Parallel and sequential R&D strategies: Application of a simple model

It is common in technological development to identify and explore several approaches to a particular objective so that the best approach may be chosen. The outcome of any approach is uncertain; hence, it is difficult to choose the best one at an early date. To deal with this uncertainty, two or more approaches to the objective may be continued in parallel until a clear choice between them can be made, i.e., a parallel strategy. Such a strategy can provide better information for a decision, maintain options, or hedge against the occurrence of an unsatisfactory outcome. This paper addresses the manager's problem of deciding when to use or continue a parallel strategy. The principal focus is based on studies of 14 projects and illustrates the application, in one setting, of a general model appropriate to the structure of the decision as it is widely faced in practice. It discusses the information requirements for a sound choice between parallel and sequential strategies and the consequences of choosing a strategy on the basis of incomplete information.