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Tailoring product development to strategy: case of a European technology manufacturer

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  • Loch, Christoph

Abstract

A large body of work on new product development (NPD) has identified a number of general success drivers, which imply 'best practice' approaches in NPD. In particular, a newer market or a newer technology renders a project riskier and, therefore, requires a higher hurdle rate on returns. Furthermore, a good NPD process exhibits customer orientation and demand pull, cross-functional co-operation, top management support, existence of a champion, good planning and execution with a strong project manager, and the use of a well-defined process with formal measures. Radically new NPD projects require less structure and more exploration than incremental projects. This article examines whether such general 'best practices' are directly applicable to a specific company. We study 90 NPD projects across many different business units in a large diversified European technology manufacturer. We find that the market positioning of new products depends more on the specific portfolio needs of our host company than on general principles of riskiness. In addition, we identify three predominant NPD process approaches in the company, but success differences among them are 'muddled' by the non-targeted way they are used. We conclude that there is no 'best practice' NPD process. Rather, a company should develop a customized NPD project portfolio and a corresponding mixture of processes, which together meet its strategic innovation needs. We develop a systematic procedure that can help a company to achieve such strategic alignment.

Suggested Citation

  • Loch, Christoph, 2000. "Tailoring product development to strategy: case of a European technology manufacturer," European Management Journal, Elsevier, vol. 18(3), pages 246-258, June.
    • Handle: RePEc:eee:eurman:v:18:y:2000:i:3:p:246-258
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    Citations

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    Cited by:

    1. Xue Wang, 2018. "The Effect Of Inbound Open Innovation On Firm Performance In Japanese Manufacturing Firms: Comparative Study Between Research Centre And Business Unit," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 22(07), pages 1-35, October.
    2. Rohrbeck, Rene & Arnold, Heinrich M., 2006. "Making university-industry collaboration work - a case study on the Deutsche Telekom Laboratories contrasted with findings in literature," MPRA Paper 5470, University Library of Munich, Germany.
    3. Wang, Xinyi & Zeng, Deming & Dai, Haiwen & Zhu, You, 2020. "Making the right business decision: Forecasting the binary NPD strategy in Chinese automotive industry with machine learning methods," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    4. Andries, Petra & Hünermund, Paul, 2020. "Firm-level effects of staged investments in innovation: The moderating role of resource availability," Research Policy, Elsevier, vol. 49(7).
    5. Andries, Petra & Hünermund, Paul, 2014. "Staging innovation projects: (when) does it pay off?," ZEW Discussion Papers 14-091, ZEW - Leibniz Centre for European Economic Research.
    6. Raul O. Chao & Stylianos Kavadias, 2008. "A Theoretical Framework for Managing the New Product Development Portfolio: When and How to Use Strategic Buckets," Management Science, INFORMS, vol. 54(5), pages 907-921, May.

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