Evolution of Global Product Development Networks: An Exploratory Study

Abstract

Global Product Development (GPD) networks have evolved to satisfy the unique requirements essential to the successful adoption of corporate outsourcing and offshoring during development processes. Having reviewed the relevant literature associated with GPD, this paper seeks to contribute to the understanding of organizational considerations taken by GPD networks during their transitional processes. A retrospective case study analysis was conducted with 17 Italian companies classified into six GPD configurations (named the “Chess matrix”). Each classification was based on both developmental localization (local versus global) and product development process fragmentation; development activities are either entirely performed within the same development lab, eventually with the contribution of support/adaptive units, or they are split among development units. Using this classification system, an evolutionary model was adopted to illustrate the dynamic paths companies follow when transitioning toward new GPD configurations. With this framework and categorization process, it was deduced that three main variables drove each of the 17 companies: 1) market needs; 2) market extension; and 3) internal needs. These variables were determined based on the GPD approach each company adopted in pursuit of a stable profitable configuration that was achieved by either deliberately remaining in a certain configuration or by employing an evolutionary GPD development configuration. In recognizing that there is not a singularly optimal stable configuration, it is essential to recognize and identify the individual drivers being pursued by each enterprise when implementing specific configurations. Further research will be devoted to more extensively elaborate the paths within a larger sample of companies to identify unrevealed paths and drivers that move companies in their product development globalization efforts.