The Role of Future‐Market Focus in the Early Stages of NPD across Varying Levels of Innovativeness

The concept of future‐market focus (FMF) arose out of the debate about firm size and incumbency in the face of radical or disruptive innovations, and has been demonstrated to have a positive correlation with radical innovation (RI) success. This study examines the relationship between FMF and the processes used in the early stages of NPD for four types of innovation projects: incremental innovations, technological breakthroughs, market breakthroughs, and radical innovations. We found that the future‐market focus of a project team can influence the early stage processes used in a new product innovation project, and does so differentially across levels of innovativeness. In particular, the concept generation process, understanding of market needs, and screening decision criteria are different for low‐ versus high‐FMF projects and there are differences based on the level of innovation. In addition, we found that radical innovation projects rated low in FMF are markedly different than the radical innovation projects described in prior studies.     

Planning for dominance: a strategic perspective on the emergence of a dominant design

Researchers in technology and innovation, organization research, and product standardization in economics have noted that innovations may become the dominant designs in their product classes for reasons that may have little to do with design. The emergence process for dominant designs has typically been viewed as a black box process involving a sophisticated interaction of technological and non-technological factors. This paper shifts the discussion to a strategic perspective. It argues that firms can frame the emergence process and can systematically manage elements of it in the pursuit of competitive advantage from innovation. An analytical framework is developed and discussed, with particular emphasis on the roles of certain external conditions, non-technological forces, and complementary assets, as well as the implications for R&D strategists and for future research. Four distinctive examples illustrate different aspects of the framework's utility.     

Development of Novel Products Through Intraorganizational and Interorganizational Networks

The pendulum appears to be swinging away from the merger mania of the 1980s, with many leaner-and meaner organizations refocusing on their core competencies. However, these more focused organizations often lack the breadth of skills and expertise necessary for developing products and services which cut across traditional technological and marketing boundaries. Complex product systems such as those under development in the home automation industry include elements from such disparate sectors as consumer electronics, telecommunications, construction, and energy. A narrow focus may prevent the novel forms of innovation necessary for successful development of such products. Using the home automation industry as an example, Joe Tidd examines the challenges involved in the development of complex product systems. When products and services cut across traditional marketing and technological boundaries, radical innovation is difficult because different firms and industries are typically responsible for developing the various subsystems and components. Successful development efforts may require novel forms of innovation–for example, architectural innovation and technology fusion. Architectural innovation involves changes in the way the components of a product are linked together, but leaves the core design concepts untouched. Technology fusion creates new products and market opportunities through the blending of diverse technologies from various fields. Two organizational factors affect a firm's ability to develop and commercialize new products based on novel forms of innovation: the internal organization of the firm, and the firm's links with other organizations, including suppliers, customers, and networks of collaborating organizations. Within a firm, the development of complex product systems is likely to require managing across traditional product-division boundaries. The breadth of competencies required may necessitate strong interfirm linkages. Comparing organizational approaches and the networks of alliances for home automation in the United States, Europe, and Japan, it appears that European firms tend to be more narrowly focused then American and Japanese firms. A rigid focus on core competencies may cause these European firms to overlook the potential for new products. Because various technologies and industries are involved, open networks are more effective than closed networks or alliances. European and American firms tend to favor closed strategic alliances, while Japanese firms typically participate in open networks and overlapping consortia. This approach gives Japanese firms an edge in the home automation industry.     

Incapability of Technological Capability: A Case Study on Product Innovation in the Japanese Facsimile Machine Industry

Technological leadership in an industry certainly seems like a ticket to ongoing success. However, overemphasis on existing technological capabilities may produce a form of myopia in product development. In other words, by focusing primarily on developing and improving their core technologies, organizations miss opportunities to exploit new technologies and thus create breakthrough products. Ken Kusunoki proposes that problem-solving approaches in a technologically leading firm paradoxically may impede radical product innovation. Suggesting that such firms are inherently oriented toward incremental innovation, he presents a conceptual framework of the dynamic interaction between technological and product development problem-solving in the context of product innovation. He then illustrates this conceptual framework by examining a case of radical innovation in the Japanese facsimile industry. For a technological leader, product innovation typically is driven by technology development. In other words, such a firm quite reasonably relies on the technological advantage it holds over competitors as the basis for its product developments. By refining and enhancing its industry-leading technological capabilities, the firm can successfully introduce incremental innovations in its products. Because of this strong emphasis on exploiting existing technological capabilities, however, the technological leader may fail to capitalize on new technologies that can produce radical innovations. In the race to develop high-speed, digital facsimile equipment during the early 1970s, for example, Matsushita held a decided technological advantage over competitors such as Ricoh. Notwithstanding Matsushita's technological edge, however, Ricoh brought this radical innovation to market two years before Matsushita introduced its first digital machine, causing a serious decline in Matsushita's market share. Ricoh's approach to technological and product problem-solving—an autonomous team structure, with a strong project manager and frequent transfers of engineers among interdependent units—contrasts dramatically with Matsushita's functional structure and strong emphasis on technological problem-solving. Interestingly, Matsushita regained its technological advantage by 1976, thanks to a rapid series of incremental innovations in its product technologies.     

Sources, characteristics and effects of emerging technologies: Research opportunities in innovation

Diverse technological developments across information technology, biotechnology, nanotechnology, and satellite communications technology are dramatically altering industry landscapes, with important economic and policy implications. Not surprisingly, therefore, managers are challenged to develop strategies to cope with the threats posed by emerging technologies and leverage the opportunities posed by them. Indeed, there is growing anecdotal evidence that firms' inabilities to cope with emerging technologies have produced high product and firm failure rates.From an academic perspective, I argue that emerging technologies have important distinctive features that have not been examined in current theory in marketing, and specifically, in organizational innovation. In this article, I identify several research questions that emerge from the sources, characteristics and effects of emergent technologies in the area of organizational innovation. Insights generated from such a line of inquiry have the potential to broaden the canvas of innovation theory and provide valuable insights to managers who confront these onerous challenges on a daily basis.     

Determinants of technological innovation success and failure: Does marketing innovation matter?

Innovation is attracting increasing attention from public authorities, enterprises, and academics. Although emerging evidence has indicated that marketing innovation should be regarded as critical as technological innovations for enhancing companies' competitiveness, few studies have considered this topic.This study aims to address this gap by examining the role of marketing innovation in the relationship between technological innovation and innovation success and failure. This study analyses the 2010–2012 Community Innovation Survey sample of German enterprises by using a double hurdle model and a probit model with sample selection. The results show that when enterprises undertake a technological innovation, introducing a marketing innovation is observed not to play a significant role regarding innovation success and failure. Notably, when the four types of marketing innovations are disentangled in the analysis, new findings emerge. Innovation in product packaging and design is positively related to innovation success. Innovation in product promotion is negatively related to innovation success and positively related to probability of innovation failure. Academics are called to study the role of marketing innovation, regarding innovation success and failure, by devoting their attention to the level of each marketing innovation. Enterprises should then carefully consider which marketing innovation should be introduced.     

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

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

Learning by supplying

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

Technological and Design Innovation Effects in Regional New Product Rollouts: A European Illustration

Firms are increasingly recognizing the importance of understanding regional dynamics and their effects on competitiveness. One such area that is gaining increased importance due to intra‐regional trade is the factors contributing to the successful rollouts of new products within a region. New product rollouts are complicated by nature but are further compounded by intricacies in the type of innovation (i.e., technological or design) being introduced into a region. Unfortunately, limited research has investigated this area. This study works to address this limitation by examining the per country performance effects of regional new product rollouts of technological and design innovations. The study examines the introduction of 14 technological innovations and 12 design innovations across 17 unique firms operating in eight European countries from 2000 to 2007. Specifically, this study attempts to show (1) an important role of the type of innovation on a firm's regional new product rollout strategy; (2) a relationship between national culture and the effectiveness of regional rollout strategies; and (3) an influence of economic openness on the type of innovation for regional new product rollout strategies. The results indicate that a longer regional new product rollout strategy is a more effective strategy for technological innovations, while a shorter regional new product rollout strategy is a more effective strategy for design innovations. The study also presents significant interaction effects in relation to the cultural dimensions of uncertainty avoidance and power distance as well as a significant effect of economic openness. Implications for practitioners and academics are presented.     

Firm Patenting,Innovations, and Government Institutional Support as a Double‐Edged Sword

In 2012, China was ranked fourth in patent filing by region of origin. However, firm innovation quality is not comparable to such quantity. Evidence of this is that no Chinese organization was named as a Thomson Reuters 2011 or 2012 Top 100 Global Innovators. This paradox of firm patenting and innovations in China challenges the traditional understanding of the role of government in industrial innovation. This paper provides a theoretical lens through which to examine traditional protective and strategic patenting motives. Based on institutional theory and the ultimate goals of patenting motives, the paper posits that protective patenting motives are directly law‐based while strategic patenting motives are largely law‐derived. The paper also aims to empirically examine three questions: (1) What is the relative importance of various patenting motives to firm patenting behaviors? (2) What effects do patenting behaviors have on firm product and process innovations? (3) How, if at all, does governmental institutional support affect firm patenting and innovations? This paper uses dominant analysis, structural equation modeling, and regression analysis to analyze the survey data collected from a sample of 270 firms in China. The empirical results provide new evidence about firm patenting, innovations, and government institutional support. First, the order of relative importance of patenting motives to patenting behaviors was found to be (in the descending order of importance) reputation, exchange, blocking, and protection. Second, patenting behaviors were more relevant to product innovations than to process innovations. Third, more importantly, while government institutional support can enhance the effects of protective patenting motives on patenting behaviors, it can mitigate the effects of strategic patenting motives on patenting behaviors. Moreover, government institutional support reduces the positive effect of patenting behaviors on product innovations. These findings suggest that firm patenting and innovations are distinct activities, and that government institutional support acts as a double‐edged sword in firm patenting and innovations: On the one hand government institutional support—an extralegal formal institution—may work alongside the patent system—a law‐based formal institution—to advance science and technology, but on the other hand government institutional support may distract firms from commercializing patented knowledge into new products. This paper primarily contributes to institutional theory, new product development literature, and innovation management practice by revealing the dynamics between two different types of formal institutions—patent system and government institutional support—by establishing an institution‐based view of patenting motives, by empirically distinguishing firm patenting and innovations, and more interestingly by uncovering a double‐edged role of government institutional support in firm patenting and innovations.     

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

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

Effects of innovation types on firm performance

Innovation is broadly seen as an essential component of competitiveness, embedded in the organizational structures, processes, products and services within a firm. The objective of this paper is to explore the effects of the organizational, process, product and marketing innovations on the different aspects of firm performance, including innovative, production, market and financial performances, based on an empirical study covering 184 manufacturing firms in Turkey. A theoretical framework is empirically tested identifying the relationships amid innovations and firm performance through an integrated innovation-performance analysis. The results reveal the positive effects of innovations on firm performance in manufacturing industries.     

The effects of knowledge interaction for business innovation

The objective of this paper is to examine the effects of knowledge interaction on different types of business innovation. We first identified three indicators that reflect on the quality of the interaction between customers and technological knowledge, and then classified business innovations as product innovation, problem-solving innovation, or general innovation capability. Hypotheses about the impact of different qualities of knowledge interaction on business innovations were tested by collecting data from 178 high-technology firms in Taiwan. The results revealed that product innovation requires both wide-ranging and deep interaction between customers and technological knowledge, that problem-solving innovation requires either wide-ranging or deeper interaction between customers and technological knowledge, and that wide-ranging knowledge interaction is the most important driver for building general innovation capability. The research results enhance our understanding of knowledge interaction, with a special focus on the content and quality of the knowledge interactions within an enterprise. It also helps business managers in allocating resources and facilitating interorganizational communications for different situations related to innovation.     

Relational ties,innovation, and performance: A tale of two pathways

Relational ties are valuable resources that can generate substantial advantages for firms. Multiple studies show that relational ties enhance firm performance, but whether and how innovation intervenes in this process is largely unknown. This study examines how relational ties affect firm performance via two types of innovation. Drawing on the relational ties literature and exploration/exploitation literature, we differentiate between two types of ties (business ties versus political ties) and investigate how innovation (exploration versus exploitation) mediates relational ties and firm performance in two distinct ways. Survey data from China's semiconductor and pharmaceutical industries, both innovation-oriented industries, suggests that firms' business ties with buyers, suppliers, and competitors are more related to exploratory innovation, while their political ties with government officials are more related to exploitative innovation. Interestingly, competitive intensity demonstrates distinct moderating effects on both of these pathways.     

Does importer involvement contribute to product innovation? The role of export market factors and intra-firm coordination

Relying on insights from resource dependence and information processing theory, this study analyzes the extent to which an importer's involvement influences product innovation at the industrial exporter firm. We consider two modes of involvement, collecting importer's feedback and importer integration in the product development effort. We propose that the relationship between importer involvement and product innovation is contingent upon the level of inter-functional coordination within the development firm, and contextual factors related to the export market. Data were collected from export companies participating in different international business-to-business markets. Results show that firms with high inter-functional coordination achieved higher leverage from importer feedback, but obtain no impact from importer integration in product development (PD). Contextual factors affect the relationship between importer involvement and product innovation: importer feedback affects product innovation in environments with intense competition and low technological turbulence. Importer integration in PD has a significant effect on product innovation in environments with low competitive intensity and high technological turbulence. This study contributes to a better understanding of the conditions that allow an exporter firm to create value through external relationships. Theoretical and managerial implications of these findings are discussed.     

A critical look at technological innovation typology and innovativeness terminology: a literature review

A plethora of definitions for innovation types has resulted in an ambiguity in the way the terms ‘innovation’ and ‘innovativeness’ are operationalized and utilized in the new product development literature. The terms radical, really‐new, incremental and discontinuous are used ubiquitously to identify innovations. One must question, what is the difference between these different classifications? To date consistent definitions for these innovation types have not emerged from the new product research community. A review of the literature from the marketing, engineering, and new product development disciplines attempts to put some clarity and continuity to the use of these terms. This review shows that it is important to consider both a marketing and technological perspective as well as a macrolevel and microlevel perspective when identifying innovations. Additionally, it is shown when strict classifications from the extant literature are applied, a significant shortfall appears in empirical work directed toward radical and really new innovations. A method for classifying innovations is suggested so that practitioners and academics can talk with a common understanding of how a specific innovation type is identified and how the innovation process may be unique for that particular innovation type. A recommended list of measures based on extant literature is provided for future empirical research concerning technological innovations and innovativeness.

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When to Use Loose or Tight Alliance Networks for Innovation? Empirical Evidence

This study examines the impact of different degrees of organizational coupling among the members of innovation alliance project networks on the commercial performance of collaborative innovations. Specifically, we study how type of innovation (modular vs. architectural innovation) moderates this relationship. Using data from 664 product innovation networks from five different industries in the United States, we find that the degree of organizational coupling among innovation network members significantly affects the commercial performance of collaborative innovations and that the type of innovation has a significant moderating effect. More specifically, the impact on commercial innovation performance of organizational coupling is positive for modular innovations and negative for architectural innovations.     

Determinants of technological innovation in the small firms of Korea

This study identifies the factors determining technological innovations in the small firms in Korea. Two groups of 24 innovative and 25 noninnovative small firms are compared on four categories of variables: environmental, strategic, structural, and top management characteristics, which were found to be important determinants of technological innovation in prior research in developed countries. A multiple discriminant analysis reveals that two top managerial characteristics (risk-taking propensity and tolerance for ambiguity), environmental heterogeneity, environmental scanning strategy, and professionalization of organizational structure are the most significant factors discriminating innovative from noninnovative small firms in Korea. The findings suggest that predominant determinants of technological innovation vary according to the types of organization and, in the case of small firms, managerial attitudes toward innovation is the most critical factor. Other strategic and policy implications for the management of innovation in the small firm context are discussed.     

A Longitudinal Study of the Impact of R&D,Patents, and Product Innovation on Firm Performance

Because of increasing levels of competition and decreasing product life cycles, a firm's ability to generate a continuous stream of innovations may be more important than ever in allowing a firm to improve profitability and maintain competitive advantage This paper investigates several issues that are central to an examination of the innovation productivity in a firm. First, the relationship between a firm's commitment to research and development and its innovative outcomes is examined. Two innovative outcomes are analyzed: (1) invention, which focuses on the development of new ideas; and (2) innovation, the development of commercially viable products or services from creative ideas. Invention is measured by the number of patents granted, and innovation is assessed by the number of new product announcements. Second, because many inventions ultimately result in marketable innovations and because patents may provide protection for new products, the relationship between patents and product announcements is also investigated. Finally, the ability of a firm to benefit from its inventions and innovations is studied by examining their separate effects on firm performance, measured as return on assets (ROA) and sales growth. Drawing from a sample of 272 firms in 35 industries over 19 years, the results from a model of simultaneous equations provided support for some of the hypotheses, but several other surprising findings were found. As expected, R&D spending was positively related to patents. This finding is consistent with others who argue that internal research capabilities, particularly those with a strong basic research component, is key to enabling a firm to generate creative outputs. More surprising was the finding of increasing returns to scale to R&D spending. While this contradicts much of the existing research, it is consistent with economic arguments for the advantages of scale in innovation. Also interesting is the finding that, while a significant curvilinear relationship exists between R&D spending and product announcements, it is not the predicted inverse‐U but instead a U‐shaped relationship. Consistent with previous work, product announcements were found to be positively related to both performance measures. A negative relationship was found between patents and both ROA and sales growth. While these findings were unexpected, they are intriguing and call into question the value of patents as protection mechanisms. In addition, these results may be resulting from the rise of strategic patenting, where an increasing number of firms are using patents as strategic weapons. As expected, a positive relationship was found between patents and new product announcements.     

Trends in innovation and productivity: The case of chemical and textile industries in the U.S.

This paper attempts to investigate an empirical linkage between technological innovation and productivity in two industries in the United States. During the period 1967—82, the chemical and textile industries experienced different rates of productivity growth. In spite of stiff competition from foreign manufacturers, American textile firms maintained a steady growth in productivity. This industry benefitted from major technological innovations occurring in industries supplying to it. The chemical industry faced crisis due to sudden changes in petroleum prices. Changes in regulatory requirements also imposed a different set of constraints on the chemical industry. Rate of innovation decreased quite severely in this industry during this time period.
Innovation indicators were developed by obtaining data on new product/process announcements in the technical literature. Panels of technical experts from the industries and academia evaluated the data for their technical novelty. The data indicate a relationship between innovation and productivity growth.