- P-ISSN1738-6764
- E-ISSN2093-7504
- KCI
ISSN : 1738-6764
Inter-divisional Domain Overlap and Product Differentiation
Abstract
Using data on the U.S. automobile industry between 1979 and 1999, we have investigated the impact of inter-divisional domain overlap on a division's product differentiation vis-<TEX>$\grave{a}$</TEX>-vis sister divisions. The results show that the higher the level of inter-divisional domain overlap, relative to the focal division's own domain, the higher the chances of locating a new product closer to the existing products of a sister division, thereby decreasing product differentiation vis-<TEX>$\grave{a}$</TEX>-vis this sister division. We argue that this is due to a high level of similar capabilities between the two divisions and the division with less distinctive capabilities may have little choice but to launch a new product that is close to the products of the other division.
- keywords
- Product Differentiation, Inter-divisional Domain Overlap, Capabilities
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