1997 ASEM Conference Information and Registration Form

Abstract

This article describes and explores several innovation strategies and identifies critical success factors from five new product developments (NPDs) within four technology-based companies. The analysis provides suggestions to new product professionals about how and when to use the best strategies for new products. Our recommendations are based on analyzing three successful and two unsuccessful projects. These projects included two services, one successful and one unsuccessful, and three products, two successful and one unsuccessful. For this study, we use the term “product” to refer to both products as well as services. What we found was that one new product strategy does not fit all innovations. A strategy must be tailored to the degree of uncertainty present in the project – both market as well as technical uncertainty.     

New product development in new ventures: the quest for resources

Innovation and new product development (NPD) are becoming more important as strategic initiatives. Yet, innovation creates challenges for most existing organisations, thus leading to the emergence of new ventures (NVs) as vehicles to deliver innovation. NVs present owners and management with unique opportunities and challenges. On one hand, the NV can focus its attention on specific innovation(s) without having to compete with other goals and departments for resource access. Resources are critical to the successful development and launch of new products and can come from financial lenders and/or suppliers. However, because they are new and because their only asset of worth is the highly risky innovation, NVs are at a strong disadvantage in securing access to these resources. This study explores the effectiveness of using personal equity investments as a strategy for securing access and for enhancing NPD success. Using signalling theory as the theoretical framework and data from 745 NPD projects representing manufacturing innovations, this study finds that equity investment is particularly successful in its NPD impact although not impactful with suppliers. As a signal, it can be argued that equity is a strong, high-quality signal. Reasons for these findings and directions for future research are provided.     

Critical Success Factors for New Product Development in Biotechnology Companies

The development of new products has become increasingly critical for the competitiveness of companies, due to increased diversity and variety of products, the reduction of product life cycles, and, primarily, globalization of markets. Thus, the identification and prioritization of critical success factors for developing new products is important, particularly for the high degree of risk and uncertainty involved. The main objective of this article is the identification and prioritization of critical success factors in new product development projects in biotechnology companies in the state of Minas Gerais, Brazil. The research method used was a survey questionnaire, which was sent to a sample of 31 biotechnology companies in Minas Gerais state. The principal findings of this research are that interpersonal skills/relationships of the project leader and technical skills are the most critical factors for successful new product development in this industry. The implications for the biotechnology industry in general, as well as for those responsible for managing new product development, are discussed.     

The effect of integrated product development on efficiency and innovation

This study tested the effect of integrated product development (IPD) on the efficiency and innovation displayed in new product development (NPD) projects. IPD refers to the overlap, parallel execution, and concurrent workflow of activities. More than 600 employees from 62 R&D projects in one large hi-tech electronics organisation participated in the study. The degree to which the projects had actual IPD, innovated and worked efficiently were measured using the organisation's data collection system and questionnaires. Analysis was conducted at the project level. Seven regression models, as well as multiple comparison tests, were applied. The findings suggest that IPD is positively associated with efficiency and negatively with innovation. However, the trade-off between efficiency and innovation in NPD projects can be balanced, if the IPD level of implementation is tailored to the NPD project stages. Specifically, to successfully complete an NPD project, the emphasis in early stages must be on innovation so that it can assist teams seeking new ideas. Hence, management should implement a low level of IPD at this point. In later stages efficiency must be emphasised so it assists control, and co-ordination, and consequently, IPD should be implemented intensively.     

Investments for New Product Development: A Break-Even Time Analysis

Abstract

Combining the product-process matrix and cost-volume-profit analysis, we identify a pattern of annual cash flows for new product development (NPD) and name it the New Product Investment Curve (NPIC). A sample of 411 firms provides confirming evidence for the NPIC. On average, firms needed 12 years to recover their initial and subsequent investments for NPD. The break-even time, however, exhibits significant differences across industries depending on the speed of innovation and the cost structure of each industry. Engineering managers in an industry with high R&D and high fixed costs need to prepare for longer break-even times than those in other industries. This article provides implications for the value of cooperation between engineering managers and financial managers in NPD.     

Knowledge Composition and Its Influence on New Product Development Performance in the Big Data Environment

Product innovation is regarded as a primary means for enterprises to maintain their competitive advantage. Knowledge transfer is a major way that enterprises access knowledge from the external environment for new product innovation. Knowledge transfer may face the risk of infringement of the intellectual property rights of other enterprises and the termination of licensing agreements by the knowledge source. Enterprises must develop independent innovation knowledge at the same time they profit from knowledge transfers. Therefore, new product development by an enterprise usually consists of three types of new knowledge: big data knowledge transferred from big data knowledge providers, private knowledge transferred from other enterprises, and new knowledge developed independently by an enterprise in the big data environment. To find what the influences of different types of knowledge are on new product development (NPD) performance, a model is presented that maximizes the expected NPD performance. The results show that the greater the weight of independent innovation knowledge, the greater the performance of NPD. Enterprises tend to transfer knowledge from the external environment when the research and development (R&D) investment is much higher, and enterprises will speed up independent innovation when independent innovation knowledge is expected to bring a larger market share. The model can help enterprises to determine knowledge composition, the scale of R&D investment and predict the performance of NPD.     

Worlds Apart? A Comparison of the New Product Development Strategies of Biopharmaceutical Firms in Europe and the USA

Globally the biopharmaceutical industry is characterized by strong competition, research-intensive and protracted new product development (NPD) processes, intensive regulation and extensive alliance activity. Policy regimes and operating environments differ markedly, however. Here we examine how these differences impact on the NPD strategies of biopharmaceutical firms in the USA and three major EU economies (the UK, France and Germany). Our analysis suggests four key differences between firms' NPD strategies in the two areas. First, while levels of R&D intensity and continuity are broadly similar in the two areas, US firms have notably stronger patent profiles, and are significantly more active in technology licensing than their European counterparts. Second, product development cycles are significantly longer in the USA than among our European respondents. Third, the nature of the product development pipeline is very different in the USA and the major European economies covered by our study: US firms conduct early stage development of more compounds than European firms but take only a similar number to market. Fourth, we see broadly similar levels of alliance activity in our US and European respondents at both the early and late stages of the NPD process. These results suggest a greater substitution of “market” for “hierarchy” in US firms' NPD strategies, reflecting differences in the availability and structure of government support in the USA and Europe.     

Performance Effects of Exploratory and Exploitative Innovation Strategies and the Moderating Role of External Innovation Partners

In today's dynamic environment, the involvement of external partners in the innovation process is frequently assumed to be a panacea to cut costs while improving outcomes. In this study, we scrutinize how different collaboration types influence the effects of exploitative and exploratory innovation strategies on new product development (NPD) performance. For our analyses, we draw on a survey comprising a sample of 254 technology-based German firms. Our findings indicate that exploitative strategies are best pursued without comprehensive external collaborations, while the involvement of several partners in a balanced approach is most promising for exploratory strategies. Joint exploration with competitors, in particular, shows the highest effects on NPD performance. The paper discusses the findings and provides several implications for future research.     

Product service systems,after-sales service and new product development

After-sales service is a critical element in the successful marketing of many products. Capital goods, for example, manufacturing equipment, require after-sales service such as maintenance and repair in order for customers to get the full value from them. Some manufacturers have started to offer customers an integrated product and service, termed a product-service system in the academic literature. However, in order to deliver such integrated offerings, a different approach to new product development (NPD) is required. This is because the product design influences after-sales service requirements, and so this needs to be considered during NPD. However, researchers have largely ignored the relationship between NPD and service. To address this gap, six in-depth case studies were conducted at leading companies that offer a combined product-service offering, to identify how service requirements are typically evaluated at the design stage. The results show that at companies where after-sales is an important element of the business, service requirements are systematically evaluated during NPD through the involvement of after-sales personnel and the use of field service data to set design goals.     

Examining the State of Risk Management Research in New Product Development Process

New products are major sources of competitive advantage and success for a manufacturing enterprise. However, not all new product development (NPD) initiatives result in a successful product and are therefore a major cause of wasted resources. Furthermore, NPD processes are becoming increasingly complex and risky due to today’s globalized market and customers’ desire for technologically advanced products. While there has been a significant interest in academia about NPD risks, the existing literature is spread across multiple outlets, making it difficult for any practitioner or researcher to synthesize the current work. This article aims to minimize that gap by providing a comprehensive overview of current research activities in the field of risk management in NPD process in one place. The research design is based on mapping and classification of the existing body of knowledge into the domains of NPD risk analysis and management. The article analyzes the contemporary NPD risk analysis methods on three fronts: risk identification, risk assessment, and risk mitigation. Based on the review, the article then identifies and discusses several key areas for future research significant to engineering management practices. Finally, an integrated framework is presented to provide a holistic approach toward risk management in the NPD process, followed by the practical implications for engineering managers and practitioners.     

The role of relationship promoter in new product development collaboration

Since new product development (NPD) collaborations with external partners have become the next generation in NPD practices, relationship promoters have become especially relevant as key contributors to the success of this type of inter-organisational collaboration. To realise successful outcomes in NPD collaborations, partners face the challenge of effectively integrating the role of relationship promoter into their existing and essential relationships of trust. It is within this context that this paper examines the role of the relationship promoter, by analysing its moderating effect on the relationship between trust and the outcomes of NPD collaboration – including new product competitiveness and partner satisfaction. We test our hypotheses against survey data from 107 innovative firms involved in NPD collaboration with the help of relationship promoters. The results show that, while a non-significant influence can be reported about the presence of a relationship promoter in terms of partner satisfaction, the relationship promotor weakens the influence of trust on new product competitiveness, making trust less important when it comes to creating a competitive new product.     

Sequencing and batching procedures for minimizing earliness and tardiness penalty of order retrievals

External involvement in new product development (NPD) has received increasing attention from both academicians and practitioners in recent years. While external involvement has been studied extensively, the academic understanding on how external involvement influences firm performance and the role of time-to-market of new products is still very limited. Drawing on the literature on innovation search and knowledge-based view, we develop a conceptual framework in which external involvement is linked to time-to-market of new products and firm performance. We tested this model using data collected from 176 manufacturing companies in China. The results indicate that both customer and supplier involvement can contribute to the reduction of time-to-market of new products. We also show that time-to-market of new products completely mediates the relationships between two types of external involvement and two dimensions of firm performance. These findings have important implications for research and practice in both the external involvement and the NPD areas.     

Multi-generation pricing and timing decisions in new product development

When planning for the introduction of a stream of new products into the marketplace, managers must consider both the timing and dynamic pricing decisions to determine an appropriate entry strategy into the marketplace. Literature in new product development (NPD) typically addresses optimal timing and pricing decisions independently. We develop an analytical model of coordinated product timing and pricing decisions when there are two generations of a new product under consideration. Factors driving the timing and pricing decisions include the unit sales and cost relationships for each generation as well as NPD costs for introducing the next generation of products. We derive analytic results that characterise the optimal timing and pricing strategies for a single product rollover scenario. We analyse several numerical examples to illustrate the interplay between optimal pricing and time-to-market strategies under more general settings.     

Improving the NPD Process by Applying Lean Principles: A Case Study

Abstract:

This article extends the new product development (NPD) literature by presenting a case study of a lean product development (LPD) transformation framework implemented at a U.S. based manufacturing firm. In a departure from typical LPD methods, in this article the design structure matrix and the cause and effect matrix are integrated into the lean transformation framework, allowing analysis of the underlying complexity of a product development (PD) system, and thus facilitating determination of the root causes of wasteful reworks. Several strategies to transform the current PD process into a lean process are discussed. Besides the two-phase improvement plan, a new organizational structure roadmap and a human resources plan are also suggested to support the recommended changes in the NPD process. The results of the first phase show a 32% reduction in PD cycle time due to the proposed NPD process. The article concludes with lessons learned and implications for engineering managers based on the case study.     

Supplier involvement in new product development projects: dimensionality and contingency effects

In contrast to previous literature, we hypothesize supplier involvement in new product development (NPD) projects to be multidimensional in nature and test this assumption using data from a large sample of NPD projects. We also test the contingent influence of supplier involvement on NPD project performance. The results supported the claim of multidimensionality of supplier involvement. Three distinct factors–communication and information sharing, design involvement and infrastructure–comprising supplier involvement were found. These factors were significantly related to one or more measures of NPD project performance. The study also found support for the contingent influence of market stability on the supplier involvement–NPD project performance relationships. The results suggest that managers ought to consider adopting different bundles of supplier involvement practices that depend on the level of stability in markets and also on the type of NPD performance objective that is being considered.     

Influence of the Adoption and Use of Social Media Tools on Absorptive Capacity in New Product Development

Abstract:

In this article, we discuss how the adoption and use of social media tools influences new product development (NPD). Our aim is specifically to consider how an organization's absorptive capacity is influenced by using social media tools. Based on a two-phase data collection process comparing the situation before and after adoption of social media tools in three organizations, we conclude that the amount of accessible knowledge and the number of ideas increases as an organization's ability to find and access various sources of intra-organizational expertise increases, thus, increasing knowledge acquisition and assimilation. Consequently, we infer that organizational absorptive capacity rises and is linked to improvement in new product development.     

A holistic view of knowledge integration in collaborative supply chains

New product development (NPD) projects offer a unique opportunity to examine knowledge integration themes in a collaborative network. We propose a finer grained view of knowledge integration mechanisms in collaborative supply chains. Specifically, we propose two different types of mechanisms that are in play within a collaborative supply chain; short-term knowledge sharing and iterative knowledge enrichment. Using data from a large and diverse set of 432 NPD projects, we investigate the effects of knowledge sharing and enrichment between firms and their collaborative network partners, on product concept effectiveness and process performance. Our findings suggest that knowledge sharing and enrichment are significant mechanisms for enterprise-wide knowledge integration in collaborative networks. In addition, upstream knowledge sharing and enrichment has a significant influence on both product concept effectiveness and manufacturing process performance, over and above the effects of downstream knowledge sharing and enrichment. The relationship of upstream and downstream knowledge sharing and enrichment on product concept effectiveness and process performance had varying effects based on the contexts of product type, stage in the product life cycle and project size, indicating a context-specific influence of knowledge strategies. The implication of our results on academic theory and managerial practice is offered.     

Influence of market orientation on performance: the moderating roles of customer participation breadth and depth in new product development

ABSTRACT

With a greater number of B2B firms integrating customers into the new product development (NPD) process, how to utilize customer involvement in NPD is an important decision because it may be a double-edged sword carrying both bright and dark sides. Utilizing a sample of 193 B2B firms across various industries, we validate previous research that suggests market orientation positively influences NPD performance and subsequently examine how this relationship may either be enhanced or diminished contingent upon how customers are utilized in the NPD process. The results show that the market orientation–NPD performance relationship is enhanced by having customers participate in a greater number of activities throughout NPD (customer participation breadth) and diminished when customers are involved at deeper levels (customer participation depth). This research suggests that the exact involvement of customers is a critical decision and has clear implications for the dialogues about customer involvement and management of customer relationships.     

Fuzzy decision support for tools selection in the core front end activities of new product development

The innovation process may be divided into three main parts: the front end (FE), the new product development (NPD) process, and the commercialization. Every NPD process has a FE in which products and projects are defined. However, companies tend to begin the stages of FE without a clear definition or analysis of the process to go from Opportunity Identification to Concept Generation; as a result, the FE process is often aborted or forced to be restarted. Koen’s Model for the FE is composed of five phases. In each of the phases, several tools can be used by designers/managers in order to improve, structure, and organize their work. However, these tools tend to be selected and used in a heuristic manner. Additionally, some tools are more effective during certain phases of the FE than others. Using tools in the FE has a cost to the company, in terms of time, space needed, people involved, etc. Hence, an economic evaluation of the cost of tool usage is critical, and there is furthermore a need to characterize them in terms of their influence on the FE. This paper focuses on decision support for managers/designers in their process of assessing the cost of choosing/using tools in the core front end (CFE) activities identified by Koen, namely Opportunity Identification and Opportunity Analysis. This is achieved by first analyzing the influencing factors (firm context, industry context, macro-environment) along with data collection from managers followed by the automatic construction of fuzzy decision support models (FDSM) of the discovered relationships. The decision support focuses upon the estimated investment needed for the use of tools during the CFE. The generation of FDSMs is carried out automatically using a specialized genetic algorithm, applied to learning data obtained from five experienced managers, working for five different companies. The automatically constructed FDSMs accurately reproduced the managers’ estimations using the learning data sets and were very robust when validated with hidden data sets. The developed models can be easily used for quick financial assessments of tools by the person responsible for the early stage of product development within a design team. The type of assessment proposed in this paper would better suit product development teams in companies that are cost-focused and where the trade-offs between what (material), who (staff), and how long (time) to involve in CFE activities can vary a lot and hence largely influence their financial performances later on in the NPD process.