Faster time to market and shorter product life cycles are pushing companies into more frequent product transitions, requiring managers to confront the potential rewards and challenges associated with product introductions and phaseouts. Several studies show that most new products fail in the marketplace for a variety of reasons,1 and both academics and practitioners have identified strategies for improving the chances of success.2 With a few exceptions, these studies focus on the success of a single product.3 However, companies often struggle with product transitions even when the new product meets all the requirements for success. Consider, for example, two consecutive generations of high-volume microprocessors that we observed at Intel Corp., the U.S. semiconductor manufacturer. For the sake of this discussion, we will refer to the products as X and Y. (See “About the Research,” p. 74.)
Intel originally designed X as a transitional product to pave the way for a stronger performance trajectory than was occurring with the previous platform. While X itself performed only slightly better than the previous generation at launch, its design allowed for performance gains later based on a wide array of computing benchmarks. Intel planned to move a substantial portion of the market to X and then complete the transition to Y, which offered similar performance at lower cost.
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