Determinants of new product performance in small firms

Abstract

PurposeThe purpose of this paper is to explore the determinants of new product performance in small firms; specifically, the impact of customer orientation, competitor orientation, interfunctional co‐ordination, product launch proficiency and product advantage.Design/methodology/approachBased on previous studies a model was developed addressing determinants of new product and organisational performance (customer orientation, competitor orientation, interfunctional co‐ordination, product advantage, and product launch proficiency). These relationships were explored using data collected from 26 small firms in Ireland.FindingsThe results indicate that competitor orientation and product launch proficiency are strongly linked to new product performance and organisational performance in small firms. Additionally, they illustrate a lack of significant relationships between performance and customer orientation, interfunctional coordination and product advantage, thus suggesting that the existing large firm models explored may not be fully applicable to small firms.Practical implicationsSmall firms need to ensure that they know their competitors, as competitor orientation is linked with both new product performance and organisational performance.Originality/valueWhile the importance of market orientation and new product development to the survival and success of firms is well supported in the literature, the study demonstrates clearly that the measures used, and relationships found, in large firms do not all apply in small firms.