New Product Activities and Performance: The Moderating Role of Environmental Hostility

Journal of Product Innovation Management, Vol. 14, No. 3, pp. 179-189, May 1997

11 Pages Posted: 28 Mar 2006

See all articles by Roger Calantone

Roger Calantone

Michigan State University

Jeffrey Schmidt

University of Oklahoma

Anthony Di Benedetto

Temple University

Abstract

In the race to bring new products to market, a company may be tempted to cut corners in the new product development (NPD) process. And a hostile environment - that is, one marked by intense competition and rapid technological change - only heightens the pressure to reduce NPD cycle time. However, hasty completion of the NPD process may actually jeopardize a product's chances for success.

In a study of Fortune 500 manufacturers of industrial products, Roger J. Calantone, Jeffrey B. Schmidt, and C. Anthony Di Benedetto explore the relationships among new product success rates, proficiency in the execution of NPD activities, and the perceived level of hostility in the competitve environment. Their study examines how proficiency in NPD activities affects the odds of success for industrial new products. Adding environmental hostility to the mix, they also investigate whether the perceived level of hostility in the competitive environment affects the relationship between NPD proficiency and success. In this way, they provide insight into the factors managers must consider when attempting to accelerate cycle time in a hostile competitive environment.

The respondents to their survey - 142 senior managers involved in NPD or product innovation rated environmental hostility in terms of the extent to which the firm perceives its industry as safe, rich in investment opportunity, and controllable. To assess NPD proficiency, respondents were asked about their firms' performance in predevelopment marketing and technical activities, development marketing and technical activities, and financial analysis. Respondents assessed new product performance in terms of product profitability.

As expected, the responses indicate that proficiency in the performance of NPD activities increases the likelihood of new product success. Proficiency in development marketing activities produced the largest increase in likelihood of success - nearly 25 percent over that of projects in which respondents rated performance of these activities at any level below most proficient. More importantly, the responses indicate that a hostile competitive environment increases the impact of NPD proficiency. In other words, by improving performance of key NPD activities under hostile environmental conditions, a firm can greatly increase the likelihood of success for a new industrial product. Rather than simply cut corners in the NPD process, a firm faced with a hostile environment must strike a balance between speed and quality of execution.

Suggested Citation

Calantone, Roger and Schmidt, Jeffrey and Di Benedetto, Anthony, New Product Activities and Performance: The Moderating Role of Environmental Hostility. Journal of Product Innovation Management, Vol. 14, No. 3, pp. 179-189, May 1997. Available at SSRN: https://ssrn.com/abstract=893427

Roger Calantone

Michigan State University ( email )

Agriculture Hall
East Lansing, MI 48824-1122
United States

Jeffrey Schmidt

University of Oklahoma ( email )

307 W Brooks
Norman, OK 73019
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
207
Abstract Views
1,768
rank
158,164
PlumX Metrics