Mark E. Parry

On the Use of Polynomial Regression Equations As An Alternative to Difference Scores in Organizational Research

For decades, difference scores have been widely used in studies of congruence in organizational research. Although methodological problems with difference scores are well known, few viable alternat...

What separates Japanese new product winners from losers

Abstract Operating in the upper echelons of highly competitive, global markets, numerous Japanese firms enjoy well-deserved reputations for excellence in new product development. Despite this success, however, almost no research has been conducted to explore the keys to successful new product development in Japanese companies. For the most part, research in this area has focused on North American and European firms. X. Michael Song and Mark E. Parry address this gap with a study of 404 Japanese firms and 788 new product introductions. Their research explores the links between new product success and 10 factors: product advantage; marketing synergy; technological synergy; market potential; market competitiveness; market and technical understanding; senior management support; proficiency in the predevelopment planning process and in concept development and evaluation; proficiency in market research, market pretesting, and market launch; and technical proficiency. To avoid any cultural bias, development of the survey was preceded by in-depth case studies and focus group interviews with Japanese and American new product development teams. Although time-consuming and expensive, these preliminary steps were necessary for ensuring the validity of the survey contents and procedures. Notwithstanding the obvious cultural differences, the findings from this study suggest that Japanese new products professionals view the keys to success in much the same way as their North American counterparts. For the survey respondents, spondents, the most important success factor is product advantage. Other important success factors include predevelopment proficiency (that is, proficiency in the predevelopment planning process as well as in concept definition and evaluation) and marketing and technological synergy. Consistent with previous research on North American firms, market competitiveness was found to be the least important success factor. For managers who are trying to predict whether a project will result in a product advantage, several survey items may be useful as a checklist for assessing potential product advantage. In particular, these managers should consider whether the product offers potential for reducing consumer costs and expanding consumer capabilities, as well as the likelihood that the product offers improved quality, superior technical performance, and a superior benefit-to-cost ratio.

Identifying New Product Successes in China

To examine the generalizability of the work of Cooper regarding the correlates of new product success and failure, Mark Parry and Michael Song surveyed new product development managers at 129 state-owned enterprises in the Peoples Republic of China. Their analysis of 258 reported product successes and failures indicated that relative product advantage and the acquisition of marketing information were highly correlated with new product success, just as in Canada. In addition, several factors not significantly correlated with success in Canadian firms emerged as significant correlates of success in the PRC. These included the level of competitive activity, the timing of the product launch, and the level of proficiency in executing activities in the early stages of the product development process.

R&D-marketing integration in Japanese high-technology firms: Hypotheses and empirical evidence

The authors review studies of U.S. high-technology firms and hypothesize that, in Japanese high-technology firms, the perceived level of achieved integration reflects perceptions of organizational structure and climate. To evaluate these hypotheses, the authors examine the perceptions of marketing managers from 264 Japanese high-technology firms. Findings indicate that managerial perceptions of information-sharing and integration in budgeting were negatively correlated with perceptions of formalization. The authors also find that perceptions of information-sharing and integration in the early stages of new product development were positively correlated with perceptions of employee participation in decision-making and with perceptions of the value placed by senior management on R&D-marketing integration.

Challenges of managing the development of breakthrough products in Japan

We propose a contingency model and hypothesize that increases in product innovativeness weaken the influence of product synergies and development proficiencies on product performance. We incorporate these hypotheses in a path model linking measures of product synergy, development proficiency, product competitive advantage, and product performance. We test the model using data from Japan on 412 high-innovativeness projects and 375 low-innovativeness projects. We find that product innovativeness weakens three key relationships that determine new product success: (i) the impact of technical synergy on technical proficiency, (ii) the impact of technical proficiency on product competitive advantage, and (iii) the impact of product competitive advantage on new product success.

Coordination and manufacturer profit maximization: The multiple retailer channel

Abstract This paper explores wholesale pricing behavior within a two-level vertical channel consisting of a manufacturer selling through multiple independent retailers. The introduction of multiple retailers is important for several reasons. These include: (1) the determination of optimal channel breadth; (2) an analysis of the optimality of channel coordination for all channel members; and (3) the determination of the distribution of each dyads profits between manufacturer and retailer. The authors demonstrate the existence of a two-part tariff wholesale pricing policy, common to all retailers, that fully coordinates the channel. They then show that the manufacturer can generally obtain greater profits by setting a unique two-part tariff pricing-policy that does not coordinate the channel. Finally, the authors show that the fixed-fee component of either two-part tariff determines channel breadth, that is, the number of profit-maximizing independent retailers that are willing to participate in the channel.

When to lead or follow? It depends

Existing studies of entry strategy attribute sustained pioneer advantages to the pioneers ability to erect barriers that impede the entry of potential competitors. Because effective entry barriers imply industry concentration, the entry-barrier explanation of sustained pioneer advantage suggests that pioneers in concentrated industries will experience superior mature-stage performance. This paper tests this hypothesis by controlling for industry concentration and analyzing the impact of entry strategy on the mature-stage firms market share, perceived relative product quality, relative product-line breadth, relative price, and relative direct costs. The analysis suggests that the presence of effective barriers-to-entry significantly affects the performance poineers in both consumer- and industrial-goods industries. Moreover, the extent to which pioneers receive an incremental share advantage over early followers depends on both industry type and end-user purchase amounts.

Neural network earnings per share forecasting models: A comparison of backward propagation and the genetic algorithm

Zhang, Cao, and Schniederjans [W. Zhang, Q. Cao, M. Schniederjans, Neural Network Earnings Per Share Forecasting Models: A Comparative Analysis of Alternative Methods. Decision Sciences 35(2) (2004), 205-237, hereafter ZCS] examined the relative ability of neural network models to forecast earnings per share. Their results indicate that the univariate NN model significantly outperformed four alternative univariate models examined in prior research. The authors also found that a neural network forecasting model incorporating fundamental accounting signals outperformed two variations of the multivariate forecasting model examined by Abarbanell and Bushee [J.S. Abarbanell, B.J. Bushee, Fundamental Analysis, Future EPS, and Stock Prices. Journal of Accounting Research 35(1) (1997), 1-24]. To estimate the neural network weights of their neural network models, ZCS used backward propagation (BP). In this paper we compare the forecasting accuracy of neural network weights estimated with BP to ones derived from an alternative estimation procedure, the genetic algorithm [R.S. Sexton, R.E. Dorsey, N.A. Sikander, Simultaneous Optimization of Neural Network Function and Architecture Algorithm. Decision Support Systems 36(3) (2004), 283-296]. We find that the genetic algorithm produces models that are significantly more accurate than the models examined by ZCS.

Manufacturer-Optimal Wholesale Pricing When Retailers Compete

The existing marketing science literature on channels of distribution has emphasized pricing strategies that maximize either channel or manufacturer margin. This emphasis has implicitly assumed that optimal wholesale prices are independent of any fixed fees charged by the manufacturer. While this assumption is justified in a single-manufacturer, single-retailer world, it generally does not lead to manufacturer profit maximization in a world of competing retailers. In this paper we derive a manufacturer-optimal wholesale pricing strategy by simultaneously determining both elements of a two-part tariff (consisting of a wholesale price and a fixed fee). We show that the manufacturer will always prefer this “sophisticated” pricing strategy to one that maximizes either channel or manufacturer margin. We also show that both elements of the optimal tariff are functions of the absolute difference between retailer fixed costs.

The three-factor model and artificial neural networks: predicting stock price movement in China

Since the establishment of the Shanghai Stock Exchange (SHSE) in 1990 and the Shenzhen Stock Exchange (SZSE) in 1991, China’s stock markets have expanded rapidly. Although this rapid growth has attracted considerable academic interest, few studies have examined the ability of conventional financial models to predict the share price movements of Chinese stock. This gap in the literature is significant, given the volatility of the Chinese stock markets and the added risk that arises from the Chinese legal and regulatory environment. In this paper we address this research gap by examining the predictive ability of several well-established forecasting models, including dynamic versions of a single-factor CAPM-based model and Fama and French’s three-factor model. In addition, we compare the forecasting ability of each of these models with that of an artificial neural network (ANN) model that contains the same predictor variables but relaxes the assumption of model linearity. Surprisingly, we find no statistical differences in the forecasting accuracy of the CAPM and three-factor model, a result that may reflect the emerging nature of the Chinese stock markets. We also find that each ANN model outperforms the corresponding linear model, indicating that neural networks may be a useful tool for stock price prediction in emerging markets.