How Competitive Intensity Affects the New Product Development Outcomes

Abstract

New product development (NPD) is essential for securing firms’ growth and success when faced with intense competition. However, the issues of the pathways through which competitive intensity affects NPD, and how firm size can play a moderating role in achieving specific NPD outcomes in competitive markets have not been adequately examined. To fill these gaps, the study proposes a research model based on the environment–behavior–performance theoretical framework, and empirically tests relationships among competitive intensity, knowledge integration, organizational unlearning, and NPD outcomes (i.e. NPD innovativeness, NPD speed), as well as the moderating role of firm size. Survey data from 242 Chinese manufacturing firms reveal that competitive intensity is positively associated with both knowledge integration and organizational unlearning. These relationships are moderated by firm size. Specifically, firm size strengthens the relationship between competitive intensity and knowledge integration, and weakens the relationship between competitive intensity and organizational unlearning. Further, by comparing the relative effects of knowledge integration and organizational unlearning on NPD outcomes, knowledge integration is found to have a stronger relationship with NPD speed than with NPD innovativeness. In contrast, organizational unlearning has a stronger relationship with NPD innovativeness than with NPD speed. This study provides a better understanding of how firms can choose appropriate strategic behaviors to achieve the expected NPD outcomes under intense competition.