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).