NPD speed vs. innovativeness: The contingent impact of institutional and market environments

Whereas new product development (NPD) speed and product innovativeness are two critical strategic determinants of firm performance, previous studies show inconclusive findings about their effects. Drawing on institutional and contingency perspectives, this study elucidates value appropriation issues in NPD and examines how the effects of NPD speed and technological radicalness are contingent on institutional frameworks and market conditions. Results from 244 high-tech companies in China show that dysfunctional competition enhances the effect of NPD speed, but legal inadequacy hinders the impact of technological radicalness on firm performance. Market growth strengthens the performance effect of NPD speed but restrains the effect of technological radicalness. In addition, technological radicalness demonstrates stronger effects on firm performance when demand uncertainty is high.     

The Impact of Environmental Uncertainty and Asset Specificity on the Degree of Buyer-Supplier Commitment

When manufacturers purchase products from suppliers, the types of relationships they establish may depend on many factors. These relationships can range from formalized, extensive contractual obligations to discrete individual purchases. This study investigates the potential determinants of where on this continuum of commitment the relationship lies. These determinants include uncertainty in both the supplier market and the buyer's customer market, the investment in transaction specific assets by both buyer and supplier, and the investment in product specific assets. Results indicate that market diversity, supplier concentration, investment in product specific assets, and the supplier's investment in transaction specific assets are potential reasons for higher levels of buyer-supplier commitment.     

Justice in triad: Revisiting supplier involvement in new product development

Recognizing the importance of involving suppliers in the new product development (NPD) process, extensive studies have examined this issue at a buyer–supplier dyadic level. However, how supplier involvement leads to better NPD performance is not clearly explained. Additionally, extending the dyadic relationships to triadic relationships and addressing how to manage the two competing suppliers with fair conduct remains unexplored. To answer these questions, this study developed a conceptual model theorizing the role of supplier involvement, information sharing, and justice in the NPD process within a buyer–supplier–supplier triadic relationship. Based on survey data collected from 200 U.S. firms, Structural Equation Modeling is used to test the hypothesis. The results first confirmed the criticality of involving both primary and secondary suppliers during NPD. Second, the positive effect of triadic supplier involvement on innovation performance is fully mediated by information sharing. Finally, this study explored the different roles of procedural justice and distributive justice; the results confirmed that procedural justice acts as a moderator for the relationship between triadic supplier involvement and information sharing, whereas distributive justice moderates the effect between information sharing and innovation performance. Our findings contribute to the literature of triadic supplier involvement-new product development and relationship management. Accordingly, these findings highlight key implications for managers and policymakers.     

Does organizational creativity always drive market performance?

This study develops and tests arguments that the relationship between organizational creativity and market performance is channeled through new product development (NPD) capability, and that the indirect effect of creativity on performance, via NPD capability, is conditional upon levels of environment dynamism and market responsiveness. The proposed relationships are tested on a sample of 221 small‐ and medium‐sized enterprises (SMEs) in a major sub‐Saharan African market. Findings from the study indicate that process and product NPD capabilities partially mediate the effect of novelty and usefulness elements of organizational creativity on market performance. The study further finds that while environment dynamism weakens the indirect effects of novelty and usefulness of organizational creativity, via process and product NPD capabilities, on market performance, the effects are strengthened under conditions of greater responsiveness to target market needs. A theoretical contribution from this study is the finding that how organizational creativity dimensions drive market performance is more complex than previously thought: it depends on whether or not organizational creativity components are first used to develop an organization's process and product innovation capabilities, and whether target market environment conditions are dynamic and an organization has ability to respond to target market demands.     

How Knowledge Management Capabilities Help Leverage Knowledge Resources and Strategic Orientation for New Product Advantages in B-to-B High-Technology Firms

ABSTRACT

Purpose: Current understanding of how new product development (NPD) teams use knowledge management capabilities to acquire, disseminate, and apply knowledge resources to achieve competitive advantages is limited by a lack of compelling theory supported by empirical evidence. This study provides a theoretical framework and empirical validation for how an NPD team manages knowledge resources and strategic orientation to enhance its knowledge management capabilities, which, in turn, lead to business-to-busienss (B-to-B) new product advantages.

Methodology/approach: A total of 100 sets of data was collected from B-to-B firms in U.S. high-tech industries. In order to validate the proposed hypotheses, we estimated the main effects using path analysis in AMOS, and tested for interaction effects using interaction term regressions.

Findings: Our findings show that the two dimensions of NPD knowledge management capabilities—acquisition and application—are important but differential drivers of product quality superiority and product differentiation. In testing whether NPD management capabilities matter for two product advantage constructs, we confirmed that product quality superiority can be enhanced by both NPD knowledge acquisition and application capabilities, whereas product differentiation can be increased strongly by NPD knowledge acquisition capabilities.

Research implications: Our research confirms the importance of strategic orientation as a driver of NPD knowledge management capabilities, which enhances understanding of how strategic factors operate under a resource-based view. Our results further provide direct empirical support for the knowledge-based view of firms, in that an NPD team’s abilities to manage and deploy knowledge-based resources by acquiring and applying NPD knowledge lead to competitive advantages, for outcomes of quality superiority and differentiation.

Practical implications: Our findings have relevance for managers in three ways. First, NPD knowledge acquisition and application capabilities have differential impacts on product quality superiority and differentiation. Second, in exploring NPD resource factors as antecedents, managers should manage levels of NPD market intelligence, resource tacitness, and NPD resource deployment differentially to directly improve NPD teams’ acquisition and application capabilities. Third, managers should not underestimate the importance of market and technological orientations in enhancing NPD knowledge management capabilities. Market orientation drives both NPD knowledge acquisition and application capabilities; technological orientation drives NPD knowledge application capabilities. Originality/value/contribution of the paper: An NPD team’s knowledge management capabilities generally, but differentially, mediate the relationships of knowledge resources and strategic orientation factors with new product competitive advantage. However, simply enhancing NPD knowledge management capabilities is not a panacea for developing product competitive advantage in B-to-B settings, because of their differential effects.     

Market-Oriented New Product Design of Functional Orange Juice Beverages: A Qualitative Approach

Abstract

The functional beverages category is considered one of the most significant drivers of new product development (NPD) in recent years. Fifteen in-depth interviews and three focus groups were held between February and March 2003 to identify the most important attributes influencing consumers' purchase decisions for orange juice, and to explore consumers' attitudes towards existing and new functional orange juice beverages. The results suggested that functional food and beverage manufacturers should place a greater emphasis on the base product when evaluating new product concepts. This study highlighted the key role of qualitative research in facilitating the integration of consumers with the concept stage of the NPD process.     

制造型供应商不同产品特征与品牌导向的关系机理--基于我国产业市场的实证研究

本文以信息整合理论为依据,将供应商产品特征视为其实施品牌导向的前置变量,并把供应商产品特征划分为产品重要性与产品复杂性两类,探讨不同产品特征与品牌导向的关系。对184家制造型供应商数据进行实证分析,结果发现,供应商产品重要性与品牌导向具有倒U型关系,产品复杂性与品牌导向具有U型关系,同时市场竞争强度会增强上述两组变量间的非线性关系。     

Host country institutional pressures and cross-border relationship governance

This study examines the effects of transaction cost, strategic positioning and institutional factors on the governance of international relationships. A firm's product differentiation strategy and export market ethnocentricity are identified as antecedents to specific investments, whereas state influences in the export market are identified as an antecedent to relationship governance. The hypotheses are empirically tested on a sample of 160 international business-to-business relationships. The results show that both product differentiation and export market ethnocentricity impact the level of specific investments, and state influences make it difficult to use both formal contracting and relational norms as governance mechanisms. Furthermore, specific investments made by the supplier are positively related to formal contracting, and product differentiation is positively related to relational norms.     

More effective assessment of market performance in later stages of the product development process: The case of the motion picture industry

A key challenge for companies engaging in new product development (NPD) is to reduce uncertainty by accurately forecasting demand. In this study, we focus on whether later-stage NPD market performance assessments are more accurate than early-stage assessments. Although the literature supports this, we suggest four factors (escalating commitment, information-processing limitations, emergence of new uncertainties, and interdependencies) why this may not be so. Using data from the movie industry, we find that the price film distributors pay to producers for a nearly or fully completed but not yet launched film (the so-called minimum guarantee) mediates the effect of production budget, the main predictor of revenues at the early stage of NPD, consistent with the hypothesis that later-stage assessments are more accurate than earlier ones. However, despite the external validity of this market-based measure, the amount of uncertainty reduction is limited. The implications for NPD uncertainty management are discussed.     

Exploring the need for (extreme) speed: motivations for and outcomes of discontinuous NPD acceleration

ABSTRACT

New product development (NPD) speed is an important concern for firms in today’s fast-paced economy. While existing literature has focused on continuous NPD speed improvements, this paper explores discontinuous NPD acceleration, or dramatic reductions in development time relative to firms’ normal NPD cycles. Across two studies, the authors interview managers to develop a typology of strategic motivations for discontinuous NPD acceleration, followed by a survey of 218 NPD managers to validate the typology and identify important differences across firm types, including those in new product performance, innovation levels, and configurations of organisational characteristics. The results suggest that discontinuous NPD acceleration is most profitable when firms are proactive and have specific configurations of culture, capabilities, and structure. The authors also discuss implications for theory, practice, and future research.     

Contingent effects of managerial guanxi on new product development success

A survey of new product development (NPD) managers finds both a linear, positive relationship between managerial guanxi and new product speed to market and an inverted U-shaped relationship between managerial guanxi and new product innovativeness. In addition, both transaction-specific investments (TSIs) and relationship commitment have a positive moderating impact on the relationship between managerial guanxi and new product speed to market. However, TSIs increase the damaging effect of managerial guanxi on new product innovativeness, whereas relationship commitment reduces such an effect. The results from this study can help business practitioners use guanxi to improve NPD performance under different contexts of inter-firm relationships.     

The retailer's brand promotion strategy under competition: The impact of supply uncertainty

While retailers are committed to promoting product brands to increase sales quantity and brand visibility, retailers are exposed to supply uncertainty. Therefore, we explore the brand promotion strategies of retailers in a competitive model. We then investigate the decision model under three different brand strategies and explore the equilibrium outcomes of stakeholders under supply uncertainty. In addition, we analyze and discuss social welfare under different scenarios. The results show that when the promotion cost is high (i.e., the cost effect dominates the market expansion effect), neither retailer promotes the product brand. When the promotion cost is low (i.e., the market expansion effect dominates the cost effect), both retailers tend to promote the product brands. When the promotion cost and market expansion match each other, only one retailer promotes the product brand becomes the equilibrium strategy. It is worth noting that when both retailers promote the product brand, the retailer falls into a prisoner's dilemma. In addition, we find that the supply uncertainty level diminishes the cost affordability and the motivation of retailers to promote the product brands. Interestingly, the supply uncertainty level reduces the possibility of retailers being in a prisoner's dilemma. Besides, market expansion (supply uncertainty) contributes to improving (diminishing) social welfare.     

The market research contribution to new product failure and success

This paper examines the use made by management of market research data in the evaluation of new product development (NPD) projects. Stressing the need for a systematic approach to NPD the paper sets out four brief case histories, the products being Crocodillo, Paul Masson wine, the Prudential's Holburn UK Unit Trusts, and Golden Wonder's Preludes. These case histories illustrate both the value of a systematic approach to NPD by building up a market research programme and also the limitations of market research data which cannot alone be any guarantee of success.     

Organizational coordination, development proficiency, and on-time completion of development and international rollout: A contingency analysis of external environments

This study examines the moderating effects of external environmental variables on the relationships between organizational coordination, quality of implementation of new product development (NPD) activities, and on-time completion of (or timeliness in) product development and international new product rollout (INPR) among manufacturing firms in Korea. The results indicate that quality of marketing execution is of greater importance for achieving on-time NPD and multi-country rollout in markets where competitive intensity is high than when it is low. The positive effect of HQ-subsidiary relationships on INPR timeliness is strengthened in rapid rather than slower technology-change environments. By contrast, the positive effect of HQ-subsidiary relationships on INPR timeliness is weakened in high rather than lower competitive-intensity environments. In addition, the beneficial effect of cross-functional integration on NPD timeliness is weakened in markets characterized by a high rate of technological change. The article also discusses the theoretical and managerial implications of the findings.     

Channel Selection,Control and Satisfaction of Manufacturers in the Korean Pharmaceutical Market

We hypothesize that percent of foreign capital, firm size, product substitutability, product life cycles, competition, and technological uncertainty affect the reliance of integrated channels. Also, we predict that when the reliance on integrated channels is low, the effects of the power sources for firms on channel control will be more evident. In addition, using more integrated channels and having more control over other channel members are hypothesized to affect the manufacturer's channel satisfaction. Using data collected from 62 manufacturers in the Korean pharmaceutical market, we report empirical findings generally supporting the research hypotheses. The results and implications are also discussed.     

Perceived Environmental Uncertainty and Innovation in Small Firms

Employing data, from a recent survey of Scottish and Northern English Small- and Medium-sized Enterprises (SMEs), the current paper provides new evidence of the extent to which perceptions of environmental uncertainty (dynamism, complexity and hostility), along a number of dimensions, discriminate between small firms engaged in various levels of product innovation. Drawing, broadly, upon an extended version of the classic Miles and Snow schema, novel innovators appear to be marked by perceptions of uncertainty in market and technological environments, but by perceptions of a relatively certain or benign competitive environment. Moreover, the paper observes some dissimilarities between manufacturing and service firms. For instance, higher levels of innovation in manufacturing firms are associated with higher perceptions of supplier uncertainty, whilst, higher levels of innovation in service firms are associated with higher perceptions of human resource uncertainty.     

The causes of product deletion in British manufacturing companies∗

Increasing technological and market changes present companies with business opportunities which demand that firms match their capabilities to these changes. In short, the greater the change in the firm's environment, the greater the need to develop the product mix in consonance with the environment. This need for the development and redevelopment of the product mix—which is the essence of product policy—has resulted in a continual interest on the part of both academics and practitioners in innovation and new product development (NPD) (Rothwell et al. 1974, Gardiner and Rothwell 1985, Cooper 1979, 1984, Johne and Snelson 1987, Parkinson 1980). Yet to equate product mix change with product proliferation leads to an incomplete understanding of product policy which eclipses the crucial tasks of identifying and withdrawing products which no longer contribute to the company's goals. This article addresses the latter issue by discussing the way in which products like these come under the scrutiny of management and it explores the various triggers of product deletion.     

A Contingency Model of Supplier-Reseller Satisfaction Perceptions in Distribution Channels

Abstract

It is important for a supplier to be clear as to which customer service attributes are important to the reseller, as well as the supplier performance level as expected and perceived by the reseller. This paper investigates the difference between reseller satisfaction as expressed by the reseller and presumed reseller satisfaction as interpreted by the supplier. The authors formulate and empirically test six hypotheses to determine the influence of certain environmental variables on the difference in perceived satisfaction in a channel context. They find differences in perceived satisfaction levels across matched dyads composed of one reseller and the supplier's representative responsible for that account. All of the environmental conditions tested were significant drivers of a difference in satisfaction. Specifically, sales representatives tend to underestimate reseller satisfaction when product line growth is increasing, when pricing policy is excellent, and when the channel configuration is indirect. Sales representatives overestimate reseller satisfaction when the reseller is larger, when there is more rivalry, and when the reseller perceives itself as more powerful.     

Product resource–capability complementarity,integration mechanisms,and first product advantage

The current study extends work on resource-based theory (RBT) by exploring resource—capability complementarity in a new context—that of new technology ventures' (NTVs) first product (FP) commercialization in India. This study examines the influence of marketing and technology resource–capability complementarity on FP positional advantages (differentiation and cost-efficiency) and their influence on first product performance (FPP). Furthermore, this study incorporates the influence of supplier integration (SI) mechanisms (in terms of knowledge sharing and co-commercialization) in the process of FP commercialization. The findings suggest that asset complementarities have a positive relation with FP positional advantages, in that both differentiation and cost-efficiency enhance an NTV's FPP, and that SI moderates the relationships between both marketing and technology R–C complementarity and FP positional advantages.     

The impact of supply disruption risk on a retailer’s pricing and procurement strategies in the presence of a substitute product

Retailers often experience stockouts when a supplier fails to deliver an order. In this paper, we identify the optimal procurement policy of a multi-product retailer in the presence of possible supply disruptions. Our analysis reveals that, in anticipation of potential supply disruptions, a retailer would typically benefit from ordering more units from a reliable supplier and fewer units from an unreliable one. Furthermore, the total number of units ordered may increase when there is supply disruption risk. As a result, the retailer may overstock some items. However, there are situations in which a retailer would optimally respond to supply uncertainty by consolidating its selling strategy around the unreliable supplier’s product. Under such a strategy, we find the surprising result that the retailer reduces the amount it orders from a reliable supplier as an unreliable seller becomes even less reliable. We also explore how supply disruptions can affect a retailer’s optimal pricing strategy. We find that under certain conditions, it is beneficial for a retailer to lower its price of a substitute product when one supplier fails to deliver its product. Finally, we find that, on net, consumers may benefit from supply uncertainty even though supply disruptions eliminate access to a desirable product.