Measuring new product success: an empirical investigation of Australian SMEs

New product development (NPD) has long been recognised as one of the corporate core functions. However, measuring new product success has remained elusive. This paper attempts to examine several conceptual issues underlining the measurement of new product success and the measurement practice adopted in Australian small and medium enterprises (SMEs). The sample included 276 SMEs from two most innovative industries: chemical and machinery industries. Results have indicated that four factors underline the commonly used success measurement: financial performance, objective market acceptance, subjective market acceptance, and product-level measures. These four factors are related to each other and can be used to well predict the overall measurement. The most frequently used specific measures in Australian SMEs are customer acceptance, customer satisfaction, product performance, and quality.     

Firm resources and entry-related advantages: An empirical study in China

The majority of research on order of market entry has focused on market pioneer advantages or the specialized assets that industry incumbents would need to possess. However, relatively little attention has been paid to whether and how certain firm resources or capabilities may provide latecomers with entry-related advantages. This issue is of particular interest when multinational organizations decide to enter emerging markets, such as China, where the transitional economy provides both opportunities and challenges. This study attempts to bridge this gap by discussing the entry-related advantages in terms of pioneer advantages, early follower advantages, and late entrant advantages, and by investigating how each of the entry-related advantages has unique impacts on market performance. In particular, this study examines the relations between innovation management, firm resources, entry-related advantages, and market performance simultaneously with cross-sectional data from 191 firms in China. Our findings reveal that technical resources and skills (R&S), marketing R&S, and market intelligence are associated with different advantages for market pioneers, early followers, and late entrants. Technical R&S is also found to have significant impacts on order of market entry as pioneers. Furthermore, the findings show that remarkable differences exist among the three entrant types (i.e., market pioneers, early followers, and late entrants) in their strategic approaches to attain market performance. We offer implications to foreign firms operating in China or intending to enter China's markets.     

Customer value anticipation, customer satisfaction and loyalty: An empirical examination

A service-dominant logic by definition is inherently customer oriented and relational, reflecting deeper and more complex connections between suppliers and customers. The service mindset driving increased collaboration enables suppliers to have deeper insights to what customers' value. Customer value perceptions are dynamic, sometimes in constant flux, necessitating anticipatory capabilities on the part of suppliers. Yet, there is a notable lack of discussion about customer value anticipation and related empirical evidence of whether or not customers care if suppliers anticipate what they value. The authors report on two survey studies that test using structural equation modeling the notion that suppliers good at anticipating what customers will value realize higher customer satisfaction and loyalty. Understanding this relationship is critical for marketing managers wrestling with allocation of limited resources. We find that customer value anticipation is a strong driver of satisfaction and loyalty, with satisfaction acting as a mediator for loyalty.     

Firm management of scientific information: an empirical update

The purpose of this paper is to extend and test a model proposed by McMillan and colleagues in 1995. That model posited that research-intensive firms that are more 'cooperative' or open in publishing their scientific findings will have higher research and development (R&D) productivity than more secretive firms. In addition, four possible predictors of this scientific information openness are proposed in lieu of two in the 1995 article. Our current effort includes an empirical examination of twenty pharmaceutical firms over thirteen years, and finds substantial support for many of the proposed relationships. In addition, interviews with field practitioners independently confirmed many of the findings. The managerial implications are also discussed.     

Knowledge sharing and strategic fit in integrated product development proejcts: An empirical study

While product strategy has been approached from a variety of perspectives, the role of strategic fit as a critical linkage of knowledge sharing practices and new product development outcomes have not been adequately explored. This paper discusses how strategic fit is instrumental for cross-functional teams to integrate product development outcomes. This paper identifies critical knowledge sharing components that enhances the extent of strategic fit that in turn improves the success of product development efforts. Strategic fit or alignment requires knowledge sharing practices of the product development team. Teams with a shared knowledge base are more capable of thinking strategically, adapting their actions to their project environment and accordingly engaging in innovative problem-solving while ultimately achieving project goals of time, cost and value. This paper presents and tests a research model using a sample of 285 product development projects of firms from USA, Canada and Spain. The results suggest that strategic fit is associated with greater knowledge sharing and enhance product development outcomes in both small and large firms as well as diverse regions (i.e., USA, Canada and Spain).     

Geographic scope,product diversification,and the corporate performance of Japanese firms

The study extends research on the geographic scope, product diversification, and performance relationship by exploring both the antecedents and consequences of geographic scope. In so doing, it addresses a fundamental criticism of the geographic scope–performance relationship; namely, that the observed positive relationship between geographic scope and performance is spurious because it is the possession of proprietary assets that is the foundation of superior performance, not expansion into international markets per se. We tested the research model with data on the corporate performance of 399 Japanese manufacturing firms. In the partial least squares analyses used to examine the study’s six main hypotheses, we demonstrate that geographic scope was positively associated with firm profitability, even when the competing effect of proprietary assets on firm performance was considered. Further, we find that performance was not related to the extent of product diversification, although investment levels in rent‐generating, proprietary assets were related to the extent of product diversification. Copyright © 1999 John Wiley & Sons, Ltd.     

Linking learning and knowledge creation to project success in Six Sigma projects: An empirical investigation

This study investigates the impact of two organizational antecedents, (1) Six Sigma resources (technical) and (2) team psychological safety (social), on learning behaviour and knowledge creation and, in turn, on the success of Six Sigma process improvement projects. The paper proposes an integrated model to explain process improvement implementation success through two learning activities undertaken by Six Sigma project teams: Knowing-what and Knowing-how. The conceptualization of these knowledge types in this research is different from usual conceptualization as it represents the knowledge brought into projects through various phases of Six Sigma projects. The three hypotheses proposed in the model were tested using the data collected from 52 Six Sigma project teams from a single organization. Regression analysis showed psychological safety affects project performance through knowing-how. Regression and bootstrapping analyses showed resources influence project performance through the combined mediation of knowing-what and knowing-how.The paper provides an interdisciplinary treatment of knowledge management in process improvement teams, and offers a research model demonstrating how Six Sigma project teams promote deliberate organizational learning. By doing so, this study empirically establishes the notion that technical and social supports jointly impact the success of operations management initiatives such as Six Sigma through learning. The limitations of the study along with the future research directions are highlighted.     

The relationship between supply chain factors and adoption of e-Collaboration tools: An empirical examination

We consider minimum-cost scheduling of different vehicle types on a predetermined set of one-way trips. Trips have predetermined ready times, deadlines and associated demands. All trips must be performed. The total time of operations on any vehicle is limited. We develop a mixed integer model to find the optimal number of vehicles at a minimum cost. Based on the hard nature of the problem, we propose six heuristics. Computational results reveal that heuristics return exceptionally good solutions for problem instances with up to 100 jobs in very small computation times, and are likely to perform well for larger instances.     

An assessment of post-M&;A integration influences on new product development performance: An empirical analysis from China,Taiwan, and HK

This study examines the possible benefits and effects of post-M&A integration on new product development (NPD) performance in terms of efficiency and effectiveness. The total sample size was 251 respondents. Confirmatory factor analysis (CFA) and structural equation modeling (SEM) were used for statistical analysis. The results demonstrate that external integration correlates positively with internal integration. Although external integration relates positively to new product competitive advantage (NPCA), internal integration does not have a positive correlation with NPCA. Further, product vision positively correlates with NPCA and NPD performance, and NPCA positively correlates with NPD performance. In addition, an examination of the mediation effect in terms of Sobel t-test reveals that the NPCA is a significant mediator for the influence of interdepartmental integration on NPD performance. Moreover, this study provides a framework for managing post-M&A integration and closes with a discussion of the theoretical and practical implications of the research findings.     

Dynamic competition in technological investments: An empirical examination of the LCD panel industry

When are technological laggards more likely to try to catch up with leaders? We offer empirical evidence on firm-level data of plant investments in the TFT-LCD panel industry, where technological competition has been intense and dynamic. We find that the followers' level of technology has a non-monotonic effect on technology-improving investments, with intermediate followers the most apt to invest in catch-ups. This result is a puzzle given the existing theory on technology race. We also find that followers' catch-up investments increase with the capacity of the leader that employs the state-of-the-art technology. These results are robust to variations in specification and alternative accounts of effects. We discuss our findings and contributions in light of the technology race literature.     

Convergence and diversification in cable industry: An empirical analysis of the deployment pattern of cable telephony in US local telecommunications markets

The primary purpose of this study is to examine the deployment pattern of cable telephony in the US local telecommunications market. A model is established stressing that the size of local markets and the specific cost advantages of local cable systems are associated with the deployment of cable telephony by cable operators.     

Self-appraisal,life goals,and national culture: An asian-western comparison

Positive leniency in self-appraisal was studied for its cross-cultural properties in three Asian and three Western countries. Nine hundred and eighty-three mid-level bank managers were surveyed by indigenous field workers to measure self-appraisal, life goals, and other demographic variables. Positive leniency was found in the three Western countries but not in the three Asian countries while controlling for size and type of organisation, managerial level and several demographics including sex, age, education and religious preference. Our measure of self-appraisal also served as a measure of organisational success. The relationship between success and work motivation was then examined for its cross-cultural properties. Organisational success and work motivation correlated across the six countries although the intensity of work motivation varied. The importance of work and of family were highly valued in all six countries as well.     

The R&D and marketing cooperation across new product development stages: An empirical study of Taiwan's IT industry

This study extends the new product development (NPD) process research to a new environmental context (Taiwan's IT industry) and a new business type (original design manufacturing, ODM). Taiwan's IT industry has achieved a very outstanding performance during the last two decades. The island's experience is quite valuable for those emerging countries that are struggling to transform themselves from producing low-value goods to making high-technology products. After analyzing the data collected from 153 research and development (R&D) and marketing managers in Taiwanese IT firms, this study finds that the higher the perceived importance of R&D-marketing cooperation is, the higher the attained level of R&D-marketing cooperation will be. Consequently, a better NPD performance can be achieved. This study additionally reports that a firm that has adopted a Defender innovation strategy attains a lower level of R&D-marketing cooperation, and has a poorer NPD performance than those firms that adopted either Prospector or Analyzer innovation strategies. Finally, environmental uncertainty has no significant impacts on the perceived importance and the attained level of R&D-marketing cooperation.     

New product success factors: A comparison of 'kills' versus successes and failures

The paper reports an analysis of the characteristics of those new projects that are killed, that is, terminated before commercialisation. Such projects constitute the majority of new product projects. The authors' aim was to learn from the differences between 'kills' and those that are commercialised. The latter may, of course, turn out to be successes or failures.
Their sample consisted of 250 new projects of which 123 were ultimately successful, 80 failed and 47 were kills. Two hypotheses were tested: that kills and failures had similar characteristics and that kills differed from successes in the way that failures differed from successes. Four groups of multidimensional project characteristics were measured: product advantage, market attractiveness, competitive situation, and synergy/familiarity.
The results showed that neither hypothesis was generally supported, The patterns of characteristics observed were complex but were unravelled through a computer model simulating how managers perform the evaluation process. It showed that the results could be explained on the basis that errors could be made in evaluation. For example, it is difficult to evaluate product advantage. Surprisingly, competitive situation is not a discriminator between successes, failures and kills but managers treat it as if it were. Some characteristics are perceived by managers to be negative although they are, in fact, favourable to project success.
The authors claim that these results should lead to better allocation of R&D resources among proposed projects.     

Firm profitability,growth, and innovation

A new data base measuring company-level innovative activity is used to test how firm growth, profitability, size, and R&D intensity influence subsequent innovative activity. While R&D intensity is found to promote subsequent innovations, and smaller firms are identified as being more conducive to innovation activity than are larger firms, we find that the effect of company growth and profitability on subsequent innovation depends on the technological-opportunity environment. Profitability is found to promote subsequent innovative activity for firms in high-technological-opportunity industries but not in low-technological-opportunity industries. By contrast, high growth generates more innovative activity for firms in low-technological-opportunity industries, but not in high-technological-opportunity environments.     

Leveraging internal resources and external business networks for new product success: A dynamic capabilities perspective

Internal resources such as technological and human capital, together with a firm's business network, are vital sources of knowledge for new product development. Previous studies largely assume that a firm's internal resources and its external resources embedded in a business network are complementary in new product development. This study draws on the dynamic capabilities perspective to take the existing literature one step further. Our hypotheses were tested using a sample of 130 Chinese manufacturing firms in high-technology industries. Interestingly, the findings reveal a more complex picture of resource interplay between internal resources and external resources embedded in a firm's business network. More specifically, the findings show that a firm's power in its business network influences the effect of its internal resources on its ability to sense and seize opportunities, a vital dynamic capability. More importantly, the findings suggest that such dynamic capability plays a pivotal role in translating the benefits of resource-interplay into new product success.     

Market share,advertising, R&D,and profitability: An empirical analysis of leading industrial firms in Japan

This paper develops a dynamic model of a leader firm which chooses the time paths of R&D and advertising inputs so as to maximize the present value of expected profits. From this theoretical model simultaneous-equations system for market share, advertising, R&D, and profitability is derived and estimated using the data on the leading industrial firms in Japan. Our results show that, as far as top firms are concerned, market share and demand growth have significant positive effects on profitability, and an increase in the stock of goodwill increases market share as well as profitability.This study was financially supported by the Ministry of Education in Japan. Helpful comments were provided by H. Odagiri. Also I am indebted to an anonymous referee for advice and criticism on various points.     

An empirical examination of transaction‐ and firm‐level influences on the vertical boundaries of the firm

A large literature has successfully employed transaction cost economic theory to describe how exchange conditions affect the optimal form of organization. However, this approach has historically not accounted for the influence of firm‐specific attributes on the governance decision. This paper develops a model based on insights from transaction cost economics, the resource‐based view, and real options theory to examine how transaction‐level characteristics, firm‐specific capabilities, and product‐market scope influence the governance of production. Empirical evidence derived from analysis of 469 make‐or‐buy decisions involving 117 semiconductor firms indicates that decisions regarding the governance of production activities are strongly influenced by both transaction‐ and firm‐level effects. Copyright © 2003 John Wiley & Sons, Ltd.