Impact of New Product Development (NPD) Proficiency and NPD Entry Strategies on Product Quality and Risk

19 Pages Posted: 27 Oct 2008

See all articles by Murray R. Millson

Murray R. Millson

California State University - School of Business

David Wilemon

Syracuse University - Whitman School of Management

Abstract

This research explores the variation of new product quality and risk associated with New Product Development (NPD) entry strategies (e.g. in-house developments and joint ventures). Our first two research questions examine the quality of new products and the variation of risk across five NPD entry strategies. Our third and fourth research questions investigate the association of the proficiency with which NPD technical activities are performed with new product quality and the risk involved in developing new products. Our final two research questions explore whether the type of NPD entry strategy mediates the association between the proficiency with which NPD technical activities are performed and the quality and risk associated with the development of new products. Our study focuses on new products developed by three major industries, namely medical devices, electrical equipment, and heavy construction equipment. Our research suggests that there is no difference in the quality or the risk associated with the development of new products across NPD entry strategies. We also found that new product quality was associated with the proficient performance of many NPD technical activities whereas risk was associated with the proficient performance of fewer NPD technical activities. We found that choice of NPD entry strategy mediates the relationship between new product quality and NPD technical activity proficiency. Unlike product quality, NPD entry strategy selection appears to mediate NPD risk minimally. Our study contributes to NPD knowledge and managerial decision making by pointing out that the technical activities performed during the early stages of the NPD process are important to the attainment of a quality product and positively, not negatively, associated with perceived NPD risk. Additionally, our study extends knowledge of the association between proficiently performed NPD technical activities and the resultant product quality and perceived risk felt when individual NPD entry strategies are implemented.

Suggested Citation

Millson, Murray R. and Wilemon, David, Impact of New Product Development (NPD) Proficiency and NPD Entry Strategies on Product Quality and Risk. R&D Management, Vol. 38, Issue 5, pp. 491-509, November 2008. Available at SSRN: https://ssrn.com/abstract=1288314 or http://dx.doi.org/10.1111/j.1467-9310.2008.00534.x

Murray R. Millson (Contact Author)

California State University - School of Business ( email )

5151 State University Dr
Los Angeles, CA 90032
United States

David Wilemon

Syracuse University - Whitman School of Management ( email )

Innovation Management Research Center
900 S. Crouse Avenue
Syracuse, NY 13244-2130
United States

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