Organizational capabilities and new product performance

Abstract

PurposeThe purpose of this paper is to develop a model examining the effect of organizational capabilities over new product (NP) performance. Building on a literature review, the model proposes that organizational capabilities (i.e. technological, marketing mix, and customer‐relational capabilities) exert a direct effect over two dimensions of new product competitive advantage (i.e. new product quality and speed), which in turn exert a direct effect over new product customers and financial performance.Design/methodology/approachBased on a literature review, a structured questionnaire was developed as a primary data collection method. Questionnaires were distributed to a sample of 473 manufacturing organizations in Jordan, out of which 355 were returned and deemed valid for the analysis. Structural equation modeling was applied to examine the model and its related hypotheses.FindingsOut of the three organizational capabilities, only marketing mix capabilities had a direct positive effect over both new product quality and speed to the market, while technological capabilities had no significant direct effect over both dimensions of new product competitive advantage. Customer‐relational capabilities had a direct effect over new product quality only. On the other hand, while new product quality exerted a positive direct effect over both NP financial and customer performance, new product speed to the market had a direct positive effect over NP customer performance only. Finally, NP customer performance exerted a positive direct effect over NP financial performance.Research limitations/implicationsThe fact that the paper is a single country study focusing on the manufacturing industry limits its generalization to other industries/contexts. Furthermore, the paper focuses on two dimensions of new product performance, i.e. customer performance and financial performance. Other dimensions of new product performance might add more insights to the effects new product competitive advantage exerts.Practical implicationsManagers must focus their efforts on developing marketing activities in a competitive manner so that they can introduce both quick and satisfactory new products. Hence, a special focus on marketing function is required. Not only traditional activities of marketing, but also generation, utilization, and management of customer information and knowledge are necessary to introduce competitive new products. Marketing function should be given the lead in the new product development (NPD) process. However, to avoid any rivalry between marketing, production, and R&D, top management needs to foster the marketing concept as a philosophy and to spread it across the organization.Originality/valueThe paper adds to the research on sources of new product competitive advantage in developing countries. It also underlines the need to focus on different dimensions of NP competitive advantage, rather than approaching it from a holistic perspective. The paper further underlines that organizations should focus on long‐term results of NPD, such as NP customer performance, rather than solely focusing on short‐term financial results.