When faster beats better
When launching a new product or service, managers or project leaders tend to overlook one of the most important indicators – cost of delay. Delaying the launch of product might have a significant impact on the future value of the product and it´s popularity in the market. This week we have prepared for you a story of two jetliners McDonnel Douglas Dc- 10 and Lockheed/Rolls Royce L1011 TriStar.
When inferior product wins
In the study conducted by Henrich Greve and Marc-David Seidel, the focus is to investigate the advantage in determining which technologies get adopted and which do not. In the study the products that have been tracked are two wide-body jet aircrafts: McDonnell Douglas DC-10 and Lockheed Martin´s L1011 TriStar.
The aircrafts in a study, were at launch considered to be of the same quality and performance. DC-10 has been introduced to the market one year earlier then L1011. After both of these, products have entered the market, it became clearly obvious that L1011 has been superior in nearly every way.
DC-10 had multiple issues ranging from small ones such as fuel indicator being faulty, to big ones such us cargo door separating from the plane mid-flight.
In the 2 decades that the planes were produced, DC-10 has completely beaten L1011 in sales.
DC-10 has made more then twice the sales of L1011. How did an obviously inferior product, kept beating the superior product in sales for nearly 20 years?
Both planes have been developed as jets with a new type of propulsion. Both were supposed to be at the cutting edge of technology. In the development phase there were multiple hurdles to get through, even though Rolls Royce has pushed L-1011 into a corner and have delayed the launch by year in order to release a perfect product, DC-10 has dominated market for the 20 years of production only by releasing the aircraft a year before its competition.
It´s about the time, not performance
This example can show us that trends in the market do not change radically. Most of the time the products which are introduced to the market earlier then the competition, tend to perform better.
In the competition for adoption, early entry to the market can decide between the success and failure of the product, as shown in the example above, where the yearlong delay in delivery has created a scenario where inferior product has dominated the market over the product which was multiple levels inferior. It is thus important to take this metric seriously, as cost of delay can dramatically impact not just costs of the project but profits as well.