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“This is not Snow White and the Seven Dwarfs [i.e., the Bell operating companies] here. Rather, it is a market of a thousand niches served by tens of thousands of firms, each offering dozens, if not hundreds, of different products.”— Andrew Campbell, president of Corptech
The information products industry, broadly defined to include products based on data, information, and knowledge, is intensely dynamic in terms of growth and the pace of new product introduction. The complexity in the variety of product offerings and the number of firms offering those products in this industry is shown by the fact that there are more than 36,000 information product suppliers in the United States; 90 percent of these have less than $1 million in annual sales.1 Revenues for the information industry are large; for example, radio and TV accounted for $54 billion in domestic revenues in 1993; film and recorded music for $35 billion; newspapers, books, and magazines, $85 billion; and business information suppliers, another $26 billion.
Despite the economic importance and the rapid pace of innovation of this industry, no previous research has examined the design and development of information products. Research in the management of innovation and new product development has focused primarily on physical, assembled products such as automobiles, video-cassette recorders, portable cassette players, power tools, computers, and various types of production equipment.2 This focus has been broadened by studies of innovation in nonassembled products such as ice and glass and of innovation in software products.3 In this article, we focus on information products. We define information products broadly to include information provided in either electronic or printed form and sold to external markets as well as that provided by information systems departments within firms to internal “customers.” Our research was guided by several basic questions: What can firms in information products industries learn from research on physical products? How are information products designed and manufactured, and how can information technology be used to support these processes? More fundamentally, what is the architecture of an information product and what are the strategic, organizational, and technical implications of the architecture for firms competing in this arena?
To answer these questions, we build on research and knowledge about the design of physical products.
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1. Veronis, Shuler & Associates, Communications Industry Forecast (New York, 1994).
2. For research on automobiles, see:
W.J. Abernathy, The Productivity Dilemma: Roadblock to Innovation in the Automobile Industry (Baltimore, Maryland: Johns Hopkins University Press, 1978); and
W.J. Abernathy, and K.B. Clark, “Innovation: Mapping the Winds of Creative Destruction,” Research Policy, volume 14, January 1985, pp. 3–22. For videocassette recorders, see:
M. Cusumano, Y. Mylonadis, and R. Rosenbloom, “Strategic Manuevering and Mass-Market Dynamics: The Triumph of VHS over Beta,” Business History Review (66, Spring 1992, pp. 51–94.
For cassette players, see:
S. Sanderson, and K. Uzumeri, “Managing Product Families: The Case of the Sony Walkman” (Troy, New York: Rensselaer Polytechnic Institute, October 1993).
For power tools, see:
A. Lehnerd, “Revitalizing the Manufacture and Design of Mature Global Products,” in B. Guile and H. Brooks, eds., Technology and Global Industries (Washington, D.C.: National Academy Press, 1987), pp. 49–64.
For computers, see:
M.H. Meyer and E.B. Roberts, “Focusing Product Technology for Corporate Growth,” Sloan Management Review, volume 29, Summer 1988, pp. 7–16;
A. Afuah and N. Bahran, “The Hypercube of Innovation,” Research Policy, 1994, pp. 1–26;
J. Pine, Mass Customization: The Next Frontier of Business Competition (Boston: Harvard Business School Press, 1993).
For production equipment, see:
E. von Hippel, The Sources of Innovation (Oxford: Oxford University Press, 1988); and
R. Henderson and K. Clark, “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science, volume 35, 1990, pp. 9–30.
3. For the ice industry, see:
J.M. Utterback, Mastering the Dynamics of Innovation (Boston: Harvard Business School Press, 1994).
For glass, see:
J.B. Quinn, “Pilkington Brothers, Ltd.” (Hanover, New Hampshire: Dartmouth College, Amos Tuck School of Business Administration, Case Study B.P. 78-0148, 1978).
For software, see:
M. Cusumano, “The Software Factory: A Historical Interpretation,” IEEE Software, March 1989, pp. 23–30; and
M.H. Meyer and K. Curley, “The Impact of Knowledge and Technology Complexity on Decision Making Software Development,” Expert Systems with Applications, volume 9, no. 1, 1995, pp. 111–134.
4. Henderson and Clark (1990); and
5. Lehnerd (1987).
6. M.H. Meyer and J.M. Utterback, “The Product Family and the Dynamics of Core Capability,” Sloan Management Review, volume 34, Spring 1993, pp. 29–47.
7. Platforms, their derivative products, and platform “extensions” or renewals have been described for vacuum cleaners, electronic imaging systems, portable cassette players, and power tools. See:
S.C. Wheelwright and K.B. Clark, Revolutionizing New Product Development (New York: Free Press, 1992);
M.H. Meyer, P. Tertzakian, and J.M. Utterback, “Metrics for Managing Product Development in the Context of the Product Family” (Boston: Northeastern University, Center for Technology Management, Working Paper 95–100, February 1995) and Management Science, forthcoming;
Sanderson and Uzumeri (1993); and
8. Meyer et al. (1995).
9. P. Smith and D. Reinertsen, Developing Products in Half the Time (New York: Van Nostrand, 1992).
10. Utterback (1994); and
R. Stobaugh, Innovation and Competition(Boston: Harvard Business School, 1994).
11. W.J. Abernathy and K. Wayne, “Limits of the Learning Curve,” Harvard Business Review, volume 52, September–October 1974, pp. 109–119.
12. S. Kalenik, “Application of the Product Plarform Concept to Manufacturing Processes and the Effect on Product/Process Relationships” (Fort Collins, Colorado: National Technical University, master’s thesis, January 1995).
13. Meyer et al. (1995).
15. G. Hamel and C.K. Prahalad, “Corporate Imagination and Expeditionary Marketing,” Harvard Business Review, volume 69, July–August 1991, pp. 81–92.
16. M.H. Zack, “An Information Infrastructure Model for Systems Planning,” Journal of Systems Management, August 1992, pp. 16–19, 38–40.
17. A. Campbell, president, Corptech, Inc., speech, Northeastern University, 23 May 1994.
18. D. Packard, The HP Way (New York: HarperBusiness, 1995), pp. 117–121.