Related and unrelated product diversification and collaboration strategies: Comparison between the pharmaceutical and biopharmaceutical industries.
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| Title: | Related and unrelated product diversification and collaboration strategies: Comparison between the pharmaceutical and biopharmaceutical industries. |
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| Authors: | Kim, Keungoui1 (AUTHOR), Lee, Junmin2 (AUTHOR), Hwang, Junseok3 (AUTHOR), Kim, Eungdo4 (AUTHOR) edkim@chungbuk.ac.kr |
| Source: | Journal of Product Innovation Management. Jul2022, Vol. 39 Issue 4, p559-580. 22p. 5 Charts, 1 Graph. |
| Subjects: | Diversification in industry, Pharmaceutical industry, Organizational performance, New product development, Clinical trials |
| Abstract: | In pharmaceutical and biopharmaceutical industries, developing and commercializing products require great investments and intensive clinical trials. With regard to managing the risk and uncertainty of such product development, especially given the low success rates, product diversification and collaboration strategies can be instrumental for firms. Especially, the differences in product development complexity and market condition among industries require more case‐specific implications due to the absence of a universally applicable strategy, even in these two similar industries. To date, little is known or discussed regarding whether product diversification and collaboration strategies work differently by industry and to what extent their impact differs across industries. Accordingly, this study examines the impact of product diversification on firm performance and compares the diversification effects between the pharmaceutical and biopharmaceutical industries. Related product diversification (RPD), which involves diversifying existing product functions, and unrelated product diversification (UPD), which involves diversifying the selling market, are considered here, and their linear and curvilinear effects are examined for each industry. Furthermore, the mediating role of product diversification in the relationship between collaboration and performance is examined to explore diversification through collaboration and the effect of collaboration on firm performance. For empirical analysis, an integrated firm‐level dataset combining a full set of commercialized product information, collaboration, and statistics from Medtrack and Compustat are used. The results indicate that RPD enhances pharmaceutical firms' performance, while RPD and UPD contribute to biopharmaceutical firms' performance. In both cases, mediating effect of product diversification is found; however, collaboration is found to play different roles, thereby showing that collaboration enhances product diversification for pharmaceutical firms, while for biopharmaceutical firms it negatively affects product diversification, but positively affects performance. This study contributes to the literature by providing empirical evidence on how diversification should be treated differently across industries by considering product development complexity and market maturity. [ABSTRACT FROM AUTHOR] |
| Copyright of Journal of Product Innovation Management is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) | |
| Database: | Engineering Source |
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