The Product Flexibility Technology Decision of Start-ups in New Product Market

The paper considered a start-up that manufactured two products. It could invest in product flexibility technology or dedicated technology, and the paper studied the product flexibility technology decision of this start-up. After modeling the capacity investment decision of the start-up under the 2 technologies, the optimal capacity and survival probability of the start-up were obtained, and then the start-up's technology choice was discussed and the result was compared with an established firm. The result shows that compared to the established firm, the start-up is more likely to choose dedicated technology. Moreover, it's best for the start-up to choose product flexibility technology when the debt is higher and the cost difference between product flexibility technology and dedicated technology is lower.