Customer and Supplier Involvement in Design: The Moderating Role of Incremental and Radical Innovation Capability

Abstract

More and more firms are leveraging design as a resource to gain the upper hand in today's competitive business market. To this end, this study draws on the resource‐based view (RBV) of the firm to examine the relationship between customer and supplier involvement in the design process and new product performance. The research also extends the RBV to a contingency lens by introducing product innovation capability (incremental and radical) as a moderator to draw the boundary conditions of the impact of customer/supplier involvement in design on new product performance. Using data collected from Canadian high‐tech companies, the findings provide strong support for the hypotheses in that customer involvement in design helps new product performance under high incremental innovation capability but harms new product performance under high radical innovation capability. In contrast, supplier involvement in design was beneficial to new product performance under both high incremental and radical innovation capability. The managerial implications for the role of design under different innovation capabilities are discussed.

Supply chain integration configurations: process structure and product newness

“…specialised equipment. Given the uncertainty often associated with entirely new products (Menguc et al 2013) there is close monitoring of the development of these components:…”

“…Although systematic collaboration with customers is often advocated as good practice (Cooper and Kleinschmidt 1987) and has been present in customised configurations, in ramp-up the views of only a few customers are sought during the early phases of the product development process (Griffin and Hauser 1996). In line with the findings of Menguc et al (2013), who argue that customers' integration in radically new products is minimal, customers are invited to sales visits after the products have been launched. Feedback is collected to address any initial technical problems, incrementally improve their performance, and develop marketing strategies.…”

“…Customers, who are already familiar with the products, request specific and detailed modifications, which lead mainly to incremental improvements (Menguc et al 2013). Large scale feedback techniques, such as focus groups and surveys, are used to systematically collect and analyse customers'…”

Supply chain of innovation and new product development

“…Conversely, customer integration has been found to be related to customer satisfaction, both directly (Homburg and Stock, 2004) and indirectly, through its relationship to product development and innovation (Koufteros et al, 2005;Song and Benedetto 2008). The positive effect of collaboration practices, as well as collaborative competences, on the NPD process has thus been largely demonstrated in the supply chain management literature on NPD (Mishra and Shah, 2009) and has been justified in terms of the value creation and knowledge sharing arising from the relational nature of these bilateral agreements (Menguc et al, 2014).…”

Servitising manufacturers: the impact of service complexity and contractual and relational capabilities

“…As such, it refers to the ability to deploy resources or transfer input into desirable outputs (Menguc et al, 2014). In this context, resources refer to both tangible entities such as raw materials or equipment and intangible entities such as tacit knowledge which can be embodied by knowledge workers such as service engineers (Henard and McFadyen, 2012).…”