Strategic Alignment and New Product Development: Drivers and Performance Effects

Strategic alignment is widely accepted as a prerequisite for a firm's success, but insight into the role of alignment in, and its impact on, the new product development (NPD) process and its performance is less well developed. Most publications on this topic either focus on one form of alignment or on one or a limited set of NPD performance indicators. Furthermore, different and occasionally contradictory findings have been reported. NPD scholars have long argued for the importance of fit between context and NPD activities. However, this body of literature suffers from the same weakness: most publications have a limited scope and the findings are not always consistent with results reported previously. This study addresses these deficiencies by examining (1) the effects of various internal and external factors on different forms of alignment, and (2) the effects of these forms of alignment on a set of NPD performance indicators. Strategic planning and innovativeness appear to affect technological, market, and NPD‐marketing alignment positively. Environmental munificence is negatively associated with NPD‐marketing alignment, but has no effect on the two other forms of alignment. Technological change has a positive effect on technological alignment, a negative effect on NPD‐marketing alignment, but no effect on market alignment. These findings suggest that internal capabilities are more likely to be associated with the development of strategic alignment than environmental factors are. Furthermore, technological and NPD‐marketing alignment affect NPD performance positively, while market alignment does not have any significant performance effects.     

Launch Strategy and New Product Performance: An Empirical Examination in The Netherlands

Although previous research has investigated the concept and contents of new product performance, there is still no consensus about the managerial decisions that constitute a launch strategy and how such decisions impact new product performance. The research objective for the present investigation is to assess the impact of launch strategy and market characteristics on new product performance and to test the stability of this impact across consumer and industrial products. Data were collected on 272 consumer and industrial new products in The Netherlands through a mail questionnaire approach. We based our definition of a launch strategy on an extensive literature review and interviews with managers. Our conceptualization of new product performance represented two dimensions, namely, market acceptance and product performance. The market acceptance dimension reflects the new product's market position and sales levels. The product performance dimension refers to the quality and technical performance level of the new product. This richer specification of the dependent variable provides a better view on which launch decisions impact which dimensions of new product performance. The impact of launch strategy was higher for market acceptance than for product performance, overall and for both consumer and industrial subsamples separately. In line with results from recent studies, overall, market acceptance is influenced by the product's innovativeness, timing of market entry, breadth of assortment, branding, pricing, the objective of increasing market penetration, and competitor reactions. Product performance is influenced by the product's innovativeness, breadth of assortment, and by the objective of using an existing market. Analyzing the consumer and industrial products separately showed that the general picture of launch decisions and their impact on the dependent variables was comparable across the total sample and both subsamples, indicating that heterogeneous samples in new product launch research may not cause major interpretation problems. Second, the analyses revealed that some launch decisions are more important in attaining new product success for consumer products than for industrial products, and vice versa. While these decisions do not lead to contradicting results in the samples, they show that some decisions may be especially relevant for only consumer or industrial products. We discuss research and managerial implications of the results.     

Enhancing New Product Development Performance: An Organizational Learning Perspective

Several years ago, an editorial in a software industry journal asked readers, “Why aren’t they using all those marvelous methods?” The focus of the editorial was on software engineering methods, but the question also applies to the broader realm of new product development (NPD). Proven tools exist for gathering, disseminating, and using market information. But despite widespread recognition of the important role that market knowledge plays in NPD, most firms fail to employ these tools in a consistent manner.Marjorie E. Adams, George S. Day, and Deborah Dougherty contend that the tools for successful NPD cannot be implemented successfully until we understand the barriers that hinder an organization’s capabilities for learning about markets. To foster that understanding, they describe the results of a study that explores the organizational barriers to learning about markets for new products. The study examines 40 NPD efforts in 15 large firms, and it has the following goals: identifying the processes through which organizational barriers impede market learning, developing specific ideas for how NPD professionals can cope more effectively with these barriers, and offering suggestions for improving market tools and techniques to help overcome these barriers.The study identifies three organizational learning barriers: avoiding ambiguity, compartmentalized thinking, and inertia. For the participants in this study, these barriers persistently act in specific ways to inhibit market learning. In acquiring market information, people typically focus on less ambiguous, more easily understood technologies and business truisms. Dissemination of market information is hindered because people focus on their own goals, which are often defined within their department’s role instead of the overall goals of the project. Inertia acts as a barrier to the effective use of market information. That is, people tend to proceed as they always have, maintaining the status quo rather than adjusting actions to capitalize on market learning.By encouraging broad functional participation in the acquisition and interpretation of data, NPD organizations can reduce the perceived ambiguity of market information. However, cross-functional approaches are only one step in overcoming organizational barriers. Managers must enable teams to develop rich, vivid market data, help people extend established routines into new practices, and promote trust. Specific market research tools and methods that promote market learning are also suggested.     

Product Change Intensity, Product Advantage, and Market Performance: An Empirical Investigation of the PC Industry

Product change decisions, such as the frequency of new product introductions, can impact product performance characteristics, sales, and market share of several generations of products and, therefore, a firm's long‐term survival and growth. The purpose of this study was to explore the impact of a firm's product change frequency, also referred to as product change intensity. A conceptual model linking a firm's product change intensity to its product advantage—and, in turn, to its market performance—with strategic product change orientation and technology competence as moderating effects, was used as a foundation for the study's hypotheses. These were tested using hierarchical and linear regressions, based on survey data collected from 55 U.S. companies in the personal computer (PC) industry. The analysis confirmed that a PC firm's product rate of change is positively associated with its product advantage and that its product advantage, in turn, is positively associated with its market share and growth performance. However, the hypothesized moderating effects were not confirmed. Rather, a firm's product change orientation and its level of technology competence are more likely to have a direct impact on product advantage. The implications of these findings are that, in general, firms that release new products frequently will have them viewed more favorably by the market than products with lower change intensities. Also, firms with higher levels of competence in the product technology domain tend to create products with greater market attraction. Finally, more radical changes to PC product architectures may pay off better than relatively minor changes. These results may not apply to other industries due to the specific design of personal computers and the nature of this fast‐paced market. Neither do the findings necessarily apply to all firms regardless of those firms' specific product and market strategies. More research is necessary to understand how a firm's adopted strategy, and the industry in which it operates, affect the relationships demonstrated in this study.     

Information Use in New Product Development: An Initial Exploratory Empirical Investigation in the Chemical Industry*

In‐depth interviews with product developers and product development software providers in a previous qualitative phase of research uncovered eight general types of information that are used across the new product development process (strategic, project management, financial, market and customer, wants and needs, technical, competitor, and regulatory information) and three general approaches to managing information in the process (project‐centric, functionally oriented, and fully distributed). This paper presents a second phase of research trying to understand the role that managing knowledge and information plays in developing new products and achieving NPD success. This research phase empirically investigates use of the eight types of information across three general phases of the NPD process in the chemical industry using 81 mail survey responses from marketing and new product development professionals. Respondents were asked to indicate the degree to which each of the eight information types was used in each of the following general phases of new product development: the fuzzy front end, development, and testing and launch. The respondents also provided information on new product development success, information management system sophistication, and innovation strategy. This research makes several contributions to new knowledge. First, this research suggests that information management in product development is even more complex than initially posited in Zahay et al. (2004) , with each of the eight types of information identified being used in each of the three phases of development. Unexpectedly, for all but one type of information use is higher in later stages of the NPD process, even though use of several kinds of information early in the project is associated with increased success. Thus, managers may need to encourage teams to start gathering information from outside the firm earlier than is currently the norm. Second, the results suggest that more sophisticated information management systems are indeed associated with increased use of various different types of information, as expected. Third, more sophisticated information management systems are more highly associated with success than less sophisticated information management systems. These results are important, as most new product development information management systems are limited in their ability to handle complex and non‐quantitative information such as customer wants and needs, as well as strategic, competitor, and regulatory information. However, being able to transmit information on these issues is associated with increased firm performance and project success from these data. Thus, firms need to figure out how to improve their ability to manage and use non‐quantitative information more effectively.     

An Empirical Investigation into the Antecedents of Knowledge Dissemination at the Strategic Business Unit Level

Knowledge dissemination is of crucial importance for the strategic planning in new product development. Many new ideas stem from recombination of previously successful, disseminated actions, and knowledge dissemination offers a clear overview of market needs, technology developments, and competitors' actions. Moreover, in dynamic environments, where strategic planning has to be added by some kind of improvisation, knowledge dissemination leads to a high quality of improvisation. It leads to a quick awareness of external or internal surprises, gives an opportunity to learn quickly from the past, and compensates for a coordination mechanism instead of planning. The dissemination of knowledge does not always happen spontaneously. Especially, people with a technical background often are highly individualistic and do not disseminate knowledge naturally. So, this must be fostered by the organization. In management research, particularly on technology and innovation management, many facilitating factors have been identified that enhance communication. Intuitively, they also would seem useful in enhancing knowledge dissemination; however, these factors have not been tested empirically for this specific use. Research on knowledge and its management has not given much attention to the way knowledge in an organization is disseminated and the factors that can facilitate it. If such factors are mentioned, they are not tested empirically and their relative impact is not addressed. In this study we identified 17 important factors in enhancing knowledge dissemination and validated 10 of these factors empirically and determined their relative impact. We focused on technological knowledge in new product development—not on the project level but on the level of the strategic business unit. The field research comprised three parts. In the first step, we conducted in‐depth interviews with research and development (R&D) managers and their supervisors to select the most important potential facilitating factors. In the second step, in‐depth interviews with senior executives, information technology (IT) officers, and R&D experts were conducted to determine whether the constructs regarding knowledge dissemination and the potential facilitating factors had face validity. Finally, the potential factors were tested empirically in 277 U.S. high‐technology firms at the strategic business unit (SBU) level. It was our intention to examine potential factors beyond the level of the particular project, so we looked for antecedents in an SBU environment with a longer‐term impact. Our results indicate that individual commitment to the firm is very important to facilitate knowledge dissemination as well as organizational crises and risk‐taking behavior. Individual commitment was found to have the greatest impact on the level of knowledge dissemination, followed by organizational crisis and risk‐taking behavior. It is thus up to management to find new ways to control individual commitment. More research, however, is required to better understand the ways by which managerial interventions stimulates knowledge dissemination.     

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.     

Industrial New Product Launch Strategies and Product Development Performance

Just as reporters must answer a few fundamental questions in every story they write, decision-makers in the new product development (NPD) process must address five key issues: what to launch, where to launch, when to launch, why to launch, and how to launch. These decisions involve significant commitments of time, money, and resources. They also go a long way toward determining the success or failure of any new product. Deeper insight into the tradeoffs these decisions involve may help to increase the likelihood of success for product launch efforts. Erik Jan Hultink, Abbie Griffin, Susan Hart, and Henry Robben present the results of a study that examines the interplay between these product launch decisions and NPD performance. Noting that previous launch studies focus primarily on the tactical decisions (that is, how to launch) rather than on the strategic decisions (what, where, when, and why to launch), they explore not only which decisions are important to success, but also the associations between the two sets of decisions. Because the strategic launch decisions made early in the NPD process affect the tactical decisions made later in the process, their study emphasizes the importance of launch consistency—that is, the alignment of the strategic and tactical decisions made throughout the process. The survey respondents—managers from marketing, product development, or general management in U.K. firms—provided information about 221 industrial new products launched during the previous five years. The responses identify associations between various sets of strategic and tactical decisions. That is, the responses suggest that the strategic decisions managers make regarding product innovativeness, market targeting, the number of competitors, and whether the product is marketing- or technology-driven are associated with subsequent tactical decisions regarding branding, distribution expenditure and intensity, and pricing. The study also suggests that different sets of launch decisions have differing effects on performance of industrial new products. In this study, the greatest success was enjoyed by a small group of respondents categorized as Niche Innovators. Their launch strategy involves a niche focus, targeting innovative products into markets with few competitors. Tactical decisions made by this group include exclusive distribution, a skimming pricing strategy, and a broad product assortment.     

Department Status: An Exploratory Investigation of Direct and Indirect Effects on Product Development Performance

To date only a limited number of product development studies have examined the construct of department status. These studies mostly report that departments can reflect different levels of status among themselves during product development activities and that often the marketing department reflects greater status. These studies do not clarify the role that department status may pose for product development performance and product management performance. Some research would suggest that department status has a direct effect on performance, while other research would suggest that department status has an indirect effect on performance. The present study investigates whether the bestowing of department status is important to product development performance and product management performance, and, if so, how? Based on empirical results from a cross‐industry study involving 668 marketing, manufacturing, and R&D managers, department status is found to have a significant indirect effect on product development and product management performance. Results further show that equal status among the three departments of marketing, manufacturing, and R&D correlates with higher levels of interdepartmental collaboration, which in turn manifests the benefits of higher levels of performance. Interdepartmental collaboration is therefore shown to be a mediating variable between department status and performance. The empirical results of this study suggest that no one department should dominate the product development effort and/or product management effort. While study data tend to correspond with prior studies in that the marketing department tends to reflect higher status compared to R&D and manufacturing, simply bestowing more status to marketing (or to another department for that matter) does not appear to be a proper course for facilitating interdepartmental collaboration nor for manifesting higher product development performance. Rather, equal status across marketing, manufacturing, and R&D departments appears to represent the proper course of action to establish collaboration between these three departments and subsequently to reap the benefits of higher performance. Given the exploratory nature of this study, subsequent study is warranted. Avenues for future research along with tentative managerial implications are discussed.     

Strategic Partnerships in New Product Development: an Italian Case Study

This article provides some revealing insights into what a leading Italian firm operating in markets where innovation is a focal point of competition has learned about partnering with suppliers in the new products development process. To succeed in a rapidly changing environment, the firm promoted and sustained tightly linked, integrated supplier relationships. This provided one key element of a shorter product cycle, led to better products, and increased the firm's ability to compete. Andrea Bonaccorsi and Andrea Lipparini explore why partnering is critical for new product success. Finally, they highlight the steps that should be taken to make this relationship a productive one.     

Breakeven Time on New Product Launches: An Investigation of the Drivers and Impact on Firm Performance

The ability to break even faster on new product projects is becoming increasingly critical for firms in fast‐moving industries where continually reinvesting in research and development efforts matters greatly for survival. However, most research to date has focused on studying the impact of two primary innovation outcomes: sales and profits. The exclusive emphasis on sales and profit may be warranted for certain types of goods such as durable goods, but when examining the effects of new products in fast‐moving consumer goods or in the entrepreneurial sphere, where cash to cash matters greatly for survival, it is critical for both researchers and practitioners to not only consider the profits and sales generated by the new product but also the time to breakeven. This paper develops a theoretical framework using the competency‐based literature to examine the effects of innovation drivers (customer idea source, speed to market, product quality, and product newness) on breakeven time (BET) and project profits, and their subsequent impact on firm performance. A three‐stage least square estimation method was employed using longitudinal data on 945 new product development projects and launches in the morning (breakfast) foods category. The results clearly pinpoint that for successful product innovation, managers need to consider the time taken to breakeven on new product development. Specifically, the results demonstrate that speed to market and product quality shorten BET, but customer idea source extends BET. Second, the analysis also empirically demonstrates that BET is an equally effective predictor of firm performance as project profits in the short run, but significantly a stronger predictor of firm performance in the long run (t + four years), suggesting that BET should be regarded as a superior leading indicator of firm performance versus product profitability for fast‐moving consumer goods segment. This is an important finding that suggests firms that recoup their cash investments more quickly experience greater short‐term and significantly more long‐term success.     

Internationalization and the Dynamics of Product Adaptation—An Empirical Investigation

Firms competing in foreign markets can choose to make no changes to the physical product and packaging, called a product standardization policy, which keeps costs low. The main drawback of such a policy is that the product might not satisfy customers. Conversely, firms may choose to modify, or to adapt, the physical characteristics or attributes of a product and its packaging to fit the needs and desires of consumers in different countries better, but this increases development, manufacturing, marketing, packaging, and distribution costs. Though product adaptation is a core aspect of customizing an export market offering, little research has investigated modifying the physical product and packaging. To be successful, an adapted product must add sufficient incremental revenue (through increased sales due to better satisfying customer needs and wants relative to competitive product offerings) such that the additional manufacturing and marketing costs that result from adapting the product are recovered. In this article, a model of the product adaptation process is developed. Using mail surveys, information is gathered from managers in 239 U.S. organizations and 302 South Korean organizations, all of which export products. The goal was to understand better the motivation of firms to adapt their products for export markets as well as the performance implications of adapting products. Furthermore, the model was tested in these two countries to determine if the model is robust and to uncover differences between the United States and South Korea. Using structural equation modeling to analyze the data, a positive association was found between the level of product adaptation and profitability at the project level. Second, U.S. firms appear to be more reactive when adapting products for export markets, doing so when laws and regulations in the export market mandate changes relative to the U.S. market. Conversely, South Korean firms appear to be more proactive and to adapt products even when not required by the governments of export markets. Third, greater international product adaptation is linked to a more responsive marketing organization with customer‐focused practices. Fourth, while a positive link was expected between business unit experience and the extent of international product adaptation, inconsistent results were found between the two country samples. For U.S. firms, it was found that greater experience in international business and product design capability is linked to a higher level of international product adaptation. For South Korean firms, however, a negative relationship was found. Greater international product adaptation occurred with less international business and product design experience. These findings are discussed, and areas for future research are noted.     

Experiential Education In New Product Design And Business Development

We describe an experiential approach to teaching new product design and business development in a year‐long course that combines intensive project work with classroom education. Our course puts together up to six teams of graduate students from management and engineering who work on projects sponsored by individual companies. Student teams work with faculty from multiple disciplines and personnel from the sponsoring companies. The year‐long format and involvement with company personnel provide opportunities for students to gain hands‐on experience in a real product development project. Time constraints, coupled with students' determination to demonstrate what they can accomplish, stimulate teams to learn how to compress the design and development cycle. To help students generalize from their own projects to a wider universe of product design and business development phenomena, students participate continuously in constructive critiques of others' projects; and in presentations, case discussions and workshops that help them learn about the product and business development process itself. This article describes course objectives, syllabus, projects, sponsors, faculty, students and our course administration. In an effort to move towards a “paperless” course, we have put as much of the course material as possible on the World Wide Web; relevant websites are referred to in the article. At the end of the course each team presents a prototype and a protoplan to the sponsoring company in a final report, which in many cases includes suggestions for the sponsor on how to improve its design and development process. Students' positive evaluations, along with their comments, indicate that they are attaining their educational goals. Course projects have resulted in commercialized products, patents, continuing development projects in sponsoring companies, and placements for students. The course has generated public relations value for the units involved and for the university as a whole. © 2002 Elsevier Science Inc. All rights reserved.     

Sourcing,Filtering, and Evaluating New Product Ideas: An Empirical Exploration of the Performance of Idea Markets

The proliferation of interconnectivity and interactivity through Internet‐based technologies enables new forms of support for new product development. This paper analyzes idea markets, which use widely distributed knowledge, the power of markets, and the Internet to support the crucial initial tasks of the new product development process, including the sourcing, filtering, and evaluation of new product ideas. Idea markets employ virtual stocks to represent new product ideas and allow participants to suggest and trade new product ideas in a virtual marketplace. This paper empirically explores the performance of idea markets in a real‐world field study at a large, high‐tech business‐to‐business company that includes more than 500 participants from 17 countries and features various idea sourcing tasks. The results indicate that idea markets are a feasible and promising method to support the fuzzy front end of the new product development process. Idea markets offer a platform and formal process to capture, select, and distribute ideas in an organization, which motivates employees to communicate their ideas to management. By effectively sourcing and contemporaneously filtering, idea markets help reduce the number of ideas brought to management's attention to those that seem worthy of further consideration. Because idea markets also have the ability to source many ideas, they can increase efficiency at the fuzzy front end of the new product development process.     

Assessing New Product Development Practices and Performance: Establishing Crucial Norms

In 1968 and 1982 cross-sectional studies of the conduct and performance of new product development were reported, the wide-ranging results of which have been widely reproduced and cited as norms for product development. Since the more recent study, many changes in the practice and environment of product development have occurred. Albert Page describes the findings of a new cross-sectional study, sponsored by PDMA, which reports on the current status of new product development and updates those commonly referred to norms. On the one hand, this article reports that the state of practice, covering both structure and process, has improved, although there is still substantial room for further improvement. On the other hand, the results for five different measures of firm and program performance indicate these practice improvements have not resulted in notable improvements in the overall performance of the new product development activity within the responding companies.     

Is Integration Enough for Fast Product Development? An Empirical Investigation of the Contextual Effects of Product Vision*

Research into development time performance has suggested that integration—both internal, adopting cross‐functional organizational structures for development, and external, involving customers and suppliers in the process—can be a powerful driver when it comes to compressing cycle times and enhancing development punctuality. Some recent studies have also highlighted the compelling role of product vision to obtain high performances with product development. What these studies seem to suggest is that product vision guarantees the right goals and clarity of direction that integration mechanisms need to quickly develop new products and to stay on the development schedule. However, past studies have rarely considered or measured product vision as a construct and explicitly tested whether or not product vision acts as a contingent factor in determining the relationships between the aforementioned organizational drivers and development time. This research study maintains that product vision is crucial to pushing organizational drivers toward increased development efficiency. To find theoretical support for this position and to define a reference framework for the study, previous literature was analyzed. In the framework, both internal and external development integration are assumed to be positively related to time performance; however, these relationships are moderated by product vision. The model was then tested empirically on an international sample of 157 firms to verify and to obtain empirical support for the hypothesized relationships. The results confirm the importance of external integration in achieving better time performance. However, the influence of this driver on cycle time can also be increased by the presence of a very well‐defined product vision. The relationship between internal integration and time performance is more complex. Though it seems to slow down the process as a single factor, its interaction effect with product vision is in fact positive. These results have several managerial implications. First, externally integrated development can greatly improve time performance; however, the best results in terms of acceleration can be obtained when there is a well‐defined product vision. Furthermore, product vision is essential in the case of internal integration: A cross‐functional process alone would not be enough for development acceleration in the absence of product vision. Hence, managers interested in obtaining high time performances should accompany the adoption of integration mechanisms with increased attention to sharing clear objectives and directions with all those—both inside the firm (i.e., team members and functional representatives) and outside the firm (i.e., customers and suppliers)—involved in development and as well as throughout the firm.     

New Product Development: Impact of Project Characteristics and Development Practices on Performance

Concurrent product development process and integrated product development teams have emerged as the two dominant new product development (NPD) “best practices” in the literature. Yet empirical evidence of their impact on product development success remains inconclusive. This paper draws upon organizational information processing theory (OIPT) to explore how these two dominant NPD best practices and two key aspects of NPD project characteristics (i.e., project uncertainty and project complexity) directly and jointly affect the NPD performance. Contrary to the “best practice” literature, the analysis, based on 266 NPD projects from three industries (i.e., automotive, electronics, and machinery) across nine countries (i.e., Austria, Finland, Germany, Italy, Japan, Korea, Spain, Sweden, and the United States), found no evidence of any direct impact of process concurrency or team integration on overall NPD performance. Instead, there is evidence of negative impact of the interaction between project uncertainty and concurrent NPD process and positive impact of the interaction between project complexity and team integration on overall NPD performance. Moreover, the study found no evidence of any direct negative impact of project uncertainty or complexity on overall NPD performance as suggested in the literature, but found evidence of a direct positive relationship between project complexity and overall NPD performance. The practical implications of these results are significant. First, neither process concurrency nor team integration should be embraced universally as best practice. Second, process concurrency should be avoided in projects with high uncertainty (i.e., when working with unfamiliar product, market, or technology). Finally, team integration should be encouraged for complex product development projects. For a simple product a loosely integrated team or a more centralized decision process may work well. However, as project complexity increases, team integration becomes essential for improved product development. There is no one‐size‐fits‐all solution for managing NPD projects. The choice of a product development practice should be determined by the project characteristics.     

Organizational Learning Ambidexterity,Strategic Flexibility,and New Product Development

Although organizational ambidexterity has gained momentum in recent innovation research, previous literature still offers a confusing and partial picture about how to leverage ambidexterity for new product development because of two limitations. First, previous research mainly focuses on static resource endowment and thus offers little insight about how firms should dynamically reconfigure resource portfolios to leverage organizational ambidexterity. Second, conceptual confusion on the notion of the balance dimension of organization ambidexterity still exists. This study seeks to explore how firms should dynamically reconfigure resource portfolios to leverage organizational ambidexterity for new product development and to bring greater conceptual clarity to the notion of balance. By extending the static resource assumption, which is central to the extant debate in organizational ambidexterity literature, this research unpacks ambidexterity into a relative exploratory dimension and an interactive dimension. We further investigated the moderating effect of resource flexibility and coordination flexibility on the impacts of the two dimensions on new product development performance. Based on the dynamic resource management view and organizational learning theory, we proposed six hypotheses and collected data from 213 firms through a survey to examine the hypotheses. Our results indicate that relative exploratory dimension and interactive dimension have different effects on new product development. Specifically, the relative exploratory dimension has an inverse U‐shaped effect on new product development while the interactive dimension has a positive effect. Furthermore, we find that resource flexibility and coordination flexibility have positive moderating effects on the relationships between the two dimensions of ambidexterity and new product development performance. Our study contributes to the ambidexterity research in three ways. First, from a dynamic resource management view, this study extends previous ambidexterity research from a static view to a dynamic view by exploring the moderating effects of resource flexibility and coordination flexibility. Second, we extend the understanding on ambidexterity by bringing greater conceptual clarity to the notion of balance. Third, this research provides new evidence on the effects of ambidextrous learning on new product development performance in transition economy such as China, where ambidextrous learning is crucial for firms to adapt to a dynamic environment.     

An Empirical Study of Platform and Derivative Product Development Projects

Many firms now realize the importance of planning product families and product platforms. However, little research addresses planning and execution of different types of projects within a product family platform series. This study investigates project characteristics, development challenges, typical outcomes, and success factors for product development projects at different locations in the product family spectrum. “Platform” projects result in products that initiate a new product family platform for a company. “Derivative” projects result in products consisting of extensions to an existing product family platform. Data on 108 new product development projects from a variety of assembled products industries were collected via a detailed survey and analyzed. Findings indicate that: (1) platform and derivative projects differ in project task characteristics (including the amount of new technology development undertaken and project complexity) and market newness; (2) platform and derivative projects generally do not differ in terms of project success (achievement of project objectives, level of company satisfaction, and perceived customer satisfaction) or smoothness of project execution; (3) both platform and derivative projects generally are executed in similar ways; (4) certain managerial approaches (including contingency planning, project-based evaluation of personnel, and overlap of design and manufacturing engineering) are associated with higher project execution success for both platform and derivative projects; and (5) use of interdependent technologies and novel project objectives are associated with project execution failure for platform projects. The results suggest that firms can continue to employ a single product development management process for both platform and derivative projects, as long as modest customization of the process is made for the given project type. Completely different management processes are not required. In all, the results presented in this article suggest specific managerial actions companies can take to significantly improve product development success. © 1999 Elsevier Science Inc.     

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.