Time-to market capability as a Stackelberg growth option

This paper examines the decision to invest in logistics, market profiling and distribution capabilities that allows a firm to seize market share by being able to deliver a product ahead of competitors. This has the strategic effect of restraining competitors behavior, and may justify the early commitment of such investment eve when waiting offers some option value due to uncertainty on demand. We show that the value of time-to-market investment is unambiguously increasing in such uncertainty. Finally, we show that when all competitors share this investment opportunity, the resulting lrush to the marketn consumes resources without enhancing profitability.