COMPETITIVE ADVANTAGE THROUGH NEW PRODUCT DEVELOPMENT CAPABILITIES
DOI:
https://doi.org/10.14738/abr.83.7933Abstract
Why are some businesses exceptional in development of new products? In this study, we will discuss various factors which contribute the success of new product development. New product development is the backbone of an innovative organization, the process is built on the solid foundations of capabilities such as network, technology, innovation, and strategic orientation and social capability are the success drivers in the development of new product. The main purpose is to understand the customer need and develop the product by using these capabilities to innovate something which can give value to the customers and achieve competitive edge over competitors. This article discusses about how successful firms use these new product development process capabilities to achieve competitive advantage in the conduct of business.
References
References
Achrol, R. S., & Kotler, P. (1999). Marketing in the network economy. Journal of marketing, 63(4_suppl1), 146-163.
Aloulou, W. J. (2019). Impacts of strategic orientations on new product development and firm performances. European Journal of Innovation Management.
Aloulou, W., & Fayolle, A. (2005). A conceptual approach of entrepreneurial orientation within small business context. Journal of Enterprising Culture, 13(01), 21-45.
Arrow, K. J. (1962). Economic welfare and the allocation of resources. The Rate and Direction of Inventive Activity.
Brown, S. L., & Eisenhardt, K. M. (1995). Product development: Past research, present findings, and future directions. Academy of management review, 20(2), 343-378.
Chan, S. L. and Ip, W.H. (2011), “A dynamic decision support system to predict the value of customer for new product development”, Decision Support Systems, Vol. 52, No. 1, pp. 178– 188.
Chesbrough, H. W. (2003). Open innovation: The new imperative for creating and profiting from technology: Harvard Business Press.
Clark, K. B. (1989). Project scope and project performance: the effect of parts strategy and supplier involvement on product development. Management science, 35(10), 1247-1263.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative science quarterly, 128-152.
Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic management journal, 10(1), 75-87.
Dahlman, C. J., & Nelson, R. (1995). Social absorption capability, national innovation systems and economic development. In Social capability and long-term economic growth (pp. 82-122). Palgrave Macmillan, London.
Deng, Z., Hofman, P. S., & Newman, A. (2013). Ownership concentration and product innovation in Chinese private SMEs. Asia Pacific Journal of Management, 30(3), 717-734.
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of management review, 23(4), 660-679.
Eisend, M., Evanschitzky, H., & Calantone, R. J. (2016). The relative advantage of marketing over technological capabilities in influencing new product performance: the moderating role of country institutions. Journal of International Marketing, 24(1), 41-56.
Eisenhardt, K. M., & Tabrizi, B. N. (1995). Accelerating adaptive processes: Product innovation in the global computer industry. Administrative science quarterly, 84-110
Felekoglu, B., Maier, A.M., Moultrie, J. (2013), “Interactions in new product development: how the nature of the NPD process influences interaction between teams and management”. Journal of Engineering and Technology Management. Vol. 30, No. 4, pp. 384–401.
Floyd, S. W., & Wooldridge, B. (1999). Knowledge creation and social networks in corporate entrepreneurship: The renewal of organizational capability. Entrepreneurship theory and practice, 23(3), 123-144..
Fuchs, C., & Schreier, M. (2011). Customer empowerment in new product development. Journal of Product Innovation Management, 28, 17–32.
Gao, G. Y., Zhou, K. Z., & Yim, C. K. B. (2007). On what should firms focus in transitional economies? A study of the contingent value of strategic orientations in China. International Journal of Research in Marketing, 24(1), 3-15.
Gatignon, H., & Xuereb, J.-M. (1997). Strategic orientation of the firm and new product performance. Journal of marketing research, 34(1), 77-90.
Gatignon, H., & Xuereb, J.-M. (1997). Strategic orientation of the firm and new product performance. Journal of marketing research, 34(1), 77-90.
Graner, M. and Mißler-Behr M. (2013), “Key determinants of the successful adoption of new product development methods”, European Journal of Innovation Management, Vol. 16 No. 3, pp. 301-316.
Grassl, W. (2003). A General Theory of Competition: Resources, Competences, Productivity, Economic Growth by Shelby D. Hunt. The Review of Austrian Economics, 16(4), 385-393.
Griffin, A. and Page, A. (1993), “An interim report on measuring product development success and failure”, Journal of Product Innovation Management, Vol. 10, pp. 291-308.
Hakala, H. (2011). Strategic orientations in management literature: Three approaches to understanding the interaction between market, technology, entrepreneurial and learning orientations. International Journal of Management Reviews, 13(2), 199-217.
Han, J. K., Kim, N., & Srivastava, R. K. (1998). Market orientation and organizational performance: is innovation a missing link? Journal of marketing, 62(4), 30-45
Hastings, C. (1995). Building the culture of organizational networking: Managing projects in the new organization. International Journal of Project Management, 13(4), 259-263.
Hertenstein, J. H., Platt, M. B. and Veryzer, R. W. (2005), “The Impact of Industrial Design Effectiveness on Corporate Financial Performance”, Journal of Product Innovation Management, Vol. 22 No.1, pp.3–21
Hitt, M. A., Hoskisson, R. E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management journal, 40(4), 767-798.
Hughes, M., & Morgan, R. E. (2007). Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial Marketing Management, 36(5), 651-661.
Jeong, I., Pae, J. H., & Zhou, D. (2006). Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers. Industrial Marketing Management, 35(3), 348-358.
Kahn, K. B., Barczak, G., Nicholas, J., Ledwith, A. and Perks, H. (2012), “An Examination of New Product Development Best Practice”, Journal of Product Innovation Management, Vol. 29, No. 2, pp. 180–192.
Kandemir, D. and, Acur, N. (2012), “Examining Proactive Strategic Decision-Making Flexibility in New Product Development”, Journal of Product Innovation Management, Vol. 29, No. 4, pp. 608–622.
Kim, N., Im, S., & Slater, S. F. (2013). Impact of knowledge type and strategic orientation on new product creativity and advantage in high‐technology firms. Journal of product innovation management, 30(1), 136-153.
Kirca, A. H., Jayachandran, S., & Bearden, W. O. (2005). Market orientation: A meta-analytic review and assessment of its antecedents and impact on performance. Journal of marketing, 69(2), 24-41.
Kodama, M. (2005). Knowledge creation through networked strategic communities: case studies on new product development in Japanese companies. Long Range Planning, 38(1), 27-49.
Lee, L. T. S. (2008), “The effects of team reflexivity and innovativeness on new product development performance”, Industrial Management and Data Systems, Vol. 108 No.4, pp.548-569.
Li, Y., Liu, Y., & Zhao, Y. (2006). The role of market and entrepreneurship orientation and internal control in the new product development activities of Chinese firms. Industrial Marketing Management, 35(3), 336-347.
Lin, M. and Huang, C. (2013), “The impact of customer participation on NPD performance: the mediating role of inter-organization relationship”, Journal of Business and Industrial Marketing, Vol. 28, No. 1, pp. 3-15.
Lin, M. J. J., Tu, Y. C., Chen, D. C., & Huang, C. H. (2013). Customer participation and new product development outcomes: The moderating role of product innovativeness. Journal of Management & Organization, 19, 314–337
McEleny, Charlotte, 2010. Unilever to use social media to aid product development. New Media Age, pp, 01-02.
McGrath, R. G., Tsai, M. H., Venkataraman, S., & MacMillan, I. C. (1996). Innovation, competitive advantage and rent: a model and test. Management Science, 42(3), 389-403.
Mendes, G. H. S. and Ganga, G.M.D. (2013), “Predicting Success in Product Development: The Application of Principal Component Analysis to Categorical Data and Binomial Logistic Regression”, Journal of Technology Management and Innovation, Vol. 8, No. 3, pp. 83-97.
Miller, D. (1988). Relating Porter's business strategies to environment and structure: Analysis and performance implications. Academy of Management journal, 31(2), 280-308.
Mu, J., & Di Benedetto, C. A. (2011). Strategic orientations and new product commercialization: mediator, moderator, and interplay. R&D Management, 41(4), 337-359.
Mu, J., Thomas, E., Peng, G., & Di Benedetto, A. (2017). Strategic orientation and new product development performance: The role of networking capability and networking ability. Industrial Marketing Management, 64, 187-201.
Nambisan, S., & Sawhney, M. (2011). Orchestration processes in network-centric innovation: Evidence from the field. Academy of management perspectives, 25(3), 40-57.
Porter, M. E. (1985a). Competitive Advantage, New York Free Press. PorterCompetitive Advantage1985.
Ritter, T. (1999). The networking company: antecedents for coping with relationships and networks effectively. Industrial marketing management, 28(5), 467-479.
Rubera, G., Chandrasekaran, D., & Ordanini, A. (2016). Open innovation, product portfolio innovativeness and firm performance: the dual role of new product development capabilities. Journal of the Academy of Marketing Science, 44(2), 166-184.
Rubera, G., Ordanini, A., & Calantone, R. (2012). Whether to integrate R&D and marketing: the effect of firm competence. Journal of Product Innovation Management, 29(5), 766-783.
Soh, P. H. (2003). The role of networking alliances in information acquisition and its implications for new product performance. Journal of business venturing, 18(6), 727-744
Song, X. M., & Parry, M. E. (1999). Challenges of managing the development of breakthrough products in Japan. Journal of Operations Management, 17(6), 665-688.
Sullivan Mort, G., & Weerawardena, J. (2006). Networking capability and international entrepreneurship: How networks function in Australian born global firms. International Marketing Review, 23(5), 549-572.
Theodosiou, M., Kehagias, J., & Katsikea, E. (2012). Strategic orientations, marketing capabilities and firm performance: An empirical investigation in the context of frontline managers in service organizations. Industrial Marketing Management, 41(7), 1058-1070.
Tsai, W. (2002). Social structure of “coopetition” within a multiunit organization: Coordination, competition, and intra organizational knowledge sharing. Organization science, 13(2), 179-190.
Utterback, J. M., & Abernathy, W. J. (1975). A dynamic model of process and product innovation. Omega, 3(6), 639-656.
Venkatraman, N. (1989). (1989b). Strategic orientation of business enterprises: The construct, dimensionality, and measurement. Management Science, 35, 942-962.
Verganti, R., & Buganza, T. (2005). Design inertia: designing for life‐cycle flexibility in internet‐based services. Journal of Product Innovation Management, 22(3), 223-237.
Vesalainen, J., & Hakala, H. (2014). Strategic capability architecture: The role of network capability. Industrial Marketing Management, 43(6), 938-950.
Wittmann, C. M., Hunt, S. D., & Arnett, D. B. (2009). Explaining alliance success: Competences, resources, relational factors, and resource-advantage theory. Industrial Marketing Management, 38(7), 743-756.
Yalcinkaya, G., Calantone, R. J., & Griffith, D. A. (2007). An examination of exploration and exploitation capabilities: Implications for product innovation and market performance. Journal of International Marketing, 15(4), 63-93.
Zhang, J., & Wu, W. P. (2013). Social capital and new product development outcomes: The mediating role of sensing capability in Chinese high-tech firms. Journal of World Business, 48(4), 539-548.
Achrol, R. S., & Kotler, P. (1999). Marketing in the network economy. Journal of marketing, 63(4_suppl1), 146-163.
Aloulou, W. J. (2019). Impacts of strategic orientations on new product development and firm performances. European Journal of Innovation Management.
Aloulou, W., & Fayolle, A. (2005). A conceptual approach of entrepreneurial orientation within small business context. Journal of Enterprising Culture, 13(01), 21-45.
Arrow, K. J. (1962). Economic welfare and the allocation of resources. The Rate and Direction of Inventive Activity.
Brown, S. L., & Eisenhardt, K. M. (1995). Product development: Past research, present findings, and future directions. Academy of management review, 20(2), 343-378.
Chan, S. L. and Ip, W.H. (2011), “A dynamic decision support system to predict the value of customer for new product development”, Decision Support Systems, Vol. 52, No. 1, pp. 178– 188.
Chesbrough, H. W. (2003). Open innovation: The new imperative for creating and profiting from technology: Harvard Business Press.
Clark, K. B. (1989). Project scope and project performance: the effect of parts strategy and supplier involvement on product development. Management science, 35(10), 1247-1263.
Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative science quarterly, 128-152.
Covin, J. G., & Slevin, D. P. (1989). Strategic management of small firms in hostile and benign environments. Strategic management journal, 10(1), 75-87.
Dahlman, C. J., & Nelson, R. (1995). Social absorption capability, national innovation systems and economic development. In Social capability and long-term economic growth (pp. 82-122). Palgrave Macmillan, London.
Deng, Z., Hofman, P. S., & Newman, A. (2013). Ownership concentration and product innovation in Chinese private SMEs. Asia Pacific Journal of Management, 30(3), 717-734.
Dyer, J. H., & Singh, H. (1998). The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Academy of management review, 23(4), 660-679.
Eisend, M., Evanschitzky, H., & Calantone, R. J. (2016). The relative advantage of marketing over technological capabilities in influencing new product performance: the moderating role of country institutions. Journal of International Marketing, 24(1), 41-56.
Eisenhardt, K. M., & Tabrizi, B. N. (1995). Accelerating adaptive processes: Product innovation in the global computer industry. Administrative science quarterly, 84-110
Felekoglu, B., Maier, A.M., Moultrie, J. (2013), “Interactions in new product development: how the nature of the NPD process influences interaction between teams and management”. Journal of Engineering and Technology Management. Vol. 30, No. 4, pp. 384–401.
Floyd, S. W., & Wooldridge, B. (1999). Knowledge creation and social networks in corporate entrepreneurship: The renewal of organizational capability. Entrepreneurship theory and practice, 23(3), 123-144..
Fuchs, C., & Schreier, M. (2011). Customer empowerment in new product development. Journal of Product Innovation Management, 28, 17–32.
Gao, G. Y., Zhou, K. Z., & Yim, C. K. B. (2007). On what should firms focus in transitional economies? A study of the contingent value of strategic orientations in China. International Journal of Research in Marketing, 24(1), 3-15.
Gatignon, H., & Xuereb, J.-M. (1997). Strategic orientation of the firm and new product performance. Journal of marketing research, 34(1), 77-90.
Gatignon, H., & Xuereb, J.-M. (1997). Strategic orientation of the firm and new product performance. Journal of marketing research, 34(1), 77-90.
Graner, M. and Mißler-Behr M. (2013), “Key determinants of the successful adoption of new product development methods”, European Journal of Innovation Management, Vol. 16 No. 3, pp. 301-316.
Grassl, W. (2003). A General Theory of Competition: Resources, Competences, Productivity, Economic Growth by Shelby D. Hunt. The Review of Austrian Economics, 16(4), 385-393.
Griffin, A. and Page, A. (1993), “An interim report on measuring product development success and failure”, Journal of Product Innovation Management, Vol. 10, pp. 291-308.
Hakala, H. (2011). Strategic orientations in management literature: Three approaches to understanding the interaction between market, technology, entrepreneurial and learning orientations. International Journal of Management Reviews, 13(2), 199-217.
Han, J. K., Kim, N., & Srivastava, R. K. (1998). Market orientation and organizational performance: is innovation a missing link? Journal of marketing, 62(4), 30-45
Hastings, C. (1995). Building the culture of organizational networking: Managing projects in the new organization. International Journal of Project Management, 13(4), 259-263.
Hertenstein, J. H., Platt, M. B. and Veryzer, R. W. (2005), “The Impact of Industrial Design Effectiveness on Corporate Financial Performance”, Journal of Product Innovation Management, Vol. 22 No.1, pp.3–21
Hitt, M. A., Hoskisson, R. E., & Kim, H. (1997). International diversification: Effects on innovation and firm performance in product-diversified firms. Academy of Management journal, 40(4), 767-798.
Hughes, M., & Morgan, R. E. (2007). Deconstructing the relationship between entrepreneurial orientation and business performance at the embryonic stage of firm growth. Industrial Marketing Management, 36(5), 651-661.
Jeong, I., Pae, J. H., & Zhou, D. (2006). Antecedents and consequences of the strategic orientations in new product development: The case of Chinese manufacturers. Industrial Marketing Management, 35(3), 348-358.
Kahn, K. B., Barczak, G., Nicholas, J., Ledwith, A. and Perks, H. (2012), “An Examination of New Product Development Best Practice”, Journal of Product Innovation Management, Vol. 29, No. 2, pp. 180–192.
Kandemir, D. and, Acur, N. (2012), “Examining Proactive Strategic Decision-Making Flexibility in New Product Development”, Journal of Product Innovation Management, Vol. 29, No. 4, pp. 608–622.
Kim, N., Im, S., & Slater, S. F. (2013). Impact of knowledge type and strategic orientation on new product creativity and advantage in high‐technology firms. Journal of product innovation management, 30(1), 136-153.
Kirca, A. H., Jayachandran, S., & Bearden, W. O. (2005). Market orientation: A meta-analytic review and assessment of its antecedents and impact on performance. Journal of marketing, 69(2), 24-41.
Kodama, M. (2005). Knowledge creation through networked strategic communities: case studies on new product development in Japanese companies. Long Range Planning, 38(1), 27-49.
Lee, L. T. S. (2008), “The effects of team reflexivity and innovativeness on new product development performance”, Industrial Management and Data Systems, Vol. 108 No.4, pp.548-569.
Li, Y., Liu, Y., & Zhao, Y. (2006). The role of market and entrepreneurship orientation and internal control in the new product development activities of Chinese firms. Industrial Marketing Management, 35(3), 336-347.
Lin, M. and Huang, C. (2013), “The impact of customer participation on NPD performance: the mediating role of inter-organization relationship”, Journal of Business and Industrial Marketing, Vol. 28, No. 1, pp. 3-15.
Lin, M. J. J., Tu, Y. C., Chen, D. C., & Huang, C. H. (2013). Customer participation and new product development outcomes: The moderating role of product innovativeness. Journal of Management & Organization, 19, 314–337
McEleny, Charlotte, 2010. Unilever to use social media to aid product development. New Media Age, pp, 01-02.
McGrath, R. G., Tsai, M. H., Venkataraman, S., & MacMillan, I. C. (1996). Innovation, competitive advantage and rent: a model and test. Management Science, 42(3), 389-403.
Mendes, G. H. S. and Ganga, G.M.D. (2013), “Predicting Success in Product Development: The Application of Principal Component Analysis to Categorical Data and Binomial Logistic Regression”, Journal of Technology Management and Innovation, Vol. 8, No. 3, pp. 83-97.
Miller, D. (1988). Relating Porter's business strategies to environment and structure: Analysis and performance implications. Academy of Management journal, 31(2), 280-308.
Mu, J., & Di Benedetto, C. A. (2011). Strategic orientations and new product commercialization: mediator, moderator, and interplay. R&D Management, 41(4), 337-359.
Mu, J., Thomas, E., Peng, G., & Di Benedetto, A. (2017). Strategic orientation and new product development performance: The role of networking capability and networking ability. Industrial Marketing Management, 64, 187-201.
Nambisan, S., & Sawhney, M. (2011). Orchestration processes in network-centric innovation: Evidence from the field. Academy of management perspectives, 25(3), 40-57.
Porter, M. E. (1985a). Competitive Advantage, New York Free Press. PorterCompetitive Advantage1985.
Ritter, T. (1999). The networking company: antecedents for coping with relationships and networks effectively. Industrial marketing management, 28(5), 467-479.
Rubera, G., Chandrasekaran, D., & Ordanini, A. (2016). Open innovation, product portfolio innovativeness and firm performance: the dual role of new product development capabilities. Journal of the Academy of Marketing Science, 44(2), 166-184.
Rubera, G., Ordanini, A., & Calantone, R. (2012). Whether to integrate R&D and marketing: the effect of firm competence. Journal of Product Innovation Management, 29(5), 766-783.
Soh, P. H. (2003). The role of networking alliances in information acquisition and its implications for new product performance. Journal of business venturing, 18(6), 727-744
Song, X. M., & Parry, M. E. (1999). Challenges of managing the development of breakthrough products in Japan. Journal of Operations Management, 17(6), 665-688.
Sullivan Mort, G., & Weerawardena, J. (2006). Networking capability and international entrepreneurship: How networks function in Australian born global firms. International Marketing Review, 23(5), 549-572.
Theodosiou, M., Kehagias, J., & Katsikea, E. (2012). Strategic orientations, marketing capabilities and firm performance: An empirical investigation in the context of frontline managers in service organizations. Industrial Marketing Management, 41(7), 1058-1070.
Tsai, W. (2002). Social structure of “coopetition” within a multiunit organization: Coordination, competition, and intra organizational knowledge sharing. Organization science, 13(2), 179-190.
Utterback, J. M., & Abernathy, W. J. (1975). A dynamic model of process and product innovation. Omega, 3(6), 639-656.
Venkatraman, N. (1989). (1989b). Strategic orientation of business enterprises: The construct, dimensionality, and measurement. Management Science, 35, 942-962.
Verganti, R., & Buganza, T. (2005). Design inertia: designing for life‐cycle flexibility in internet‐based services. Journal of Product Innovation Management, 22(3), 223-237.
Vesalainen, J., & Hakala, H. (2014). Strategic capability architecture: The role of network capability. Industrial Marketing Management, 43(6), 938-950.
Wittmann, C. M., Hunt, S. D., & Arnett, D. B. (2009). Explaining alliance success: Competences, resources, relational factors, and resource-advantage theory. Industrial Marketing Management, 38(7), 743-756.
Yalcinkaya, G., Calantone, R. J., & Griffith, D. A. (2007). An examination of exploration and exploitation capabilities: Implications for product innovation and market performance. Journal of International Marketing, 15(4), 63-93.
Zhang, J., & Wu, W. P. (2013). Social capital and new product development outcomes: The mediating role of sensing capability in Chinese high-tech firms. Journal of World Business, 48(4), 539-548.
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Published
2020-03-23
How to Cite
Hamid, F., & ABBASI, M. U. . (2020). COMPETITIVE ADVANTAGE THROUGH NEW PRODUCT DEVELOPMENT CAPABILITIES. Archives of Business Research, 8(3), 202–209. https://doi.org/10.14738/abr.83.7933
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