Essays on management of new technologies in manufacturing and service industries

Abstract

This dissertation studies management of new technologies in the context of manufacturing and service, respectively, focusing on different issues specific to each type of industry. The first two essays investigate cooperative decisions regarding development and ownership of new technologies between competing manufacturers, and the third essay explores the positive effects of social media marketing (SMM) activities for companies of services with high perceived risk. In the first essay, we consider firms which can individually invest a fixed cost to enter a market that generates fixed industry-wide revenue if at least one firm invests. Instead of individually investing, each firm can also invest with its rival(s) as a coalition to share their cost efficiency and their total cost while incurring an additional coordination cost. The industry-wide revenue is divided to firms in the market according to their relative market power. We characterize the stable coalition structure and examine the industry-wide efficiency of the structure for a duopoly case and a restricted three-firm case, respectively. In the second essay, we consider a Cournot duopoly model in which one firm originally owns a new process technology while the other firm originally owns an existing process technology. Compared to the existing one, the new process technology enables production with a lower unit capacity cost while involving yield uncertainty in production capacity. We show that yield uncertainty of the new process technology can increase the likelihood of the new process technology being shared whether or not transfer payment is allowed between the two firms. In the third essay, we empirically investigate how customers of non-life insurance services in Japan recognize the effects of companies' SMM activities and how those SMM activities influence customer satisfaction (SAT) and relationship strength (RS). The results indicate that the dominant dimensions of the SMM construct are Interaction, Customization, and Security whereas Trendiness fails to demonstrate a dominant role. Further results indicate that both the direct effect of SMM on RS and the indirect effect of SMM on RS with SAT playing a mediating role are positive and significant.