Insights from senior executives about innovation in international markets

Abstract

Innovation and the internationalization of business are two of the most important factors determining business success today. However, very few empirical studies have examined these factors together. This study uses a discovery-oriented approach to examine innovation in the international marketplace. The study’s findings are based on interviews with 64 senior executives including many current and former CEOs and presidents of multinational companies. The interviews were conducted in five countries over a period of several months. These findings provide insights into the thoughts of senior executives on innovation in international markets. Several novel insights that have implications for management practice and future academic research were discovered. Among these findings, executives stressed the importance of managing and disseminating knowledge throughout their companies during all stages of new product development. They highlighted several limitations in achieving this objective as well. Another finding is that firms adhere to several mechanisms that limit competition. In Japan, a well-recognized business hierarchy helps to form the market share goals of firms introducing new products. Companies in some categories seem to have an understanding that they will not introduce new products unless they are suitably differentiated from existing products. Other companies have bought out competitors to reduce competition. A third finding is that companies make concerted efforts to use standardized brand names and positioning. They find these efforts most suited to image-based products and children’s products. Finally, the country-based management structures of most companies make it very difficult to cross-subsidize new products across countries.