Improving Supplier New Product Development Performance: The Role of Supplier Development

Suppliers play an increasingly central role in helping firms achieve their new product development (NPD) goals. The literature implicitly assumes that suppliers are able to meet or exceed the quality standards and technological expectations of the firm, and yet, in practice, suppliers often lack the technological capabilities needed to undertake collaborative NPD. In such situations, a firm may choose to intervene and actively develop the supplier's technological and product development capabilities. We develop a theoretical framework that conceptualizes supplier development activities within interorganizational NPD projects as part of a bilateral knowledge‐sharing process: design recommendations, technical specifications, and new technology flow from supplier to the firm, and in turn, the firm can implement supplier development activities to upgrade the supplier's technological capabilities. Antecedents (supplier responsibility, skills similarity, single sourcing strategy) and consequences of supplier development activities (on supplier, product, and project performance) are examined using a sample of 153 interorganizational NPD projects within UK manufacturers. We find broad support for our hypotheses. In particular, we show that the relational rents (in the form of improved product and project performance) attained from supplier development activities in new product development are not achieved directly, but rather indirectly, via improvements in the supplier's creative and technological capabilities. Our results emphasize the importance of adopting a strategic view of the potential returns available from investing in the NPD capabilities of key suppliers, and provide clues about underlying reasons for the suboptimal experiences of many companies' collaborative NPD projects.     

Successful Product Development after Firm Acquisitions: The Role of Research and Development

A major reason for carrying out a merger and acquisition (M&A) is to gain access to technological knowledge and to increase new product development (NPD) capabilities. To achieve the desired effect of improving a firm's capacity for innovation, this knowledge must be combined with the acquiring firm's existing resources. Previous research, however, has made it clear that M&A transactions tend to disrupt a company's innovation processes, resulting in reduced investment in research and development (R&D) activities as well as a lower innovative output in terms of patents and new products introduced to the market. In this regard, a successful postmerger integration of the firms' R&D units plays a decisive role. Conceptually, this exploratory article distinguishes between the strategic approach to integration and the integration instruments or measures to be employed within the approach. Whereas the former sets the general strategic direction of the integration or, in other words, establishes some kind of acquisition posture, the latter describe the relevant fields or dimensions to be addressed during integration. These integration strategies and instruments are subsequently investigated in a sample of 35 M&A transactions. It is shown that companies typically revert to three distinct integration strategies, depending on the need for strategic interdependence and organizational autonomy: symbiosis, absorption, and adjustment. Together with the integration instruments that relate to structural linking, process redesign, systems standardization, and culture building, the integration strategies are analyzed using seemingly unrelated regression models. It turns out that technological success and, hence, NPD capabilities benefit most from a symbiosis and an absorption strategy. Apparently, only wide‐ranging reorganization efforts in R&D focussing on common structures, processes, and systems can fully realize the benefits from a combination of resources. To achieve economic success or high integration quality, an adjustment strategy appears to be the best choice as reorganization efforts are rather limited. With respect to the integration instruments, the research shows that the structural linking exhibits a great impact on technological and economic success but no effect on integration quality. Obviously, common structural patterns and interlinked structures within the R&D units have a positive effect in that they facilitate better collaboration and research outcomes. A common organizational structure hence serves as a basis for realizing innovative resource combinations and streamlining the NPD process. A standardization of systems exhibits strong positive links with all success variables. Apparently, a consistent unification, offering orientation and comparability, is of high importance to achieve the best possible implementation of the integration and to foster innovative capabilities. Significant effects of culture building can be substantiated for economic success. Moreover, there tends to be a positive effect on integration quality. This underpins the importance of measures to encourage the build‐up of a common corporate culture. To sum up, the research provides a couple of insights on how to strengthen NPD capabilities following a merger.     

High‐Performance Product Management: The Impact of Structure,Process, Competencies,and Role Definition*

Product management is one of the most important functions in marketing. Yet the product management literature has focused largely on creating successful products and has relatively little to say about creating effective product management organizations. This paper focuses on the organizational determinants of high‐performance product management at three levels: (1) the product manager as an individual; (2) the marketing processes related to product management; and (3) the organization structure and role definition. The paper identifies several key factors that potentially impact product management performance. A set of qualitative interviews is conducted to develop hypotheses related to constructs that may drive product management performance. These hypotheses are used to develop a causal model for product management performance that includes constructs related to roles and responsibilities, organization structure, and marketing processes related to product management. An empirical survey of 198 product managers from a variety of industries is conducted to test the causal model. The results of the causal model suggest that performance of a product management organization is driven by structural barriers in the organization, the quality of marketing processes, roles and responsibilities, and knowledge and competencies. The findings suggest that structural boundaries and interfaces are the biggest impediment to effective product management, followed by clarity of roles and responsibilities. The research highlights the importance of organization structure and effective human resource practices in improving product management performance.     

The Role of the User in Successful New Product Development

Abstract: The purpose of the study reported in this paper is to examine the view that one of the reasons for the poor performance of British companies in certain engineering industries may be the relatively low technical sophistication of its domestic customers. Data for the study were collected predominantly by mail questionnaire from customer organisations in Great Britain and West Germany. The results of the study suggest that British customers are significantly less receptive to new technology than their West German counterparts, and less demanding of new technology from their suppliers. Given the importance of the domestic customer to new product development activity this appears to be a major problem for British suppliers, and suggests an alternative approach to public policy designed to improve the innovative performance of British Industry in these sectors.     

品牌服装公司产品开发的买手制运作模式

买手制作为新兴的行业运作模式,越来越受到业内人士的瞩目。本文主要介绍品牌服装公司内部的买手机制,分析我国服装企业的产品开发现状,探讨现阶段国内服装品牌买手制的成因、运作模式和品牌服装设计师之间的关系以及未来前景。     

The Role of Objective In Vivo Testing in the Product Development Process

New products managers are continually confronted by the challenge of coordinating flows of complex information during the product development process. Among the issues faced are unique problems in relating technical design of product attributes to customers' reactions, leading to an improvement of the product's benefits. Ronald Drozdenko and Sidney Weinstein describe a variety of tests which help to assess customers' reactions to products, thus providing information to improve the design or to substantiate advertising claims. The term "objective in vivo" is given to a category of tests which is employed to quantify consumers' evaluation of specific product attributes under controlled, simulated use conditions. This helps to bridge the gap between tests which are designed to measure the physical or functional aspects of new products and tests which measure the consumers' self-reported, subjective reactions. A test categorization model, illustrative case studies, and test selection criteria are presented.     

The Role of Market and Technical Information Generation in New Product Development

Firms are investing an increasing amount of time and resources to gather information about market and technology in new product development (NPD). Yet there is a lack of consistent understanding of whether such costly information generation activities can improve product outcomes. More importantly, it is unclear how the benefit of market information and technical information generation may differ and how they may jointly impact new product performance. This study examines the role of market and technical information generation in NPD in three ways: (1) It contrasts the effects of market and technical information generation on product outcomes; (2) it identifies conditions that moderate the effects of market and technical information generation and further investigates how the moderating effects differ for these two types of activities; and (3) it examines the joint effect of market and technical information generation to understand potential synergies between them. Using survey data at the NPD project level, we find that market information generation has an inverted U‐shaped effect on new product advantage, whereas the effect of technical information generation follows a U‐shape. Furthermore, these effects are moderated differently by two conditions: a firm’s R&D intensity that influences NPD projects’ need for different types of information, and the use of multidisciplinary teams that affects the degree to which information can be shared and utilized to improve product design. The findings provide important implications for organizational learning and shed light on how to manage information generation activities to achieve NPD success.     

The Valley of Death as Context for Role Theory in Product Innovation

The purpose of this paper is to define and explain the front end of product innovation as a discrete segment of development between research and product development. The Valley of Death is used as a metaphor to describe the relative lack of resources and expertise in this area of development. The metaphor suggests that there are relative more resources on one side of the valley in the form of research expertise and on the other side by commercialization expertise and resources. Within this valley a set of interlocking roles are examined that move projects from one side to the other. The empirical methodology used in this study gathered data from 272 Product Development & Management Association (PDMA) members with extensive experience in the front end of product development using a Web‐based survey instrument. Extensive pretests with experienced practitioners were conducted to develop the instrument. Results indicate that significant development takes place before projects enter into a firm's formal product development process. The data also support the roles of champion, sponsor, and gatekeeper as major actors that work together to develop and promote projects for introduction into the formal process. Champions make the organization aware of opportunities by conceptualizing the idea and preparing business cases. Sponsors support the development of promising ideas by providing resources to demonstrate the project's viability. Gatekeepers set criteria and make acceptance decisions. The data also reveal a dynamic interdependence between role players. It is concluded that the Valley of Death is a productive tool for identifying and understanding a critical area of development that has not been adequately addressed. This research finds a dynamic interplay between roles to accomplish tasks that are not well understood in practice or the literature. The implications of this research are far‐ranging. It suggests that companies must understand the challenges in the valley, must develop the skills, and must make resources available to master the front end of product innovation. Recognizing roles, providing resources, and establishing expectations and accountability in this area of development become manageable in light of these results. Theoretically, this research informs role theory of a dynamic set of relationships previously treated as static. It also empirically investigates an area of product development where there is limited data. This paper opens profitable inquiries by focusing on an area of development not adequately researched yet drives the activities and investment made in subsequent steps of product development.     

New Product Development Processes and New Product Profitability: Exploring the Mediating Role of Speed to Market and Product Quality

In new product development, faster is not always better. Conceptually, being faster to market should improve financial performance by improving product quality and reducing development expenses. Empirical support is mixed, however, demonstrating that higher speed to market exhibits an inverted U‐shaped relationship with product profitability. Conventional wisdom and empirical research suggest managers make speed to market–product quality–development expense trade‐offs. A particular concern regarding speed to market is that extreme speed may jeopardize product quality. Some researchers suggest that speed to market improves product quality while others suggest firms must balance both speed to market and product quality. Also, shorter lead times may be associated with reduced development expenses, but empirical evidence is conflicting. This research attempts to reconcile conflicting results regarding the speed to market–product quality relationship, their joint impact on product profitability, and their mediation role in the effects of development expenses and cross‐functional integration on product profitability. Partial least squares (PLS) is used to analyze multiplexed archival and survey data collected from NPD managers for 1115 different NPD projects in several firms. The results support the hypothesized equations, explaining 27% of speed to market variance, 35% of product quality variance, and 45% of product profitability variance. This study makes two contributions. First, because speed to market and product quality are related, simultaneous consideration of both factors enhances insight into their joint effect. Second, it provides evidence that speed to market and product quality jointly mediate development expense by NPD phase and cross‐functional integration effects on product profitability. Key results from the large sample data analysis include the following. Speed to market and product quality both enhance product profitability, but the impact of speed to market is larger than that of product quality. Speed to market and product quality partially mediate the impact of fuzzy front end phase expenses on product profitability, while expenses in the latter phases exhibit no impact on the mediators or profitability. Thus, the results suggest that trade‐offs are made not only between time, quality, and expense (i.e., if additional expenses are incurred at all), but also that trade‐offs relate to when (i.e., in which NPD phase) additional development expenses are incurred. Finally, cross‐functional integration (both internal and external) substantially impacts product profitability through a mix of direct and mediated effects.     

New Product Development in the Pharmaceutical Industry: Pooling Network Resources

Pharmaceutical innovation increasingly involves some pooling of resources of finance, equity, technology, information, and intellectual property between pharmaceutical companies and other organizations. The organizations and their exchanges constitute a network which can be regarded as a growing store of these varied resources preferentially accessible to network members. D. Jane Bower examines some network effects in management decision making in Ciba-Geigy (Switzerland) and Elan Corporation (Ireland). She concludes that participation in a common network has enabled these firms to access a pool of resources of knowledge, experience, and finance. This pool has been generated by past exchanges among network members, including providers of finance, and has increased the network's collective reservoir of knowledge.     

Integration of Finance with Marketing and R&D in New Product Development: The Role of Project Stage

While the interfaces of marketing, research and development (R&D), and manufacturing in product development have been extensively studied, no large‐scale empirical study has focused on finance's role in the product development team. The present research investigates the role of finance in cross‐functional product development teams, thereby extending existing research on cross‐functional integration in product development. A set of hypotheses is tested with a survey of 389 project team leaders and top management team members from companies in the United States, Australia, New Zealand, Germany, and Austria. The findings suggest that the integration of finance in cross‐functional teams positively impacts project performance and that the importance of the finance interface depends on the project development stage and the innovativeness of the product developed. The results indicate that the R&D–finance interface is most critical at the early stage of a project, while the marketing–finance interface is most important at the late stage, and that the integration between R&D and finance is especially useful in the development of less innovative products.     

Product Development as Core Competence: How Formal Product Development Practices Differ for Radical,More Innovative,and Incremental Product Innovations

Although universally recognized as an important consideration in building product development (PD) competency, the effect of a firm's ability to vary its PD practices to develop winning products has been given scant attention in large‐scale, multiorganizational, quantitative studies. This research explores differences in formal new PD practices among three project types—incremental, more innovative, and radical. Using a sample of 380 business units, this research investigates how development practices differ across these three classes of innovation with respect to the formal PD process, project organization, PD strategy, organizational culture, and senior management commitment. Our results diverge from several commonly held beliefs about formal PD processes and the management of radical versus incremental innovations. Our results indicate that radical projects are managed less flexibly than incremental projects. Instead of being an offshoot of less strategic planning, radical projects are just as strategically aligned as incremental projects. Instead of being informally introduced entrepreneurial adventures, radical projects are often the result of more formal ideation methods. While these results may be counterintuitive to suppositional models of how to radical innovation happens, it is the central theme of this research to show how radical innovation actually happens. Our findings also provide a foundation for reexamining the role of control in the management of innovation. As the level of innovativeness increased, so too did the amount of controls imposed—e.g., less flexibility in the development process, more professional, full‐time project leadership, centralized executive oversight for new products, and formal financial assessments of expected NP performance.     

Fostering Innovation in Complex Product Development Settings: The Role of Team Member Identity and Interteam Interdependence*

Much of the existing research on innovation has concentrated on the study of individuals in small group settings. However, projects marked by multiple teams, high task interdependence, long duration, and large scale have become increasingly common in practice. Very little is known about how extant research findings related to innovation may generalize to such complex settings. Taking a multilevel theoretical approach, individuals' propensity to innovate is hypothesized as the product of individuals' relationship with their work team (team member identification) and their team's relationship to other teams within the organizational system (interteam interdependence). A large, diversified manufacturing firm engaged in a multibillion dollar project that involved the development of a technologically intense, highly innovative, new product served as the research site. Based on archival and survey data (n=118), five hypotheses were tested. The findings indicate that individuals' strong team identification and their perceptions of high interteam interdependence each had positive main effects on individuals' intentions to innovate. However, these two variables also interacted negatively to significantly decrease innovation intentions. Therefore, high identification with team may lead individuals to view interdependence with another team as a threat deflecting attention from innovation. The finding related to the role of identity, although consistent with work linking identity to other team behaviors, usefully broadens the reach of identification theories to demonstrate their impact on innovation. Additionally, this study is the first to demonstrate the impact of interteam interdependence on innovation. The alternative operationalizations of interdependence used in this paper highlight the fact that it must be strongly perceived and experienced by individuals to affect their innovation attitudes. The findings of this study also have implications for managerial practice in complex project settings. Since team identification has a direct effect on innovation, managers might employ strategies related to the creation of social bonds to complement task related connections among team members. Further, managers should configure staffing and incentive mechanisms to reinforce team identification. Finally, the results suggest that managers need to carefully attend to individuals' perceptions of each team's interdependence with other teams. Although perceptual interdependence can be an enabler of innovation, it can also be a disabler, through its interaction with team identification. Recognizing this potential for negative effects, managers might emphasize the benefits that can come from cooperating across teams, thus encouraging team members to identify not only at the team level but at the overall project level as well. Such actions might deflect negative identity threats that can derail positive innovation intentions.     

PERSPECTIVE: Empirical Generalization and the Role of Culture in New Product Development*

Empirical generalization continues to be a challenge in most applied fields that favor publication of original results. The purpose of this study was to report on a new product development exercise in one, controlled cultural setting, which replicates and extends Ettlie (2002) . Results from four recent graduate business classes in Portugal show that the background of students—technical versus other or mixed—is a nearly perfect predictor of the average or central estimates the class makes tendency (median) of new product success in the exercise. Country matters little. These results have now persisted over nearly seven years, and implications are discussed concerning theory, practice, and future research.     

New Product Activities and Performance: The Moderating Role of Environmental Hostility

In the race to bring new products to market, a company may be tempted to cut corners in the new product development (NPD) process. And a hostile environment—that is, one marked by intense competition and rapid technological change—only heightens the pressure to reduce NPD cycle time. However, hasty completion of the NPD process may actually jeopardize a product's chances for success. In a study of Fortune 500 manufacturers of industrial products, Roger J. Calantone, Jeffrey B. Schmidt, and C. Anthony Di Benedetto explore the relationships among new product success rates, proficiency in the execution of NPD activities, and the perceived level of hostility in the competitve environment. Their study examines how proficiency in NPD activities affects the odds of success for industrial new products. Adding environmental hostility to the mix, they also investigate whether the perceived level of hostility in the competitive environment affects the relationship between NPD proficiency and success. In this way, they provide insight into the factors managers must consider when attempting to accelerate cycle time in a hostile competitive environment. The respondents to their survey—142 senior managers involved in NPD or product innovation rated environmental hostility in terms of the extent to which the firm perceives its industry as safe, rich in investment opportunity, and controllable. To assess NPD proficiency, respondents were asked about their firms' performance in predevelopment marketing and technical activities, development marketing and technical activities, and financial analysis. Respondents assessed new product performance in terms of product profitability. As expected, the responses indicate that proficiency in the performance of NPD activities increases the likelihood of new product success. Proficiency in development marketing activities produced the largest increase in likelihood of success—nearly 25 percent over that of projects in which respondents rated performance of these activities at any level below “most proficient.” More importantly, the responses indicate that a hostile competitive environment increases the impact of NPD proficiency. In other words, by improving performance of key NPD activities under hostile environmental conditions, a firm can greatly increase the likelihood of success for a new industrial product. Rather than simply cut corners in the NPD process, a firm faced with a hostile environment must strike a balance between speed and quality of execution.     

Characterizing the Role of Design in New Product Development: An Empirically Derived Taxonomy*

This article empirically explores the nature of the role of design in the new product development process. The investigation adopts a multiple case study methodology. Data were collected through a six‐month interview program carried out with mid‐size to large U.K. manufacturing companies. The researchers articulate the scope and detailed nature of actions undertaken by design across all phases of the new product development process. Design functional, integration, and leadership actions are unraveled from the data. A taxonomy characterizing three roles for design in new product development is developed and explained. In the first role, design is explored as a functional specialism. The second categorization develops the role of design as part of a multifunctional team. The third role depicts the designer as process leader. Detailed actions and skills associated with each role are discussed and illustrated. Contextual factors explaining and influencing each design role are unraveled. These are articulated as speed of development process, innovativeness of the product development effort, and use of external design agencies. The implications of these findings for the development of design skills and capabilities are discussed in terms of recruitment, training, and educational policies.