MULTIPROJECT STRATEGY AND SALES GROWTH - THE BENEFITS OF RAPID DESIGNTRANSFER IN NEW PRODUCT DEVELOPMENT

This paper explores the impact on sales growth of different product de velopment strategies, especially an approach that focuses on the coord ination of multiple projects that overlap in time and share critical c omponents. The data for our analysis comes from the automobile industr y, although the principles we discuss should apply to any industry whe re firms compete with multiple product lines and where the sharing of components among more than one distinct product is both possible and d esirable. Some firms compete by trying to develop 'hit' products in is olation, with little or no reuse of components or coordination with ot her products. Another way to compete is to leverage a firm's investmen t in new technologies across as many new products as possible as quick ly as possible, while the technologies are still relatively new. This paper proposes a typology that captures this effect by categorizing pr oduct development strategies into four types: new design, rapid (or co ncurrent) design transfer, sequential design transfer, and design modi fication An analysis of 210 projects from the automobile industry betw een 1980 and 1991 indicates that firms utilizing the rapid design tran sfer strategy-quickly leveraging new platform components across multip le projects-increased sales more than when they or their competitors d id not use this strategy. The study's results suggest that not only th e sharing of technology among multiple projects but also the speed of technology leveraging are important to sales growth. (C) 1997 by John Wiley & Sons, Ltd.