Finance and strategy: Time-to-wait or time-to-market?

Determining the optimal time to enter a market for technology-based product s is paramount for the profitability and competitive position of an industr ial company. Finance theory and strategic marketing theory seem to differ f undamentally in the answer to the question of how to determine the optimal timing of an investment. Finance theory focuses on the value of waiting to invest, whilst strategic marketing theory stresses early market entry in or der to leapfrog competition and gain competitive advantage. We discuss both points of view and synthesize different approaches in order to develop an optimal timing framework for market entry for product innovations. Recent l iterature on investment under uncertainty, which suggests that a company sh ould invest when the value of a project passes a certain threshold, forms t he basis of our attempt to integrate finance and strategic marketing theory . (C) 1999 Published by Elsevier Science Ltd. All rights reserved.