INNOVATION IN HEAVY CONSTRUCTION EQUIPMENT MANUFACTURING: AN EXPLORATORY STUDY

Abstract

This research investigates three major hypotheses important to new product market success in the heavy construction equipment industry which are as follows: the greater the degree of organisational integration during the development of new products, the greater will be the market success of new products; the greater the degree of organisational integration during the development of new products, the greater will be the proficiency with which new product development activities are performed; and the greater the proficiency with which new product development activities are performed, the greater will be the new product's success in the marketplace. Information was obtained concerning the most and least successful new products of U.S. firms in the heavy construction equipment industry. "Organisational integration" is defined as the degree of cooperation and communication between internal and external new product development (NPD) "support" groups and NPD teams. "NPD process proficiency" is defined as how well new product development stages and the NPD process as a whole are performed. "New product market success" is represented by four measures that encompass profit expectations, sales expectations, success entering new markets and entering existing markets with new products successfully. The survey approach was utilised to obtain data. Questionnaires were mailed to recipients such as New Product Development Managers who had already been designated by executives of the sample firms. A number of important findings were uncovered during this research. The integration between an organisation's customers and an NPD team is important to the success of newly developed heavy construction equipment products. However, the integration between organisations that supply material, components, assemblies and fabrications to new heavy construction equipment developers was found to hinder the market success of newly developed heavy construction equipment. These and other findings suggest several important implications for product development managers and scholars.