Investment in facility changeover flexibility for early entry into high-tech markets

• 成果类型: Article
• 署名作者: Gaimon, C; Morton, A
• 署名单位: University System of Georgia; Georgia Institute of Technology
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• 发表日期: 2005
• 页码: 159-174
• 关键词: high-volume manufacturing; changeover flexibility; market entry time; volume-based learning; short product life cycles; Price competition

摘要

A model is introduced to analyze the manufacturing-marketing interface for a firm in a high-tech industry that produces a series of high-volume products with short product life cycles on a single facility. The one-time strategic decision regarding the firm's investment in changeover flexibility establishes the link between market opportunities and manufacturing capabilities. Specifically, the optimal changeover flexibility decision is determined in the context of the firm's market entry strategy for successive product generations, the changeover cost between generations, and the production efficiency of the facility. Moreover, the dynamic pricing policy for each product generation is obtained as a function of the firm's market entry strategy and manufacturing efficiency. Our findings provide insights linking internal manufacturing capabilities with external market forces for the high-tech and high-volume manufacturer of products with short life cycles. We show the impact of manufacturing efficiency and a firm's ability to benefit from volume-based learning on the dynamic pricing policy for each product generation. The results demonstrate the benefits realized by a firm that works with its manufacturing equipment suppliers to develop more efficient and flexible technology. In addition, we explore how opportunities afforded by pioneer advantage enable a firm operating a less efficient facility to realize long term competitive advantage by deploying an earlier market entry strategy.