New Product Development Process Execution, Integration Mechanisms, Capabilities, and Outcomes: Evidence from Chinese High-Technology Ventures
Successful ‘New Product Development’ (NPD) processes are particularly important for emerging markets such as China. Previous studies have mainly advocated the importance of NPD process ‘planning’ from ‘developed’ firms. Yet ‘emerging’ market firms’ use of process ‘execution’ would appear to challenge the view from ‘developed’ firms that a proficient ‘frontend’ planning phase contributes most to project success.
A “world-leading” stance on nurturing “new technology ventures”
China has a “world-leading” stance on nurturing “New Technology Ventures”, achieved via several high-technology industrial parks that encourage Western firms to establish technology ventures in these locations. Though characteristics of “New Product Development (NPD)” processes have received attention in the existing business and management studies, a limited number of studies have devoted attention to “knowledge management” within NPD processes.
The Chinese model of “New Product Development”
Industry commentators and policymakers suggest that the success of “Chinese High-Technology Ventures” is associated with their “innovative” use of “NPD staged processes“. Indeed, a particular issue for Chinese firms concerns marketing’s involvement in NPD processes, which often focuses on acquiring “technical skills and resources“.
“High-technology Chinese ventures” are advised to place extra emphasis on their “commercialization activities“, as these firms face acute environmental uncertainties due to the fast-changing political and economic conditions. Our results evidence that Chinese firms pursue “models” of “efficient NPD” which serve to elevate the role of “commercialization“. Unlike “developed” market firms with the Western need to research and perfect a new product “idea” before going to market, Chinese firm managers are content to flexibly use the “NPD cycle” to iterate a product’s development via “commercialization“. Our study highlights the key role of “commercialization capability” in NPD process “execution” for “emerging market firms” in China.
“Knowledge” and “capabilities” required for successful NPD in China?
Our study seeks to gain insights into how “different” capabilities (i.e. “marketing–technical integration“, “new product implementation capability” and “penetration pricing capability“) condition NPD process “execution” and its outcomes among emerging market firms in high-technology settings. We found that “Chinese technology firms” are adept at pushing a new product into the market and thereafter adapting and improving it using “new knowledge” created in “commercialization” activities.
Further, our results show that Chinese high-technology ventures can derive advantages from NPD staged processes which efficiently integrate “market knowledge” for “process execution” through product “development and testing” and “commercialization” capabilities. We demonstrate that such firms utilize “NPD integration mechanisms” as part of their “process execution” strategies to generate product “competitive” advantage. In high-growth emerging markets, firms are required to be adept at the transition of their “market” knowledge resources. Moreover, we reveal that the way “market knowledge” is “created” and “integrated” through NPD “execution and integration mechanisms” is all important.
Methodology
We drew up a random sample of “750 High-Technology Electronic Information Firms” based in Shanghai. Prior to hypothesis testing, we used “Confirmatory Factor Analysis (CFA)” to test the validity of the measures. The measurement model and subsequent structural model were fitted using the “maximum likelihood estimation” procedure with the raw data as input in “STATA“.
We assessed the relationships of hypothesized model using “Structural Equation Modelling (SEM)“. To test “moderation effects” of the NPD integration mechanisms and pricing capability, estimation involves specifying “interaction latent variables” in a structural equation model using products of indicants.
Finally, we conducted supplementary analyses to examine the “longitudinal effect” of the proposed model and controlled and assessed “Common Method Bias (CMB)“.
Applications and beneficiaries
Our study highlights the key role of “commercialization capability” in NPD staged processes for emerging market firms in China. From a managerial standpoint, we direct managers’ attention to the primacy of NPD “process execution capabilities”generally, and “commercialization capability”specifically. Successful new product managers are those who have achieved best practice standards in “new product launches”. Importantly, our study furnishes managers with specific insights into how to cope with “technical”(i.e. R&D and manufacturing) and “marketing”disunity withing NPD “process execution”.
Reference to the research
Robson, M.J., Chuang, F.-M., Morgan, R.E., Bıçakcıoğlu-Peynirci, N. and Di Benedetto, C.A. (2023), New Product Development Process Execution, Integration Mechanisms, Capabilities and Outcomes: Evidence from Chinese High-Technology Ventures. British Journal of Management, Volume 34, Issue 4, October 2023, pp. 2036-2056
