Competition, product line length, and firm survival: evidence from the US printer industry

ABSTRACT

Adjusting product line length is one major strategy that firms employ to sustain their market position in competitive environments. This study extends extant literature on product line length by adding empirical results on the relationship between competitive intensity and product line length, and by examining the performance of firms that follow the suggested product line strategies. The analysis of data on 1849 printer products introduced by 342 manufacturers from 1983 to 2002 shows an inverted U-shaped relationship between competitive intensity and product line length, and firms following this pattern have a significantly lower hazard ratio of exit. These results confirm those discussed in the previous literature and provide evidence of the positive impacts of following such product strategies on firm survival.

KEYWORDS:

• Product line length
• market competition
• firm survival
• US printer industry

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Min Jeong received the B.A. degree in business administration from Ulsan National Institute of Science and Technology, Ulsan, South Korea. He is currently pursuing his master degree in management. His research interests include a firm’s product launching strategy, industry competition, and R&D strategy.

Byeoung-Im Kim is pursuing her B.A. degree in business administration from Ulsan National Institute of Science and Technology, Ulsan, South Korea. Her research interest is a firm’s marketing strategies.

KwangWook Gang received the B.A. degree in business administration from Chung-Ang University, Seoul, South Korea; the M.A. degree in IT business from the Korea Advanced Institute of Science and Technology, Daejeon, South Korea; and the Ph.D. degree in strategic management from Rensselaer Polytechnic Institute, Troy, NY, USA. He is currently working as an Assistant Professor with the School of Business Administration, Ulsan National Institute of Science and Technology, Ulsan, South Korea. His research interests include a firm’s entrepreneurial activities and technological strategies in the context of the industry evolution, especially disruptive technology. Also, he is interested in studying the determinants of a firm’s technological strategies, including ownership structure and financial resources. He further seeks to study how technology and innovation forms the basis for growth in emerging economies. His research has been published in IEEE Transactions on Engineering Management.

Notes

1. Data Sources has been published by the Information Access Company, which has been part of The Gale Group since 1981. It is a comprehensive guide to available data processing/data communications equipment, software, and companies. Vendors provide the information published through either completed surveys or technical manuals, and it is indexed to lead users to the product or company sought.

2. Our sample includes nine major submarkets in the US printer industry: serial printers, dot matrix printers, line printers, daisy wheel printers, laser/page printers, inkjet printers, thermal transfer printers, plotters, and special purpose printers.