Product Development Strategy for the High-tech Startup: A System Dynamics Post-Mortem

摘要

This study reviews the case of a failed high-technology product development effort, the Multi-Chip Module (MCM) project. Specifically it reviews the strategic decisions that led to the project's demise, and using simulation it constructs an alternate strategy that would have proven more successful. The difference between the two strategies centers on the relative timing between product development and marketing efforts. The first strategy, which was actually pursued, stresses acquiring customers early and learning about the production process while filling actual orders. The second, hypothetical strategy centers instead on learning about the production process first and then, only after production proficiency has been achieved, shifting attention and resources to the task of customer acquisition. Simulation-based scenario analysis demonstrates the second strategy's superior performance as measured by the MCM project's path to profitability.