The diffusion of innovations over time is a highly dynamic problem that is influenced by various factors like price, advertising, product quality, competition and among other the time of market entry. The traditional models of innovation diffusion--like the Bass model and the further development on that basis--ignore those factors and the complexity and dynamics underlying the process of diffusion. Usually these models consider only one influencing, but exogenous element, e.g., price of advertising, and seek for strategies to optimize the cumulated profits. Their aim is normative decision supports in the field, but they model, which do not appropriately represent the structural fundamentals of the problems because the methodologies the models are based on are inadequate to build complex and interdependent models. The use of the system dynamic methodology allows the development of more complex models to investigate and analyze the process of innovation diffusion. These models can enhance the insight and the problem structure and increase understanding of the complexity, the dynamics and the impact of the influencing factors. The paper discusses in a systematic view different model types. In the beginning the coarse structure of a model that generates the process of innovation diffusion in monopolistic markets is shown and discussed in detail. It is also described how management policies and the structures of corporate models can be integrated to the model. Further developments of this core model then describe different ways of mapping competition among existing and potential competitors in innovation diffusion models. These models then allow -among other- the analysis of market entry timing, pricing or advertising, and research and development strategies.

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Date created

• 1995

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• Document

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• Processing documentation available at: https://wiki.albany.edu/display/SCA/Processing+Ingested+Digital+Files

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• Creative Commons BY-NC-ND Attribution-NonCommercial-NoDerivs 4.0 International

  
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12420ec6bd5f758d2b4dea59aabd75a9

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23d738ba88f8333bc39725f9cb5bd0b8

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b83f2ce2912343b559f967dd985da515

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Collection

System Dynamic Society Records

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• This collection is part of the University Archives