The value of strategy and flexibility in new product development

Abstract

Purpose – The purpose of this paper is to examine the relationship between strategy and flexibility in new product development, and the operational and financial performance in the supply chain context. The motives for conducting this research are to introduce the supply chain strategies and new product development flexibility (NPDF) as constructs that could have the potential to contribute to the success of supply chain performance. Based on the relational view of the firm, the authors propose that supply chain strategy is an antecedent of NPDF and can create value for the buying firm in terms of better financial and non-financial performance. Design/methodology/approach – The structural equation modeling approach was used to evaluate the proposed model and analyze hypothesized relationships. The analysis, based on data collected from 175 small- and medium-sized (SME) Canadian manufacturing companies. Findings – The analysis shows that there are direct positive effects from strategy on NPDF. The findings indicate also a direct positive association between NPDF and performance and showed that the total effect (direct and indirect) positively influenced performance. Originality/value – The literature did not reveal any study which attempted to examine strategy, NPDF, and performance in the supply chain context of SMEs. The current study fills this important gap in the literature.