What contributes to the enhanced use of customer, competition and technology knowledge for product innovation performance? : A survey of multinational industrial companies' subsidiaries operating in China

This study extends an emerging research area in knowledge management to new product development by empirically examining the factors associated with the use of different types of knowledge flows from various sources and product innovation performance (i.e., market success of new products) in the multinational companies' subsidiaries in China. The findings seem to indicate the vitality of considering a broad spectrum of knowledge management related variables such as a subsidiary's product development strategy, market conditions it faces, its knowledge capacity and knowledge support structure. Furthermore, we found that subsidiaries with better performance are generally excel in the use of competition knowledge flow, the development of moderate innovative products, communication among different functional departments or product development groups, the codification of knowledge, and a supportive culture.     

The Effects of Mainstream and Emerging Customer Orientations on Radical and Disruptive Innovations

The merits of being customer‐oriented for firm innovation have long been debated. Firms focused on their existing customers have been argued to be less innovative. This paper distinguishes between mainstream and emerging customer orientations and examines their effects on the introduction of disruptive and radical product innovations. Radical product innovations draw on a substantially new technology and could initially be targeted at a mainstream or an emerging market. In contrast, disruptive innovations are initially targeted at an emerging market, and may not involve the newest technology. This paper hypothesizes that mainstream customer orientation is negatively related to disruptive innovation and positively related to radical innovation, and that emerging customer orientation is positively related to disruptive innovation. To test these hypotheses, longitudinal and multiple informant data from senior executives in 128 SBUs of 19 Fortune 200 corporations are analyzed, with technology scanning and willingness to cannibalize as key control variables. The results support the hypotheses, providing evidence for contrasting effects of being oriented to mainstream customers and/or emerging customers on radical and disruptive innovations. Mainstream customer orientation has a positive impact on the introduction of radical innovations but a negative impact on disruptive innovation, while emerging customer orientation has a positive effect on disruptive innovation and is unrelated to radical innovations. Technology scanning is positively related to radical innovation but not to disruptive innovation, supporting the idea that disruptive innovation may not require new technology. In contrast, willingness to cannibalize is positively related to disruptive innovation but not to radical innovation, supporting the idea that radical innovation does not require cannibalization of existing investments. Additionally, mainstream customer orientation is found to have a near‐zero correlation with emerging customer orientation, indicating that the two can coexist and can be pursued simultaneously.     

Learning by supplying

Outsourcing in many industries has advanced beyond simple component supply to encompass manufacturing of entire products, often by suppliers in emerging economies. Understanding the evolving role and capabilities of suppliers in global supply chains is thus a pressing strategic issue for suppliers and customers alike. We analyze a novel panel dataset of supply relationships in the mobile telecommunications industry to answer the following questions: What factors contribute to a supplier's ability to build technological and market capabilities? Does it matter to whom the firm supplies? Is involvement in product design important, or is manufacturing the key to learning? Do the same types of relationships that support technological innovation also facilitate successful introduction of own‐brand products, or does this require a different “locus” of learning? Copyright © 2013 John Wiley & Sons, Ltd.     

Understanding and Managing International Product Launch: A Comparison between Developed and Emerging Markets

With the developed market becoming increasingly saturated, companies have turned to the rapidly growing emerging market. To compete effectively in the global marketplace, firms need to develop global market competences, such as effective product launch. Although considerable efforts have been devoted to identifying principles of effective new product launch, most of the literature focuses on a single country (i.e., the domestic market) and provides little direct cross‐national comparison. The objective of this study is to provide a better understanding of the patterns of effective product launch in the developed and emerging markets. Drawing from the contingency perceptive, the authors propose a conceptual model that emphasizes the central role of tactical launch decisions and the need to cope with the internal and external constraints for maximum new product performance. The research model is tested on 284 new products launched in the United States and 97 in Taiwan. Although prior literature suggested certain elements of global product launch may be standardized for purposes of efficiencies, the empirical data from this study suggests that global launch requires some degree of customization. The insights of the findings reveal that while some tactical launch decisions are effective for both emerging and mature markets, some are detrimental to each other. For example, customer education preannouncement and promotion discount pricing strategy enhance new product performance and preemption preannouncement strategy upset consumers for both the Taiwan and U.S. market. However, there are some cross‐national differences. Emotional advertising strategy is generally appreciated in the U.S. market but not in the Taiwan market. For management practice, the findings suggest the distinct patterns of effective product launch for the emerging and mature market using the United States and Taiwan as examples.     

The Form of Relationship between Firm‐Level Product Innovativeness and New Product Performance in Developed and Emerging Markets

This study compares the new product performance outcomes of firm‐level product innovativeness across a developed and emerging market context. In so doing, a model is constructed in which the relationship between firm‐level product innovativeness and new product performance is anticipated to be curvilinear, and in which the nature of this relationship is argued to be dependent on organizational and environmental factors. The model is tested using primary data obtained from chief executive officers and finance managers in 319 firms operating in the United Kingdom, an advanced Western market, and 221 firms from Ghana, an emerging Sub‐Saharan African market. The model is assessed using a structural equation model multigroup analysis approach with LISREL 8.5. In the United Kingdom and Ghana, the basic form of the relationship between firm‐level product innovativeness and business success is inverted U‐shaped, but the strength and/or form of this relationship changes under differing levels of market orientation, access to financial resources, and environmental dynamism. While commonalities are identified across the two countries (market orientation helps firms leverage their product innovativeness), differences are also observed across the samples. In Ghana, access to financial resources enhances the relationship between product innovativeness and new product performance, unlike in the United Kingdom where no moderation is observed. Furthermore, while U.K. firms leverage product innovativeness to their advantage in more dynamic environments, Ghanaian firms do not benefit in this way: here, high levels of innovation activity are less useful when markets are more dynamic. If the study's findings generalize, there are a number of implications for managers of both emerging and developed market businesses. First, managers in both developed and developing market firms should focus on determining and managing an optimal balance of novel and intensive product innovativeness within the context of their unique institutional environments. Second, for emerging market firms, a market orientation capability helps businesses leverage local market intelligence, enabling them to compete with multinational giants flocking to emerging markets, but typical developed market learning approaches may be insufficient for multinational firms when seeking to compete in emerging markets. Third, for emerging market firms, access to finances helps deliver product innovation success (although this is not the case for developed market firms, possibly due to strong financial institutions). Finally, unlike developed market firms, burdened by institutional voids at home, emerging market firms appear to be less capable of competing on an innovation front in more dynamic market conditions. Accordingly, policymakers in emerging markets should consider identifying ways to help businesses raise market orientation levels, and seek to create conditions that enhance access to financial capital (e.g., direct financing, matching grants, tax rebates, or rewarding firms that innovate creatively and intensely). Likewise, since environmental dynamism is likely to be a growing issue for emerging markets, efforts to help firms become more adept at keeping up with more agile developed market counterparts are needed.     

非均衡条件下技术扩散路径的理论辩争与现实选择——基于辽宁装备制造业的经验性分析

以非均衡条件为背罱,在对比分析“比较优势”和“逆比较优势”的基础上,提出应按照中国（以辽宁省为例）具体的资源禀赋条件,产品、市场结构和区位优势,大力发展和振兴传统产业中的装备制造业。通过对技术引进和技术自主创新经验的分析总结,文章得出了以技术自主创新为主线,以技术创新体系为依托,创建出多元技术进步方式和扩散途径的基本结论。     

The impact of SME internationalization on innovation: The mediating role of market and entrepreneurial orientation

In today's highly competitive global environment, even small and medium-sized enterprises (SMEs) need to make product and process innovations in order to outperform the competition and satisfy global customers. Investigating the success factors of innovation performance has become critical for the survival and competitiveness of SMEs. The aim of this study is to explore the impact of the degree of internationalization (DoI) on innovation performance through the mediating factors of market and entrepreneurial orientation in the context of emerging-market SMEs. We tested our model and hypotheses with 235 SMEs in the United Arab Emirates, which is an emerging market. The results obtained from partial least squares estimates indicate that the degree of internationalization positively affects innovation performance and, more importantly, that this relationship is indirect and fully mediated by market and entrepreneurial orientation for SMEs. These results shed light on the mechanism of the effect of DoI on innovation performance in the emerging-market SME context.     

新兴经济大国中间产品创新驱动全球价值链攀升——基于中国经验的解释

本文在全球价值链分工框架下,基于中国的实践,提出新兴经济大国中间产品创新驱动全球价值链攀升的机制与路径,即利用低成本的比较优势获取发达经济体中低端中间产品外包,通过国内生产体系的规模经济与范围经济,引致国内中间产品的创新,实现进口替代,进而引发技能偏向性技术进步以及来自发达经济体的知识溢出与研发合作。上述机制共同推动着中国向全球价值链高端持续攀升。实证检验发现,中国制造业中间产品创新对全球价值链分工地位的影响存在显著的滞后效应和累积效应,对间接出口国内附加值率的提升作用、对高技术制造业的促进作用更明显;进口技术溢出对中国制造业全球价值链攀升有一定的负向效应,但随着中间产品创新能力的不断提升,负向效应明显下降;在向全球价值链高端攀升的过程中,随着中国制造业高技能劳动力和本土市场规模的不断增长,中间产品创新对全球价值链攀升的正向影响增强。本文的政策含义是,持续深化对外开放,尤其是促进创新、知识和科技服务贸易自由化;提高国内创新体系效率;扩大高技能劳动力教育供给与国际研发合作;提高国内中间产品R&D投入强度,逐步降低对G5发达经济体中间产品的依赖,释放国内巨大市场规模的效应,持续推动中国制造业向全球价值链高端攀升。     

Technological and non-technological innovations,performance and propensity to innovate across industries: The case of an emerging economy

Innovation in a firm may be non-technological, such as organizational and marketing innovation, and technological, such as product and process innovation. The aim of this article is to explore how different types of innovation affect the innovation development of the firm across industries. We chose Chile as an emerging market context. Our results show that only product innovations affect significantly innovation performance across industries. However, different types of propensities to innovate are affected differently by technological and non-technological innovations. We discuss implications for managers and policy makers in emerging economies, in which data tends to be scarce to develop new policy models and increase the effect of non-technological innovation on innovative performance.     

The Effects of Supplier Involvement and Knowledge Protection on Product Innovation in Customer–Supplier Relationships: A Study of Global Automotive Suppliers in China

Globalization drives firms to develop product innovation through their global supply chains. While innovations generated by supply channel members, as opposed to individual partners, are playing an increasingly important role in the success of all supply chain partners, there has been limited research on how supply chain relationships cultivate the process of such innovation generation, particularly in emerging markets. Correspondingly, this study explores how multinational suppliers can develop adaptive product innovation to create competitive advantage in emerging markets. Drawing on the knowledge‐based view and transaction cost economics, this study investigates the influence of supplier involvement and other factors on supplier innovation and performance. The results of a survey of 170 multinational automobile suppliers in China provide support for most of the hypotheses. Specifically, supplier involvement in codesign has an inverted U‐shaped relationship with product innovation. Furthermore, knowledge protection, trust, and technological uncertainty are all found to drive greater product innovation. In addition, the institutional environment moderates the effect of product innovation on performance. Overall, this study enhances our understanding of how MNEs can acquire local knowledge and develop adaptive products in emerging markets.     

Industrial product innovation: An international comparison

This paper presents and discusses the data obtained from a study of 500 industrial innovations introduced in major industrialized countries from 1953 to 1973. The trends in industrial innovation of both the country of origin and the country of market introduction are examined based on the data presented.     

Diffusion of mobile handset features: Analysis of turning points and stages

Mobile handsets have evolved into advanced devices with a rich variety of hardware and software features enabling the use of variety of applications, networks, and services. Consequently, mobile handset features constitute an important part of the global communications infrastructure. Modelling the diffusion of mobile handsets as a product category is becoming less relevant as the market is approaching saturation especially in the developed countries. Simultaneously, the diffusion of mobile handset features is increasingly important and of interest to many stakeholders. This article analyzes and compares the diffusion patterns of mobile handset features, using a longitudinal annual dataset of the penetrations of 15 different features in Finland between 2005 and 2010. Two major turning points – the takeoff and the inflection point – as well as the durations of the diffusion stages between these points are determined. The results show large variations between different features, highlighting the significance of the introduction stage in the diffusion process. The results are useful for regulators and companies in understanding the pace of change taking place in the communications infrastructure.     

Innovation and Product Development Strategies in the Italian Motorcycle Industry

The motorcycle industry in Italy offers fertile ground for anyone interested in developing a better understanding of the role innovation plays in enhancing a firm's competitive position. This industry includes both domestic and Japanese firms, with companies ranging from high-volume manufacturers to specialty or niche producers. Firms trying to gain a competitive edge in this crowded field must contend with not only advances in product and process technology, but also the whims of fashion. In a survey of top-level marketing and product development managers from eight leading firms in the Italian motorcycle industry, Moreno Muffatto and Roberto Panizzolo explore the innovation models these firms employ to enhance their competitive position. Their study has the following objectives: categorizing the various competitors in terms of their product and market strategies and their product development and innovation strategies; highlighting differences between the methods of Italian and Japanese firms competing in this market; analyzing the relationships between firms, as well as the roles suppliers play in the various innovation strategies; and identifying the various organizational models employed by the firms in this industry. Different product and market strategies are identified on the basis of three variables: total production volume, the number of different products offered, and the number of different engine capacities offered. Using these variables, the companies in the study are categorized as volume producers, specialists, or niche specialists. The firms are further differentiated on the basis of the relative emphasis each places on product technology and design, product innovation, product variety, and time-based competition. In the firms studied, partnerships play a key role in new product development. Nearly every firm participates in joint projects, most often involving development of either an entire vehicle or an engine. Other partnerships involve firms in countries that offer emerging markets for the motorcycle industry. Organizational structures and strategies employed by the volume producers in this study include: the large product leader, who oversees concept definition and product planning; the project leaders group, which coordinates all phases of development, including activities assigned to external groups; the project managers matrix, a matrix organizational structure with a strong product orientation; and the business unit program manager, who oversees all projects within an independent business unit.     

技术创新外部性与重复技术创新博弈研究

从博弈论视角来看,技术创新中博弈参与人的个体利益与整体利益的不一致,可能造成“囚徒 困境”的状况。企业之间无限次重复技术创新博弈模型表明,静态技术创新博弈中的“囚徒 困境”可能在无限次重复技术创新博弈中解决,但这一可能性受到企业的得益贴现因子、本企业技术创新收益与成本、技术创新外溢收益、技术创新外溢学习成本等因素的影响。     

Can me‐too products prevail? Performance of new product development and sources of idea generation in China – an emerging market

New products developed in emerging markets such as China, India and Brazil are not only sold locally but also ‘exported’ globally, suggesting a changing landscape for global innovation. Existing literature in technology learning and capability accumulation has long held the claim that, for a certain period of time in their development, firms in latecomer countries rely on their counterparts in developed countries to get new product ideas. However, existing research in this area is generally based on case studies and historical analyses; there are few empirical studies exploring the performance consequence of learning from competitors abroad. Using large‐scale, nationwide survey data from China, we explore specifically whether learning about new product ideas from leading firms in foreign countries will lead to higher performance outcomes than other sources (i.e. domestic competitors, customers, universities or internal departments) in an emerging market. Our findings suggest that Chinese firms that source new product ideas from leading firms in foreign countries achieve overwhelmingly superior performance along financial, customer and technological dimensions. Implications to the managers and policy makers are also discussed.     

Market-based reforms,synchronization and product innovation

This paper focuses on the multiple dimensions of market-based reforms and their impacts on firms’ product innovation performance in China, the largest emerging country in the world. By analyzing a data set with more than one-half-million observations on firms during China's economic transition during the period 2005–2007, we find that the progress of market-based reforms and the degree to which different dimensions of market-based reforms are conducted simultaneously, referred to as synchronization, have a positive effect on firms’ product innovation. We also find that firms with higher absorptive capacity benefit more from market-based reforms and the synchronization of different dimensions of market-based reforms.     

The drivers of success in new-product development

Why are some new products so successful and some companies outstanding performers in new-product development? The article identifies success factors from numerous research studies into NPD (new-product development) performance in industry. Three categories of success drivers have been defined. First, success drivers, that explain the success of individual new-product projects, are more tactical: They capture the characteristics of new product projects, such as certain executional best practices (building in voice-of-customer; doing the front-end homework; and adopting a global orientation for the project), and well as the nature of the product itself (a compelling value proposition, for example). A second category is drivers of success at the business level: They include organizational and strategic factors, such as the business's innovation strategy and how the firm makes its R&D investment decisions; how it organizes for NPD; climate and culture; and leadership The third category of success divers identified is the systems and methods the firm has in place for managing NPD, for example gating systems, Agile development approaches, and ideation methods. The details of each of these 20 success drivers, along with their managerial implications, are outlined in the article.     

Barriers to Matching New Technologies and Market Opportunities in Established Firms

In industries that produce high‐technology products or are reliant on technology for administrative or manufacturing processes, it is essential appropriately to link technologies to markets in order to increase shareholder value and to build future cash flows. Research and development (R&D) allocations in such industries are greatly dependent on forecasts of the R&D project's estimated potential contribution to future cash flows, which is related to the project's ability to satisfy current or future customer needs. The resource allocation decisions are difficult, however, since both markets and technology are likely to be highly uncertain. Although the innovation literature ably has addressed specific relationships between certain factors and new product development outcomes, less attention has been given to obstacles faced in linking technology to markets. Grounded in a literature‐based discussion of technology and market opportunity, the authors develop a conceptual framework for identifying and understanding the barriers facing managers in the process of matching technologies to market opportunities. Technology and market barriers include technology‐market linkage, technology availability, technology and market capabilities of competitors, and business model feasibility. Strategy and structure barriers include competition for limited resources, technology capabilities, technology portfolio goals, current market strategies, and competition for control of market charters. Social and cultural barriers include interpretive and communication barriers between functional units and language and cultural barriers within the technology workforce. The article concludes with implications for researchers and managers. The conceptual framework presented here can encourage the development of a stream of research in the area of technology strategy and planning processes, allowing researchers to improve our understanding of the process of technology innovation. Managers can use the framework as a guide for addressing a wide range of issues related to the process of matching technologies to market opportunities. For example, rather than relying strictly on cash flow projections for estimating the value of a new technology, managers also should consider how the technology could create new market opportunities or could reshape existing ones.     

Innovations—Doomed to Fail? Investigating Strategies to Overcome Passive Innovation Resistance

The constant and successful market introduction of new products is of major concern to companies throughout all industries. However, empirical research points to high failure rates of innovations, indicating that most new products fail as they are rejected by consumers due to their resistance to innovation. Several studies have confirmed the importance of passive innovation resistance as a dominant barrier, which has to be overcome before new product adoption can start. However, empirical evidence on how to overcome passive innovation resistance is still lacking. This study intends to address this gap by evaluating the effectiveness of marketing instruments (i.e., mental simulation and benefit comparison) to reduce negative effects of passive innovation resistance on new product adoption. The results of a scenario‐based experiment (n = 679) confirm high effectiveness for both instruments. However, the effectiveness varied with the type of passive innovation resistance present. More specifically, mental simulation was found to be the most effective instrument in the case of cognitive passive resistance, whereas benefit comparison was found to be most effective in the case of situational passive resistance. Thereby, the effect of both marketing instruments was stronger the more radical the new product was perceived. Hence, companies should assess the type of passive innovation resistance that is predominant in their target market, and align their choice of marketing instruments that accompany a new product launch to most effectively overcome passive innovation resistance. Employing such new product launch tactics should decrease initial market resistance and thus help companies in reducing innovation failure rates.     

Success in Global New Product Development: Impact of Strategy and the Behavioral Environment of the Firm

Product innovation and the trend toward globalization are two important dimensions driving business today, and a firm's global new product development (NPD) strategy is a primary determinant of performance. Succeeding in this competitive and complex market arena calls for corporate resources and strategies by which firms can effectively tackle the challenges and opportunities associated with international NPD. Based on the resource‐based view (RBV) and the entrepreneurial strategic posture (ESP) literature, the present study develops and tests a model that emphasizes the resources of the firm as primary determinants of competitive advantage and, thus, of superior performance through the strategic initiatives that these enable. In the study, global NPD programs are assessed in terms of three dimensions: (1) the organizational resources or behavioral environment of the firm relevant for international NPD—specifically, the global innovation culture of the firm and senior management involvement in the global NPD effort; (2) the global NPD strategies (i.e., global presence strategy and global product harmonization strategy) chosen for expanding and exploiting opportunities in international markets; and (3) global NPD program performance in terms of shorter‐ and longer‐term outcome measures. These are modeled in antecedent terms, where the impact of the resources on performance is mediated by the NPD strategy of the firm. Based on data from 432 corporate global new product programs (North America and Europe, business‐to‐business, services and goods), a structural model testing for the hypothesized mediation effects was substantially supported. Specifically, having an organizational posture that, at once, values innovation plus globalization, as well as a senior management that is active in and supports the international NPD effort leads to strategic choices that are focused on making the firm truly global in terms of both market coverage and product offering. Further, the two strategies—global presence and global product harmonization—were found to be significant mediators of the firm's behavioral environment in terms of impact on performance of global NPD programs.