An Empirical Study of Declining Lead Times: Potential Ramifications on the Performance of Early Market Entrants

Abstract

This study examines innovation lead time, the construct believed to be the key determinant of launch order strategic value. Anecdotal evidence has suggested that innovation lead times are continuing to decrease as the result of new product development acceleration strategies. However, broadscale empirical evidence regarding product launches since 1984 has not been forthcoming. This study fills the void by comparing lead times for first movers and second movers across a 20-year time span, ending in 2004. Results confirm that first-mover lead times have continued to decrease significantly, whereas second-mover lead times have decreased marginally.