The purpose of
this article is to advance the understanding of how certain resources available
to a firm may interrelate with choices of strategy in the domain of new product
development aimed at global markets and thereby impact resulting
performance. The reason why this is
important to leaders is that they will come to better understand potential factors
and their interrelationships that need full consideration when making decisions
for improving firm performance. Primary
focus is on factors potentially posing underlying advantages a firm may possess
and potential strategies a firm may leverage to effectively field new products
in the global market place..
The type of
research involved with this article both hypothesis testing as well as model
advancing. The article specifies that it
draws on what is called “the resource-based view” (Brentani, p. 143) The article also references prior work
relating new product development strategy.
The emphasis in this article is integrating key aspects from the
resource-based view with strategic choices for new product development as
applied to the global market place. The
authors propose a three part model relating “behavioral environment” with “global
new product development strategy” and how in doing so that impacts resulting
“global new product development program performance.” The model is designed in a fashion that
provides testing antecedent relationships between the individual aspects
composing the factors and firm performance. Behavioral environment is broken
into two parallel subcategories, namely “global innovative culture” and “senior
management involvement.” Global new product development strategy is broken into
two parallel subcategories, namely “global presence strategy” and “global
harmonization strategy.” And global new
product development program performance is broken into three subcategories with
a parallel and serial relationships implied, namely “time to market” is in
parallel with “windows of opportunity” and both together are in series with
“financial outcome.” (Brentani, p. 146) Altogether there are eleven different
hypotheses tested. Four hypotheses test
the relationships between the two behavioral element subcategories and two
global new product development subcategories. Six hypotheses test the
relationships between the global new product development subcategories and the
global new product development program performance subcategories. And two hypothesis test the relationship in
global new product development program performance subcategories between time
to market and windows of opportunity with that of financial outcome.
Key findings
from testing the eleven hypotheses is that most presented held true and
supported the there was an antecedent relationship between the firm’s
resources, the strategies chosen for new product development in the global
market place and resulting performance.
The two hypotheses that were not supported by the data included the
relationship between global product harmonization strategy and time to market
as well as the relationship between global presence strategy and financial
outcome. The former is likely due to the
complications that arise when try to appropriately roll out a product in ways
that leverage advantage coming form standardization yet allowing for tailing
necessary to accommodate local preferences.
The later may be from that having new product deployed everywhere in the
global marketplace does not necessarily correlate directly with significant
improvements to a firm’s bottom line.
There are several implications
associated with this article that practicing executives should be aware of in
their deliberations for how best to steer their firms. First, there is relationship between the
underlying resources that a company has at its disposal and the strategies they
chose to deploy. They need to be aware
that not all strategies may fit their firm.
Second, while the paper presents two subcategories for the behavioral
environment and two more subcategories for the global new product development
strategy there are most likely others that are (or should be) of interest to
the firm given their particular context.
Likewise, while time to market and windows of opportunity were also two
subcategories in the performance factor area, there may be others that drive
the resulting financial outcome. And
third, through reading this article a practicing executive will come to better
appreciate what is entailed with a developing a culture embracing
innovativeness as well as more fully understand how involvement of senior
management can be leveraged. I really
liked those two specific examples chosen as the behavior environment
subcategories and better understand why a firms specific resources facilitate
creating strategic advantages.
Citation
de Brentani, U., Kleinschmidt,
E., and Salomo, S. (2010). Success in
Global New Product Development: Impact of Strategy and the Behavioral
Environment of the Firm. Journal of Product Innovation Management
27: 143-160.
I agree with the notion that strategy and direction should be tied to available resources. Not only should financial resources be considered, but all types as the article indicates. Too often firms over extend their abilities, increasing risk.
ReplyDeleteYes I agree with you. I think not all resources are strategically relevant resources though. Some resources may have no impact on strategy. Only when resources are valuable, rare, non-imitable and not strategically equivalent, can they generate innovative strategies. Every firm should analyze what resources they possess before they choose a strategy.
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