ABSTRACT
Many newly launched products suffer from high failure rates because they simply have no market (Ogawa and Piller 2006). Ultimately, the consumer decides a product’s fate. An added force behind this fact is that Web 2.0 allows users to interact and collaborate online at digital speed. So, what if the user is involved in a new product development process? According to our analysis, based on numerous real case studies using The Wisdom of Crowds (Surowiecki, 2004) (i.e., crowd-wisdom) via Crowdsourcing (Howe, 2006), we construct a Crowd-Wisdom Strategy business model as a source of constant market value-creation and positive word-of-web. From our conceptual model, we localize the “Crowd-wisdom” to a crowd’s ability to generate ideas and evaluate ideas. From our three empirical studies, we provide proof-of-concept that (1) the Crowd has a high ability to evaluate even a complex new product’s market value before it comes to market (even better than experts), (2) even though the Wisdom of Crowds effect is more accurate without social influence, its accuracy increases over time under conditions of social influence and (3) Crowd wisdom pertaining to new-product idea generation improves its market value significantly, both in terms of ratings and comments after just one integration of the Crowd into the new product development process.
