All experience is not created equal: learning, adapting, and focusing in product portfolio management

Abstract

This study explores the contingencies relating firm experience to product development capabilities, focusing on experience type (breadth versus depth) and timing (prior versus concurrent). Results from empirical tests in the U.S. mutual fund industry offer two primary findings. First, firms increase proficiency at adapting their processes to address new opportunities as they accumulate experience in entering new niches, but face initial hurdles broadening their experience base. Second, concurrent learning is capacity constrained, as product quality increases in the number of products introduced simultaneously in one niche, but quality decreases as the firm's concurrent portfolio of new products broadens. Jointly, these findings highlight that dynamic capabilities are built through prior adaptation experience and that management of a product development portfolio is an important managerial capability.Learning, Adapting, and Focusing 317 experience. Then, after the empirical setting is introduced and the results of the analysis are discussed, the themes of dynamic capabilities and product portfolio management are revisited in the Discussion section. 2 The primary exceptions have looked at which opportunities to pursue and the sharing of (generally technical) resources across activities ('platforming').

Types of learning in complex technological innovations

“…The analyses presented in this paper suggest that technical capabilities are less important than combinative capabilities in creating innovations based on a combination of technology areas. This study thus confirms some of the prior studies in organizational learning literature indicating that not all learning is equally difficult and therefore equally valued (Eggers 2012). This study also reaffirms some of the main conclusions of learning and organizational literature, as it emphasizes that the ability to develop more difficult innovations is dependent on prior learning in an organization, that learning of combinative capabilities can be done in related areas, and that this increases the probability of creating more difficult innovations Clark and Huckman 2009).…”

“…While the traditional organizational learning perspective emphasizes experience in a narrow range of activities as a driver of knowledge accumulation (Argote 1993;Argote 1999), later contributions have suggested that a variation of tasks -rather than a specialization -also adds to the process of learning in a core area (e.g. Boh, Slaughter et al 2007;Eggers 2012)) and shapes different learning sequences (Bingham and Davis 2012). In theorizing the different models of learning, introduce the distinction between specialized, related, and unrelated learning: the former resembles the traditional learning curve concept, while the latter two identify learning processes that benefit from experience in problem domains that are cognitively related to the core area of practice and a learning model based on the alternance of unrelated problem areas, respectively.…”

Research on Markets for Inventions and Implications for R&D Allocation Strategies

“…Especially when the technology is radically new, its development might require a great amount of managerial attention (Ocasio, 1997). Major investment in a unique technology can serve as a valuable mechanism for focusing managerial attention, which previous research has shown to be quite a valuable resource for the company (Eggers, 2012). On the other hand, as Sutton (1998) and Bresnahan and Gambardella (1998) point out, some technologies might produce multiple applications at a zero or low marginal cost, which creates incentives to concentrate resources on their development, and to reutilize them in multiple submarkets, rather than spreading resources across several technologies each dedicated to a specific submarket.…”

Robust Optimization for the Discrete Time-Cost Tradeoff Problem with Cost Uncertainty

“…(Hall 2012, Sect. 4.3.1) Eggers (2012) explores the relationship between organizational experience and product development capability. An empirical study of new products in the U.S. mutual fund industry is conducted.…”