Successful Product Innovation Research Articles

Biotechnology Commercialization Strategies: Risk and Return in Interfirm Cooperation

The management and exploitation of biotechnological product innovation have proven to be more difficult than initially expected because the number of currently marketed biotechnological products is far from sufficient to counter deficits in pharmaceutical innovation. This study provides insight into the role of governance structures in interfirm cooperation and their effects on biotechnological product innovation and company success. Most of the existing literature regarding alliances and mergers and acquisitions (M&A) examines their effects on technology recipients' innovation performance. Here, the effects of alliances and M&A on both the innovation success and financial performance of technology suppliers (i.e., sources) are examined. Drawing from a sample of 220 human therapeutic biotechnology and biopharmaceutical firms over a period of 32 years (1980–2011), an analysis of the effects of biotechnology clusters, strategic alliances, and acquisitions is provided. This study reveals the existence of a risk‐return trade‐off for strategic alliances between biotech companies and larger, more established firms. Increased biotech company involvement in product development alliances decreases risk by increasing the likelihood of future product introductions. The trade‐off, however, is that biotech companies earn lower returns when their products are developed through such alliances. A similar risk‐return trade‐off effect is found for clusters. However, acquisitions generally affect both product introductions and product returns in a negative way. These findings have strategic implications not only for managing the development of biotechnological product innovations and technology platforms but also for commercialization strategies with respect to interfirm cooperation and risk reduction.

Critical elements for product innovation at Portuguese innovative SMEs: an intellectual capital perspective

The general purpose of this research is to study interaction effects between intangible assets and product innovation. More specifically, the authors build on the intellectual capital-based view of the firm and new product development perspectives to analyse which intellectual capital elements affect product innovation performance at innovative small and medium enterprises (SMEs) from Portugal, and what are their interdependencies, if any, in that process. The findings confirm that intellectual capital does influence product innovation performance at Portuguese innovative SMEs. However, not all intellectual capital elements that were identified for the purpose of this research show such a relevant effect. In fact, only three elements, coming, respectively, from human, relational and structural capital, effectively reveal a significant impact on product innovation performance. Those are ‘Commitment to the Product Innovation Process’, ‘Vertical Relationships’ and ‘Product Innovation Management and Strategy’. In addition, only structural capital elements exhibit a significant direct impact on product innovation success. Human capital and relational capital elements affect product innovation indirectly, through their interaction with structural capital. Our findings contribute to a better understanding of the impact of intellectual capital elements on product innovation at SMEs, providing more evidence on which to build an intellectual capital-based view of corporate phenomena.

Breakeven Time on New Product Launches: An Investigation of the Drivers and Impact on Firm Performance

The ability to break even faster on new product projects is becoming increasingly critical for firms in fast‐moving industries where continually reinvesting in research and development efforts matters greatly for survival. However, most research to date has focused on studying the impact of two primary innovation outcomes: sales and profits. The exclusive emphasis on sales and profit may be warranted for certain types of goods such as durable goods, but when examining the effects of new products in fast‐moving consumer goods or in the entrepreneurial sphere, where cash to cash matters greatly for survival, it is critical for both researchers and practitioners to not only consider the profits and sales generated by the new product but also the time to breakeven. This paper develops a theoretical framework using the competency‐based literature to examine the effects of innovation drivers (customer idea source, speed to market, product quality, and product newness) on breakeven time (BET) and project profits, and their subsequent impact on firm performance. A three‐stage least square estimation method was employed using longitudinal data on 945 new product development projects and launches in the morning (breakfast) foods category. The results clearly pinpoint that for successful product innovation, managers need to consider the time taken to breakeven on new product development. Specifically, the results demonstrate that speed to market and product quality shorten BET, but customer idea source extends BET. Second, the analysis also empirically demonstrates that BET is an equally effective predictor of firm performance as project profits in the short run, but significantly a stronger predictor of firm performance in the long run (t + four years), suggesting that BET should be regarded as a superior leading indicator of firm performance versus product profitability for fast‐moving consumer goods segment. This is an important finding that suggests firms that recoup their cash investments more quickly experience greater short‐term and significantly more long‐term success.

MARKET ORIENTATION, TECHNOLOGY ORIENTATION AND PRODUCT INNOVATION SUCCESS: INSIGHTS FROM CoPS

This study explores how market orientation and technology orientation within fuzzy front end phases affect product innovation success in complex products and systems (CoPS) industry research and development (R&D) organisations. A sequential qualitative–quantitative mixed method was used with a single case study and a questionnaire survey. The case study results show mix effects of market orientation and technology orientation on CoPS innovation success within fuzzy front end phases. The empirical test results show that a market orientation facilitates both low-tech and high-tech CoPS innovation success and offer great benefits to mainstream customers. A technology orientation is beneficial to high-tech CoPS innovation success but has no impact on low-tech CoPS innovation success. The results have significant implications for CoPS firm strategies to facilitate product innovations and achieve competitive advantages.

The contextual nature of innovation – An empirical investigation of three software intensive products

ContextNew products create significant opportunities for differentiation and competitive advantage. To increase the chances of new product success, a universal set of critical activities and determinants have been recommended. Some researchers believe, however, that these factors are not universal, but are contextual. ObjectiveThis paper reports innovation processes followed to develop three software intensive products for understanding how and why innovation practice is dependent on innovation context. MethodThis paper reports innovation processes and practices with an in-depth multi-case study of three software product innovations from Ericsson, IBM, and Rorotika. It describes the actual innovation processes followed in the three cases and discusses the observed innovation practice and relates it to state-of-the-art. ResultsThe cases point to a set of contextual factors that influence the choice of innovation activities and determinants for developing successful product innovations. The cases provide evidence that innovation practice cannot be standardized, but is contextual in nature. ConclusionThe rich description of the interaction between context and innovation practice enables future investigations into contextual elements that influence innovation practice, and calls for the creation of frameworks enabling activity and determinant selection for a given context – since one size does not fit all.

The Form of Relationship between Firm‐Level Product Innovativeness and New Product Performance in Developed and Emerging Markets

This study compares the new product performance outcomes of firm‐level product innovativeness across a developed and emerging market context. In so doing, a model is constructed in which the relationship between firm‐level product innovativeness and new product performance is anticipated to be curvilinear, and in which the nature of this relationship is argued to be dependent on organizational and environmental factors.The model is tested using primary data obtained from chief executive officers and finance managers in 319 firms operating in the United Kingdom, an advanced Western market, and 221 firms from Ghana, an emerging Sub‐Saharan African market. The model is assessed using a structural equation model multigroup analysis approach with LISREL 8.5.In the United Kingdom and Ghana, the basic form of the relationship between firm‐level product innovativeness and business success is inverted U‐shaped, but the strength and/or form of this relationship changes under differing levels of market orientation, access to financial resources, and environmental dynamism. While commonalities are identified across the two countries (market orientation helps firms leverage their product innovativeness), differences are also observed across the samples. In Ghana, access to financial resources enhances the relationship between product innovativeness and new product performance, unlike in the United Kingdom where no moderation is observed. Furthermore, while U.K. firms leverage product innovativeness to their advantage in more dynamic environments, Ghanaian firms do not benefit in this way: here, high levels of innovation activity are less useful when markets are more dynamic.If the study's findings generalize, there are a number of implications for managers of both emerging and developed market businesses. First, managers in both developed and developing market firms should focus on determining and managing an optimal balance of novel and intensive product innovativeness within the context of their unique institutional environments. Second, for emerging market firms, a market orientation capability helps businesses leverage local market intelligence, enabling them to compete with multinational giants flocking to emerging markets, but typical developed market learning approaches may be insufficient for multinational firms when seeking to compete in emerging markets. Third, for emerging market firms, access to finances helps deliver product innovation success (although this is not the case for developed market firms, possibly due to strong financial institutions). Finally, unlike developed market firms, burdened by institutional voids at home, emerging market firms appear to be less capable of competing on an innovation front in more dynamic market conditions. Accordingly, policymakers in emerging markets should consider identifying ways to help businesses raise market orientation levels, and seek to create conditions that enhance access to financial capital (e.g., direct financing, matching grants, tax rebates, or rewarding firms that innovate creatively and intensely). Likewise, since environmental dynamism is likely to be a growing issue for emerging markets, efforts to help firms become more adept at keeping up with more agile developed market counterparts are needed.

Product innovation and cause-related marketing success

Purpose– The purpose of this paper is twofold. First, the authors aim to identify all the product- and brand-related factors that promote cause-related marketing (CRM) success. The second part of this research aim is, to undertake a product innovation theory application into the context of CRM, examine the degree and nature of its theoretical and practical consonance, and develop an integrated conceptual framework for CRM success.Design/methodology/approach– The paper is conceptual and incorporates and interrelates the findings of existing CRM research as applied within the context of corporate social responsibility (CSR). Specifically this paper accumulates the state of prior wisdom on CRM success through the identification of several product- and brand-related success factors, based on a systematic review of the literature. In doing so, it introduces the concept of product innovation as a CRM success factor and integrates those distinct fields into a conceptual framework.Findings– The authors develop an integrative framework and a propositional inventory that represents a consolidated foundation for the systematic development of a theory for successful CRM strategies, along with the integration of product innovation within the field of CRM.Research limitations/implications– Towards this direction, the objective of this study is theory construction rather than theory testing. Thus, much work remains to be done in terms of empirically testing our research propositions. In conclusion, this paper posits a set of research directions designed to enable scholars to further advance the integration of product innovation and CRM from both problem-driven theory development as well as theory-driven practice management perspectives.Originality/value– The value of this paper accumulates the state of prior wisdom on CRM success, a notion with increasing use by corporations in recent years. Furthermore, this paper appears to be the first of its kind to examine, from the theorist perspective, the dynamics implied by synthesizing these, so far, distinct concepts. Additionally, the research adds appreciable value to academic knowledge on the fundamental discussion of the bidirectional relationship between CSR and innovation, also contributing an analogous CRM success framework to the existing wisdom.

Technological innovations and its influence on the growth of auto component SMEs of Bangalore: A case study approach

This paper describes the nature and dimensions of technological innovations leading to the development and introduction of new products and market expansion along with enterprise growth with reference to three auto component SMEs of Bangalore in India. The study brings out that the entrepreneurs played an instrumental role in recognizing market opportunities, building up crucial in-house technological capability, supplement it with appropriate external assistance to carry out technological innovations including its modifications to suit customer requirements and finally deliver it to the market. An important feature of these innovations is that constant interaction with its customers is in-built into the system. As a result, all the three SMEs could achieve successful product innovations which led to their gradual growth over time in terms of employment, investment and more importantly in terms of sales turnover. Further, by stringing the inferences of the three cases a theoretical construct of the growth of innovations in SMEs in three stages of their development – start-up and stabilizing, building technological credibility and opening up of new markets – is proposed. These stages are (i) attaining design standards, (ii) incremental innovations, and (iii) ushering radical innovation.

What is the role of commercialisation and reputation in product innovation success?

This paper analyses the role of commercialisation strategy and product reputation in the relationship between innovation and the market performance. This is a particularly interesting question for high tech companies. The technical complexity of their products can make it difficult for the consumer to evaluate their degree of quality and innovation. Because of this, companies need to focus effort on the innovation diffusion process. This study uses Partial Least Squares to demonstrate that the commercialisation and reputation of innovative product intervene in the relationship between innovation and product success in the market. They have a mediating effect that explains the positive impact of the former on the latter. In light of the results, these mediating variables may be considered complementary tools for achieving innovation success into the market.

An empirical analysis on technophobia/technophilia in consumer market segmentation

Many factors can affect the success of food product innovations. One such factor is the role played by consumer attitudes and psychological factors, especially the way consumers feel towards technology, their attitude towards risk, and the perceived relationship between nutrition and health. With a view to analysing these factors, this paper first identifies consumer groups using a technophobia/technophilia scale and then relates attitude to technology with purchasing behaviour regarding products which have a higher level of manipulation. A set of statements based on the psychometric scale proposed by Cox and Evans was administered to a sample of 355 individuals intercepted as they left supermarkets and hypermarkets. Principal component analysis and cluster analysis were applied to identify groups of homogeneous individuals with regard to the behaviour of the interviewees in relation to technology. Results show the presence of seven different groups, including a small group of convinced technophiles (13% of the sample). This group of early adopters can play an important role in promoting the use of innovative products, thereby contributing to a rapid increase in demand. Moreover, an important aspect was the result with respect to confidence attributed to the media in ensuring correct and unbiased information regarding new food technologies. Many of the respondents judged the media negatively in this respect. However, appropriate use of the media could be an important lever to counteract the attitude of caution or scepticism.

Beyond ‘Funnel’ and ‘Fireworks’: ‘Water Ribbed Balloon’ as a New Metaphorical Approach to Innovation-in-Practice

Product innovation success has very much to do with the development of models ormetaphors that are able to guide actors. One can observe two traditions in thisregard: rational and non-rational models. Apparently in the former the model, suchas “development funnel”, is regarded as a mechanism and rigid applicable, picturinginnovation as an orderly, goal-oriented, value-neutral, and systematic process. Thelatter account offers a few non-rational models that depict product innovation aschaotic, messy, and stressful which involves jagged lines of activity, much like“fireworks”. This paper draws on the work of Donald Schon to develop a moresocio-politically informed yet pragmatic approach to innovation in organisation i.e.‘ribbed water balloon’. This model outlines product innovation as a non-rational andsocio-technical practice, one that not only reveals politics, uncertainty, unsteadiness,setbacks, and reversals with which actors grapple but also considers rituals, normsand organization’s behavioral world in its understanding.

How to implement secondary product innovations for the domestic market: a case from Haier washing machines

The large domestic market of China has provided opportunities for Chinese firms to implement successful product innovations based partially on imported technology. This paper analyses the secondary product innovations as redesigning and reconstructing the original product architecture of first movers in order to adapt to the customer needs in the domestic market. We have found that latecomers can implement secondary product innovations for the domestic market in three ways: architecture localisation (adjusting to general local needs), customer-triggered special design (changing to penetrate segments with special needs), and derivative integration (reconstructing/recombining components). Considering those implementation methods, there has been an induction of secondary product innovation stages in Haier washing machines. This paper contributes to latecomer market adaption and product architecture issues in addition to the traditional technological catch-up analysis.

Innovation in small and medium-sized companies: Knowledge integration mechanisms and the role of top managers’ networks

IntroductionPrevious research has delivered strong theoretical and empirical evidence that successful product innovations result from the of organizations to share and create new and relevant knowledge (e.g. Nonaka & Takeuchi, 1995). In particular, it is argued that the organizational combinative ability (Kogut & Zander, 1992), that is flexible integration of the specialized knowledge of various organizational members (Grant, 1996), plays critical role for innovations. Contrary to the past, as expertise could be centralized in single person who knew [...] the product technology, production process, and means to market goods to others (Griffin & Hauser, 1996, p. 192), now an intensive cooperation and knowledge flow between different functional specialties (e.g. Maltz et al., 2001, p. 72) as well as hierarchical levels (e.g. Aalbers et al., 2011) becomes an important precondition for product innovation. Past research has revealed that particularly for highly innovative products, knowledge integration within organizations plays crucial role in increasing new product performance (Tsai et al., 2012). Previous studies also identified number of integration mechanisms by which crossborder exchange of knowledge within organizations can be fostered (e.g. Griffin & Hauser, 1996; Leenders & Wierenga, 2002). For instance, in comprehensive review of empirical work into the success factors of new product development (NPD), Ernst (2002) found that cross-functional project teams have both direct and an indirect positive effect on the success of new products (Ernst, 2002). More specifically, as argued by Griffin and Hauser (1996, p. 204), such cross-functional product development teams lead to higher marketplace success and shorter times to market by decreasing the barriers of functionally specialized thought worlds, languages and organizational responsibilities and providing forum in which information is utilized better, decisions are made more effectively, and conflicts are resolved. In similar vein, Valle and Avella (2003) found that firms which use cross-functional teams, are characterized by more effective NPD process (that is, lower development times and costs, and superior products) and higher percentage of new products that are successful in the market.In addition to cross-functional teams, large number of empirical studies identified the support of senior management as critical success factor of NPD (e.g. Brown & Eisenhardt, 1995; Cooper et al., 2004a). Senior managers provide the NPD team with the financial and political resources necessary to accelerate the progress of development projects (Brown & Eisenhardt, 1995). Moreover, senior managers help the NPD team to align their projects with the firm's overall strategic orientation. Thus, as Aalbers et al. (2011, p. 5) point out, vertical cross-hierarchy ties can provide the team with access to knowledge and information of different nature than that which the team accesses through its horizontal cross-unit ties. Accordingly, the participation of senior management in the gate meetings is seen as an important mechanism for knowledge integration within the new product development process (e.g. Cooper et al., 2004a).While numerous studies have addressed multiple aspects of integration and its impact on innovation performance, one important issue is still under-explored. In the samples of previous empirical studies big organizations were largely overrepresented (e.g. Griffin, 1997; Hauschildt & Salomo, 2011) and the contingencies of small and medium-sized enterprises (SMEs) have not been considered in comprehensive manner. This is critical point, since, as Welsh and White (1981) note, a small business is not little big business. Thus, management principles that have proven to be successful in large companies may prove the opposite in SMEs (Welsh & White, 1981). As SMEs constitute over 99 percent of all companies in the European Union, reinforcing national economies by their employment offers and revenues (Eurostat, 2009), focused analysis of knowledge integration in these companies is important from both the theoretical and the practical perspective. …

Integrated risk management and product innovation in China: The moderating role of board of directors

This study explored the role of the board of directors in the relationship between integrated risk management and product innovation. We focused on a board's direct involvement in risk oversight and its use of external audit in risk oversight, and examined their moderating effects on the relationship between integrated risk management and product innovation. Panel data from a survey of 1178 Chinese firms was analyzed to test the hypotheses. A board's direct involvement in risk oversight was found to negatively moderate the positive relationship between integrated risk management and product innovation success. The use of external audit in risk oversight similarly weakens the relationship. These results show how an effective board contributes to the innovation benefits associated with risk management in product innovation. They also have important implications for emerging economy firms pursuing an integrated approach to risk management in product innovation.

Local and international knowledge search and product innovation: The moderating role of technology boundary spanning

Drawing on the external knowledge search literature and the literature on international diversification, this study examined the interactive effect of local and international search for new knowledge on product innovation and the moderating role of a firm's technology boundary spanning activities. Specifically, it proposed that extensive local and international search interact to positively predict product innovation success and this relationship is weaker for firms entering a new technology domain. The results using data on 343 Chinese manufacturing firms across 5 industries indicated the support for the predictions.

Radical Product Innovation Capability: Literature Review, Synthesis, and Illustrative Research Propositions

Product innovation is a key to organizational renewal and success. Relative to other forms of innovation, radical product innovations offer unprecedented customer benefits, substantial cost reductions, or the ability to create new businesses, any of which should lead to superior organizational performance. In other words, a radical product innovation capability is a dynamic capability, one that enables the organization to maintain alignment with rapidly evolving customer needs in high‐velocity environments. Extensive research has been conducted on the antecedents to an incremental/general product innovation capability, and meta‐analyses have been conducted to integrate the results from the various studies. However, whether and how a radical product innovation capability differs from an incremental product innovation capability is also critical. The purpose of this work is to develop a testable model of the antecedents to radical product innovation success. Based on an extensive literature review, a comprehensive set of organizational components that comprise a firm's radical product innovation capability is identified. These organizational components include senior leadership, organizational culture, organizational architecture, the radical product innovation development process, and the product launch strategy. Of course, each of these components has subcomponents that provide even more texture. This review highlights how the components of a radical innovation capability function differently from those for an incremental capability. In addition, this review strongly suggests that the direct effects models that dominate this literature underestimate the complexity of the interplay of components that comprise a radical product innovation capability. Thus, a model to demonstrate this interplay of these organizational components is provided. Illustrative research propositions are offered to provide guidance to researchers. Suggestions for executives and managers who are involved in the product development process and for scholars who seek to advance the state of knowledge in this area are offered in the conclusion.

Exploring the value of brands on the montenegrin bottled spring water market

The branding strategy is based on future goals relating to clients, aimed at increasing awareness of the brand, creating a positive brand image and establishing a preference for the brand and ensuing brand loyalty. A brand is a very important factor for competitiveness and establishes a leadership position in the market, given the major impact that this form of intellectual property has on the perception of consumers and the success of innovative products on the market. The bottled water market has increased by about 35% in the last five years on the global level, dictated by young consumers who are becoming increasingly aware of the significance of proper nutrition in maintaining health. The research presents qualitative information on the market value of bottled water brands, the general characteristics of retailers, as well as on their target customers. The main task of this paper is to confirm the usefulness of marketing research in modern business as well as to present the benefits of brand value measurement to current or future brand owners. It is to be hoped that the results presented in this paper may serve as a good basis for upgrading marketing activities, based on a better understanding of target customers and their particular needs, through better communication for the purpose of stronger corporate branding.

Success factors for environmentally sustainable product innovation: a systematic literature review

The growing awareness regarding environmental sustainability has fully reached business reality. Consumers and companies alike are looking for alternatives to mitigate pressing environmental demands resulting from continuous population and economic growth. On the other hand, companies must deal with an increasingly competitive scenario where innovation is regarded as a survival need in most markets. It is thus clear that systematic academic research is paramount to guide companies to succeed in environmentally sustainable product innovation. In this context, this paper (i) consolidate extant research and aggregate findings of different studies on environmentally sustainable product innovation through an interpretative framework of published literature on the topic, and (ii) map critical success factors that drive the success of product innovation developed in this new logic of production and consumption. To achieve these objectives, a systematic literature review on environmentally sustainable product innovation was conducted. Results show that there are four main critical success factors for environmentally sustainable product innovation: market, law and regulation knowledge; interfunctional collaboration; innovation-oriented learning; and R&D investments. The factors identified in this research and corresponding variables were subjected to a brief empirical test by professionals. The test allowed a preliminary approval of the developed framework and identification of the most important variables within each factor. A research agenda based on the state-of-the-art on the topic is also proposed.

Product innovation of private health insurers in South Africa and the impact of entrepreneurial orientation

Recognising that health insurer product innovation plays a critical role in aligning incentives among all stakeholders in the healthcare value chain, this study investigates the relationship between the level of health insurer product innovation and entrepreneurial orientation (EO). Taking cognisance of the importance of external collaboration between health insurers and healthcare service providers, the study is able to diagnose perceptions of strategic regulatory factors and their impact on levels of EO. The focus of the study is on the demand (financing) and supply (healthcare delivery) structures of the healthcare value chain, incorporating health insurers, health insurer administrators and healthcare service providers. A conceptual model is formulated on the basis of literature and tested using confirmatory factor analysis. The results indicate that EO at organisational level is a strong predictor of health insurer product innovation and that external collaboration between health insurers and healthcare service providers is a weak predictor of health insurer product innovation. Practical implications are that both the supply and demand side structures indicate that the restructuring of relationships between health insurers and healthcare service providers is a necessary driver for collaboration in terms of health insurer product innovation progress and success. Healthcare executives need to work with, and actively lobby regulators to ignite both demand and supply side innovation activities in the healthcare value chain of the private healthcare industry of South Africa.

Technology Change and Dynamic Entrepreneurial Capabilities

The paper examines how a small entrepreneurial firm can achieve successful product innovation and technology change by substituting the traditional drivers for innovation with higher order organizational capabilities. In particular, we introduce the concept of dynamic entrepreneurial capabilities defined as higher order capabilities peculiar to small and medium‐sized enterprises. We used a longitudinal case study to investigate a complex and discontinuous technology innovation undertaken by Vetromed. Our findings clarify the role of dynamic entrepreneurial capabilities in enacting, developing, refining, and deploying three substantive entrepreneurial capabilities: distributed entrepreneurial insight, entrepreneurial heuristics, and entrepreneurial flexibility.