Competitor Intelligence and Product Innovation: The Role of Open-Mindedness and Interfunctional Coordination

Abstract

Drawing on the central themes of open innovation of the knowledge inflows and outflows for a firm’s innovative achievement, this research investigates the application of external knowledge (i.e. competitor intelligence) for product innovation. We posit that open-mindedness and inter-functional coordination mediate the relationship between competitor intelligence and product innovation. We further explore the joint moderating effect of the dynamic emerging market environment on the effects of open-mindedness and inter-functional coordination on product innovation. Survey data were collected from 284 executives from Chinese IT SMEs. Analysis methods of Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) are applied. Results showed that competitor intelligence has a positive and direct effect on product innovation, and their relationships can be further strengthened by the mediators—open-mindedness and inter-functional coordination. In testing the interaction with the dynamic emerging market, we found that the external environment interacts positively with open-mindedness, but negatively with inter-functional coordination on the effect on product innovation. This research enriches our understanding of external knowledge inflow for open innovation application. It contextualises the positive impact of being an open-minded and inter-functional coordinated on a firm’s product innovation. Managerial implications and future research avenues are discussed