships, this study empirically examines the relationship between relational norms and different organization goal orientations (that of the manufacturer/ marketer). The results indicate that Indian firms' orientation towards profitability is associated with their orientation towards market share and growth rate. Interestingly the orientations towards the goals of market share, growth rate, and sales volume are strongly associated with one another. As regards the association between the goal orientation and relational norms, the feeling of trust, expectation of future cooperation and long-term relational perspective, captured in solidarity and mutuality, are strongly associated with tangible goal orientation. On the other hand, the norm of role integrity capturing the complexity aspect of relational norm is not associated with the tangible goal orientations.

Valuing renewal options in public industrial leases in Singapore

Option to review land rents to prevailing market rents and option to renew leases for another term are two important options embedded in the public industrial land leases in Singapore, managed by the Jurong Town Corporation (JTC). The land rents of JTC leases are reviewed every year subject to a cap on the land rent increase. The rent cap, which is historically lower than the prevailing market growth rate, widens the gap between the contract rent and the prevailing market rent as the lease progresses. This creates disincentives to the lessor for not exercising the rent review option, because the option is in‐the‐money. The rent gap, on the other hand, is also translated into substantial profit rents for lessees who hold onto the leasehold interests of industrial lands. By assuming two different probability distributions for the ex‐ante prevailing market rents, the profit rents were simulated to derive at the values of a hypothetical 30‐year lease, which range from US$47.93 (S$86.45) per square meter (psm) (Sungei Kadut, Kranji) to US$236.05 (S$425.74) psm (West Coast Highway). Based on these simulated 30‐year leasehold values and assumptions of other input parameters: equated yield (e = 10 percent), risk free rate (Rf = 4.52), volatility of leasehold value (σ = 15 percent), term of lease (T = 30 years) and rental growth cap (g = 7.6 percent), the premiums for the lease renewal options were estimated to be in a range of US$4.55 (S$8.21) psm to US$22.26 (S$40.15) psm.

Channel Training Strategies in High-Technology Industries

We investigate how optimal sales training strategies depend on firm, industry, and channel structure factors, such as sales training productivity, market growth rates, the organizational structure of the intermediary's salesforce, the learning and retraining characteristics of salespeople, and competitive externalities of training. We build and analyze two new models that account for the dynamics of market growth and thus provide insight into the optimal amount, timing and organizational level of training. The analysis first evaluates a duopoly model in which firms sell their products through a two-level intermediary to end-users, assuming that training expenditures exhibit decreasing returns to scale within each training period. Next the analysis considers the same duopoly model, but examines the impact of assuming diminishing marginal returns to training over the product's whole life cycle. The results show that if training exhibits decreasing returns in each period, then: (a) a company should focus on training in the initial stages of the product life cycle, unless the memorability of sales training or the discount factor is small; (b) training in the early stages of the product life cycle is worthwhile for sales managers, while training in the maturity and declining stages is worthwhile for field salespeople; (c) for selling organizations with a small span of control per sales manager, and/or for organizations where retraining is not very effective, optimal training focuses more heavily on the field salesforce and less on sales managers; and (d) in contrast to the popular view that the value of training increases as salespeople's retention of training knowledge decreases, we find that as organizational memory increases, it is worthwhile to train more. On the other hand, if training exhibits global decreasing returns over time, then the optimal training strategies share some commonalities with the previous results, but also show some important differences: (a) it is optimal to start training field salespeople only when the product is ready to be sold, while sales managers may be trained in advance; (b) the effect of sales training retention and the discount factor differs from those in the first model (for low retention of training knowledge or low discount factor, optimal training tracks contemporaneous demand in each period, while optimal training is concentrated in the initial phases of the product life cycle otherwise); (c) an increase in the market potential of some period t implies an increase in optimal training of field salespeople in period t and an increase of optimal training of sales managers and salespeople in previous periods, as well as a decrease in optimal training of sales managers in period t and a decrease of optimal training of sales managers and field salespeople in future periods; and (d) the decision between training sales managers or field salespeople is very sensitive to sales training retention, the discount factor, the breadth of the organization, and the ability of sales managers to pass on training to the field salesforce. This sensitivity is so extreme that optimal training in a given period is 'mutually exclusive' between organizational levels.

Strategic location decisions in a growing market

The optimal location and time of entry are examined in a horizontally differentiated market using a simple duopoly model with sequential entry. Assuming high entry and relocation costs, we find that (1) the late entrant always locates in the periphery (maximum differentiation), (2) the first entrant will choose either a peripheral location or a central location (minimum differentiation) but not an intermediate location, (3) the choice of a central location is optimal when the effectiveness of entry deterrence is enhanced by low transportation costs, high interest rates, high fixed costs and a low market growth rate.

Product Development Decisions: A Review of the Literature

This paper is a review of research in product development, which we define as the transformation of a market opportunity into a product available for sale. Our review is broad, encompassing work in the academic fields of marketing, operations management, and engineering design. The value of this breadth is in conveying the shape of the entire research landscape. We focus on product development projects within a single firm. We also devote our attention to the development of physical goods, although much of the work we describe applies to products of all kinds. We look inside the “black box” of product development at the fundamental decisions that are made by intention or default. In doing so, we adopt the perspective of product development as a deliberate business process involving hundreds of decisions, many of which can be usefully supported by knowledge and tools. We contrast this approach to prior reviews of the literature, which tend to examine the importance of environmental and contextual variables, such as market growth rate, the competitive environment, or the level of top-management support.

Non-asbestos seals and gaskets — Pain or boon?,,

We regularly receive news in Sealing Technology concerning the very important issue of replacements for asbestos seals. Time is running out for the use of compressed asbestos fibre (CAF) in gaskets for use with saturated and superheated steam, and with certain flammable, toxic and corrosive chemicals. These will no longer be permissible after 1 January 2001. Asbestos-related seals, which were once considered acceptable, are causing both sides of the industry — supplier and user — much consternation. Worldwide, the replacement market amounts to more than US$1 billion per annum. It will take many more years before the asbestos seal is only to be found in the museum of defunct sealing solutions. But like the Millennium Bug for computers, what is a problem for some is a commercial opportunity for others. It might well cost many millions of dollars, but this is a boon to suppliers at a time of low market growth rate in some other sectors. This article and the following one, look at recent developments in asbestos sealing products, and further efforts to help alleviate the problems associated with their replacement.

Cointegration, unbiased expectations, and forecasting in the BIFFEX freight futures market

The relationship between freight cash and futures prices is investigated using cointegration econometrics. Results illustrate that the BIFFEX futures market is unbiased, and hence efficient for the current, one, two, and quarterly contract horizons. Since the futures contract is based on an index of various shipping routes, which has undergone several changes since its inception, stability in the relationship between the spot and futures rates is investigated using rolling cointegration techniques. Results indicate that the futures contract appears to have become more efficient over time in predicting the spot rate, and that the decrease in trading volume found in the BIFFEX market is not driven by a lack of efficiency in this market. Rather, the decrease in futures trading might be attributed to the growth rate of the freight forward market. This article incorporates the long‐run cointegrating relationships between cash and futures prices in a forecasting model and compares the forecasting performance of this model with several alternatives. It is found that while the futures price is the best predictor of future spot rates for the current‐month contract, time‐series models can outperform the futures contract at longer contract horizons. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20:545–571, 2000.

The impact of demographic factors on Hong Kong hotel employees’ choice of job‐related motivators

Hospitality companies can increasetheir market share and growth rates by increasing their brand loyal customers. This is a more profitable approach than other marketing activities, such as price cuts or promotional programs. As a mature industry, the hospitality business must pursue market‐share gains, rather than market‐growth gains. Acquiring new customers is expensive becauseof advertising, promotion, and start‐up operating expenses. Besides, it is cheaper to serve current customers. This paper brings together the factors that contribute to brand loyalty in marketing literature and provides strategies to hospitality managers for increasing brand loyal customers.

Increasing brand loyalty in the hospitality industry

Hospitality companies can increasetheir market share and growth rates by increasing their brand loyal customers. This is a more profitable approach than other marketing activities, such as price cuts or promotional programs. As a mature industry, the hospitality business must pursue market‐share gains, rather than market‐growth gains. Acquiring new customers is expensive becauseof advertising, promotion, and start‐up operating expenses. Besides, it is cheaper to serve current customers. This paper brings together the factors that contribute to brand loyalty in marketing literature and provides strategies to hospitality managers for increasing brand loyal customers.

Prioritising target markets

Target marketing is a key decision area for all businesses. Market size, growth rates, competitive forces, customer fit and profitability are just a few of the criteria which can be used by businesses assessing the attractiveness of their target markets. Yet despite the wealth of variables available to managers and the development of a range of decision tools to help them, research indicates that many businesses continue to assess target markets on the basis of short‐term profitability measures. This paper examines the wide range of approaches which have been proposed in the literature for identifying market attractiveness and questions how these fit with managerial practice, utilising the findings from cases and two studies of The Times 1000 UK companies’ target market approaches. The studies’ findings indicate that the literature’s formal, multi‐criteria tools for assessing market attractiveness are not necessarily reflected in the simplistic view adopted by many marketing professionals and brand managers. The paper concludes by offering a research agenda to help define future work in this area.