The Benefits of Introducing New Products Faster
Greater Market Share
Those firms with the ability to bring new products to market quickly have several advantages over their slower competitors. First as illustrated in Exhibit 3.lA early market entrants take market share, which is easier to accomplish when there is no competition, as compared to trying to take market share away from an entrenched competitor. This is especially
true for revolutionary products (which are discussed shortly) for which there are no alternatives.For example in the semiconductor industry history has shown that the first two firms to enter a market with 1 new product tend to capture the vast majority of the market share for those products. Similarly the rapid introduction of new automobiles is associated
with gains in market share in that industry. Further evidence of the need to quickly bring new products to market is seen in the personal computer industry where one manufacturer estimated a 50 to 75 percent loss in sales due to a six- to eight-month delay in bringing a new product to market.