Sequential product development and change intensity in firm -supplier innovations: An empirical study of the PC industry

High tech firms are engaged in sequential product development, constantly designing and redesigning their products. Much of the existing product development literature focuses on decisions for an individual product or product family. There is a lack of theories conceptualizing the development of successive generations of products. There is also a lack of empirical research that investigates the strategic impact of frequent product changes.;This study examines the impact of supplier innovation on a firm's product change decisions, and how such impact is affected by firm-supplier relationship closeness and market competitiveness. This study also examines the impact of a firm's product changes on its market performance, and how such impact changes with respect to a firm's technology competence and product change focus. Using hierarchical regression analysis, a model incorporating these relationships is tested using the data obtained through a survey of the PC industry.;This study has implications for product development theory and practice. First, by evaluating the impact of supplier innovation on a firm's product innovation strategy, this study highlights the suppliers' role in product innovations in later stages in the value chain. It further shows the influence of firm-supplier closeness and market competitiveness in this process. Second, this study underlines the strategic importance of sequential product development by providing empirical evidence for the positive association between product change intensity and market performance. The study also reveals the combined impact of technology competence and product change focus on market performance.