Follow or Not Follow? Supplier's Technology Upgrading R&D Investment Strategy Considering Product Life Cycle

A supply chain will evolve with the product updating and different stages of the product life cycle. When the downstream manufacturers initiate new-technology products with emerging technology to the market, the upstream suppliers who independently carry out innovative R&D need to make R&D investment decisions on supporting parts for new-technology products with consideration of the product life cycle stage of the existingtechnology products. On the basis of Norton-Bass model and repeated purchasing multi-generation innovation diffusion model, this paper considers the influence of demand for new-technology products and product prices on the diffusion process of both existing-technology and new-technology products. A joint diffusion model of existingtechnology and new-technology products is proposed to study the impact of existing-technology products in different product life cycle stages on supplier’s R&D decision-making. The results show that, if manufacturers introduce newtechnology products to the market with slow product diffusion speed, suppliers will choose to invest in R&D of newtechnology product parts immediately or never invest according to their own R&D capabilities. If manufacturers introduce new-technology products with rapid product diffusion speed, suppliers will choose to develop parts for new-technology products when existing-technology products remain in their mature stage or never invest in R&D according to their own R&D capabilities