Studying the Incubation of a New Product Market Through Realized and Alternative Histories

Daniel Engler (), Gino Cattani () and Joe Porac ()
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Daniel Engler: Department of Management and Quantitative Methods, College of Business, Illinois State University, Normal, Illinois 61761
Gino Cattani: Department of Management and Organizations, Stern School of Business, New York University, New York, New York 10012
Joe Porac: Department of Management and Organizations, Stern School of Business, New York University, New York, New York 10012

Strategy Science, 2020, vol. 5, issue 3, 160-192

Abstract: In this paper, we contribute to the literature on new market emergence by implementing a “history-friendly” simulation of the incubation period encompassing the decision processes that took place within General Motors (GM), Chrysler, and Ford during the design and development of the first U.S. minivan. Our work offers a “middle ground” alternative methodology for unpacking the “black box” of market incubation processes. Our middle ground approach is useful for exploring the complex interdependencies among four general mechanisms that shape market incubation: environmental shocks that open up new technological possibilities, firm-level capabilities that allow firms to differentially take advantage of these possibilities, various incentives (e.g., product cannibalization, rivalry) that influence a firm’s willingness to exploit new possibilities, and managerial beliefs about the viability of these possibilities. Complex nonlinear interdependencies exist among these mechanisms, and historical contingencies affect the way in which they interact. We identify important historical contingencies within and across GM, Ford, and Chrysler in their precommercialization managerial decisions prior to Chrysler’s introduction of the Voyager and Caravan in 1983. We use the historical details of actual market incubation to calibrate the simulation and develop plausible alternative (both near and hypothetical) histories of that incubation. Understanding why Chrysler, Ford, and General Motors made their respective product commercialization choices not only pertains to automotive history, but can also illuminate the complexities inherent in market incubation processes.

Keywords: market emergence; incubation; managerial beliefs; history-friendly simulation; fractal geometry; counterfactual analysis; realized and alternative histories; minivan (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orstsc:v:5:y:2020:i:3:p:160-192

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