Abstract
Innovation and differentiation are key success factors that allow companies to target themost profitable niches of their market. The purpose of this research is to present a detailedempirical study of Small and Medium Enterprises (SMEs) and Multinational Enterprises(MNEs) as they actively pursue new product development in order to acquire a competitiveadvantage based on differentiation. The research provides an in-depth analysis of theemerging products in the dairy industry, using well-established managerial theories and referringto a national contest (Italy) where the dynamicity of the SMEs is well known worldwideand the investments in R&D are chronically below the European average. This studyinvestigates a highly advanced segment of the yogurt market that has registered the largestgrowth in recent years. Furthermore, a significant presence of new products proposed bylocal SMEs and large MNEs provides a unique environment for a comparative analysis ofcompetition and innovation
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