Determinants of Magnitude of a Competitor’s Reaction to a New Product Introduction Delay

Abstract

For benefiting from the advantages of being the first in the market, many companies deliberately release information about a product well in advance of the product actual introduction. However, very often we see how companies fail to deliver their new products on the promised introduction due dates. The negative consequences that a firm, which is delaying a new product introduction, suffers may depend in part on the magnitude of competitors’ responses. On this ground, our interest lies in examining the determinants of magnitude of a firm’s reaction to a new product introduction delay. An empirical analysis based on 180 manufacturers of electronics industries in Taiwan showed that reaction magnitude can be jointly explained by factors that are sender related (market dominance and signaling reputation), product related (centrality of attack, expected duration of delay, and controllability of the delay), and receiver related (market dominance, product innovation ability, and capacity utilization).