Research shows that marketing investments play a pivotal role in a firm’s own bankruptcy. However, there are even more firms that are not confronting bankruptcy themselves yet face spillovers from a rival’s bankruptcy. For such firms, it... more
Research shows that marketing investments play a pivotal role in a firm’s own bankruptcy. However, there are even more firms that are not confronting bankruptcy themselves yet face spillovers from a rival’s bankruptcy. For such firms, it remains unknown whether their marketing investments affect these spillovers. We show that, in contrast to their generally positive effects in other contexts, advertising and R&D can either help or harm in the context of bankruptcy spillovers. The difference hinges on the industry’s growth and concentration. Advertising decreases (increases) a firm’s stock return when its rival files for bankruptcy in a low- (high-) growth industry and R&D decreases (increases) the stock return in a low- (high-) concentration industry. Further, advertising has a stronger effect in a higher concentration industry. The results provide insight on how a firm’s advertising and R&D help or harm its value, should one of its rivals file for bankruptcy.
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doi 10.1287/orsc.1070.0313
Strategy scholars have long debated the value of formal planning, and research has offered inconsistent support for planning to enhance firm performance. Given these mixed empirical effects, we draw from the resource-based view of the... more
Strategy scholars have long debated the value of formal planning, and research has offered inconsistent support for planning to enhance firm performance. Given these mixed empirical effects, we draw from the resource-based view of the firm to illustrate a paradox firms may face. In particular, a strong marketing planning capability may not only reduce the incidence of postplan improvisation but also contain inherent process rigidity. Since both of these can also increase performance, results illustrate a performance paradox in marketing planning.
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We explore the role of resource interactions in explaining firm performance in the context of acquisitions. Although we confirm that acquisitions do not lead to higher performance on average, we do find that complementary resource... more
We explore the role of resource interactions in explaining firm performance in the context of acquisitions. Although we confirm that acquisitions do not lead to higher performance on average, we do find that complementary resource profiles in target and acquiring firms are associated with abnormal returns. Specifically, we find that acquiring firm marketing resources and target firm technology resources positively reinforce (complement) each other; meanwhile, acquiring and target firm technology resources negatively reinforce (substitute) one another. Implications for management theory and practice are identified.
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Although firms are increasingly launching branded mobile apps, an understanding of their influence on firm value remains elusive. Using stock market returns to assess firm value, the authors investigate the impact of branded mobile app... more
Although firms are increasingly launching branded mobile apps, an understanding of their influence on firm value remains elusive. Using stock market returns to assess firm value, the authors investigate the impact of branded mobile app announcements on such value. Moreover, recognizing that mobile apps generate various touchpoints in the customer journey, the authors also investigate how an app’s design shifts the effects of mobile apps on firm value. In particular, they investigate effects from whether an app emphasizes features related to peer-to-peer interactions about the brand, personal-oriented interactions between a customer and the brand, or the purchase phase itself. They find that the launch of a mobile app increases firm value and that the features emphasized in app design play an important role in such value creation. The study offers important implications regarding the accountability of branded mobile apps and provides direction for marketing theory and practice.
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ABSTRACT Recognizing the importance of timely access to market knowledge for successful new product development (NPD), extant research has theoretically argued and empirically shown the value of consumer co-creation during the NPD... more
ABSTRACT Recognizing the importance of timely access to market knowledge for successful new product development (NPD), extant research has theoretically argued and empirically shown the value of consumer co-creation during the NPD process. While most research views consumer-generated content as definite or fixed, this paper reveals how firms can enhance the value of consumer-generated ideas by facilitating the exchange of relevant information during co-creation. The authors introduce brand-embedded interaction as a process that enables consumers to generate new product ideas that not only reflect user needs but also align with the brand’s goals and capabilities. Results from two quasi-field experiments using Twitter show that a higher degree of dynamic interaction and personalization during co-creation enables consumers to generate more constructive new product ideas or ideas that are valuable to both consumers and firms. Results offer important implications for both theory and practice regarding co-creation and new product development.
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As managers introduce new products, they are changing the assortment provided in their brand’s product line and are ultimately shifting the underlying diversity of the brand. To date, research has primarily focused on consequences due to... more
As managers introduce new products, they are changing the assortment provided in their brand’s product line and are ultimately shifting the underlying diversity of the brand. To date, research has primarily focused on consequences due to shifting the number of lines in the portfolio, offering many important implications. However, making comparisons between broad and narrow product lines can mask specific effects due to different forms of diversity. In this research, we draw from extant management research on diversity to offer three lenses to view brand diversity – namely, brand variety, brand separation, and brand disparity. We propose and investigate how taking a broader perspective of brand diversity uncovers important complexities related to the diversity of a brand’s product portfolio that lead to markedly different consequences. In particular, we investigate short-term versus long-term consequences, by examining sales and brand equity effects, as well as internal versus extern...
... Faculty Fellow (sarchand@indiana.edu), Rebecca J. Slotegraaf is Associate Professor and Whirlpool Faculty Fellow (rslotegr@indiana.edu), and Kevin J. Cooney is a Doctoral Student (kcooney ... 7 acquire additional retail shelf space... more
... Faculty Fellow (sarchand@indiana.edu), Rebecca J. Slotegraaf is Associate Professor and Whirlpool Faculty Fellow (rslotegr@indiana.edu), and Kevin J. Cooney is a Doctoral Student (kcooney ... 7 acquire additional retail shelf space (Quelch and Kenny 1994; Varadarajan 2009). ...
ABSTRACT Firms are increasingly collaborating with their competitors for new product development (NPD), yet the literature is almost silent on stock market reactions to these horizontal collaborations. Given the different skills and... more
ABSTRACT Firms are increasingly collaborating with their competitors for new product development (NPD), yet the literature is almost silent on stock market reactions to these horizontal collaborations. Given the different skills and activities needed in each NPD phase, we analyze the differential stock market reactions to horizontal collaborations in the initiation, development, and commercialization phases of NPD. Analyses of a unique and comprehensive dataset with 831 NPD announcements of horizontal collaborations over 12 years reveal that, on average, the stock market reacts favorably to NPD-related horizontal collaboration in the initiation phase, but unfavorably in the development and commercialization phases. Further, these effects are asymmetrically moderated by the innovativeness of the new product and the collaborating competitor’s relative market and technological powers. Overall, our results highlight that failing to examine the specific NPD phase leads to an incomplete understanding of stock market reactions to horizontal collaboration for NPD. We offer theoretical and managerial implications regarding horizontal collaboration for each NPD phase, along with the relevant NPD project and competitor contingencies.
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ABSTRACT Innovation serves as a foundation for sustainable competitive advantage. Therefore, it is no surprise that firms seek to build an innovation base—a reservoir of inventions, ideas, and discoveries that serve as a platform for... more
ABSTRACT Innovation serves as a foundation for sustainable competitive advantage. Therefore, it is no surprise that firms seek to build an innovation base—a reservoir of inventions, ideas, and discoveries that serve as a platform for their innovation efforts. One approach for building an innovation base is acquisitions, though extant research reveals an equivocal verdict on whether acquisitions influence post-acquisition inventions. In this research, the authors focus on type of acquisition, acquisition behavior over time, and invention characteristics to investigate how acquisition behavior influences post-acquisition inventions. Analysis of 352 firms across five industries and 17 years reveals that firms who make acquisitions produce a stronger innovation base than those who make no acquisitions. Moreover, comparing effects across vertical and horizontal acquisitions, results indicate that the acquiring firm’s knowledge breadth plays an important role in determining which type of acquisition behavior generates the strongest influence on a firm’s innovation base.
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Strategy scholars have long debated the value of formal planning, and research has offered inconsistent support for planning to enhance firm performance. Given these mixed empirical effects, we draw from the resource-based view of the... more
Strategy scholars have long debated the value of formal planning, and research has offered inconsistent support for planning to enhance firm performance. Given these mixed empirical effects, we draw from the resource-based view of the firm to illustrate a paradox firms may face. In particular, a strong marketing planning capability may not only reduce the incidence of postplan improvisation but