Dynamic product proliferation and firm performance
thesisposted on 2021-12-13, 15:31 authored by Pijak Pakhunwanich
Product proliferation is a strategy of product space filling over time. However, product proliferation can be undertaken in two main ways, including densification (proliferating products within existing product lines) and expansion (proliferating by expanding into new product lines). Despite the fact that many firms engage in product proliferation activities, the outcomes are not yet clearly understood. This is potentially due to gaps in extant literature around an incomplete assessment of the product proliferation construct, which is multidimensional, inappropriate and static measurement of firm proliferation efforts, and a lack of research into what resources might support or damage product proliferation efforts (the study of boundary conditions). This research addresses these issues by developing product proliferation as a multidimensional construct, developing measurements to capture the dynamic changes in firm’s product portfolio, and exploring the impact of three important boundary conditions. The boundary conditions studied are R&D efforts, marketing efforts, and scopification (the number of new brand/product lines a firm has expanded into in a particular time period). Longitudinal data from 2010 to 2015 were collected, including 78 cases from the automotive, motorcycle, and fragrance industries. The data was analyzed using multilevel modeling, to enable a time series assessment of the findings. The results reveal that the product proliferation-firm performance relationship is complex, varying in terms of the different dimensions and according to the level of different boundary conditions. Thus, management may utilize the research findings by managing their R&D efforts, marketing efforts, and scopification according to each type of product space filling approach, and academics may utilize the findings of this research in many aspects (e.g. measurements, new facet of product proliferation) to further develop product proliferation theory.
- Business and Economics