Empirical analyses indicate that the firm which is the first in bringing new products to the market has a major competitive advantage. The development time for sophisticated and high quality products is shortening. The time span of the market cycle is decreasing, and for high technology firms, even rather short delays can cause a deep cut in the overall profit performance. In the “Factory of the Future” the capability for immediate and reliable delivery of custom designed products is a crucial aspect.Speed is becoming a decisive factor for corporate management. In Management Science, however, this development is not yet taken into account adequately. Different stages of the same process are still analyzed separately. Models of research and development e.g., do not investigate how delays influence the market performance of the eventually achieved product. Studies of innovation diffusion focus solely on the market cycle, thereby neglecting the lengthy and costly R&D processes. With such a limited perspective, those models must fail to support effectively decision making in a dynamic high technology environment.The paper discusses System Dynamics’ role in such a setting. It presents a model for innovation management which integrates the stages of R&D with the production and marketing cycle. It is designed as a microworld for learning about the system and for studying possible ways of influencing its behavior. The model consists of two modules: a C-written algorithm, based on biological evolution theory, maps the firm’s research and development processes; the second module is a Dynamo-representation of innovation policies and market dynamics. Both modules are tightly coupled through flows of information. Their interactions allow the testing of corporate strategies for R&D planning and innovation management.Although still in the development stage, the model provides insights into the timing of decisions. The results from this integrative view underline the importance of speed in the strive for competitive advantage.

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Date created

• 1990

Type

• 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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386b7d5fcd17a644199db727913a7a7a

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e3ebd4855fa658877b17f518e29a6ac9

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23d738ba88f8333bc39725f9cb5bd0b8

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Collection

System Dynamic Society Records

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Collecting area

• This collection is part of the University Archives