The influence of business strategy on new product activity: The role of market orientation

Abstract

In this paper we propose that business strategy influences new product activity both directly and indirectly via its influence on market orientation. Accordingly, we develop a framework linking firms' relative emphasis on cost leadership, product differentiation and focus strategies to firms' customer and competitor orientation as well as their new product development and introduction activity. We use this framework to develop a simultaneous equations model that is tested on survey data from 175 Dutch firms of varying size and across different industries in the manufacturing sector. The surprising findings are that a greater emphasis on a focus strategy results in a decreased emphasis on customer orientation and that competitor orientation has a negative direct influence on new product activity and an indirect positive effect via customer orientation. We discuss the implications of these findings for theory and practice.

Understanding the role of technology in service innovation: Comparison of three theoretical perspectives

“…Technology: Given that SCFS emphasizes on different positions mostly achieved by introduction of new services, technology allows firms to encourage and facilitate the development and application of new services (Henderson and Venkatraman, 1994) by improving the initial base of knowledge through the integration of system and tacit skills of human resources (Dewett and Jones, 2001), which effectively helping the firm achieve better performance (Frambach et al, 2003). Competitive positioning to pursue SDFS mainly depends on technology which can effectively deliver services to customers.…”

La gestión de la innovación en las empresas vascas. El papel de las herramientas de gestión de la innovación en la eficiencia de la misma y en la de los resultados de innovación.

“…• Para el análisis de la mediación se utilizó la regresión múltiple lineal y la regresión logística siguiendo la propuesta de análisis de Baron y Kenny (Baron and Kenny, 1986), y tal y como lo han hecho otras investigaciones en el ámbito de la innovación empresarial (Song et al, 2008, Khazanchi et al, 2007, Camelo-Ordaz et al, 2005, Richard et al, 2003, Frambach et al, 2003 u otros ámbitos de la investigación en gestión de empresas (Takeuchi et al, 2007). Una alternativa, al objeto de realizar todo en un paso y simplificar así las dificultades asociadas al análisis de la mediación, podría haber sido la utilización de los modelos de ecuaciones estructurales (SEM).…”

“…This approach has already been used in other research in the field of business innovation (Song et al, 2008, Khazanchi et al, 2007, Camelo-Ordaz et al, 2005, Richard et al, 2003, Frambach et al, 2003 as well as in other research areas of business management (Takeuchi et al, 2007). Nevertheless, an alternative to that methodological approach is the use of Structural Equation Modelling (SEM) as a means to doing it all in one step and`, therefore`, simplify the difficulties associated with the mediating analysis.…”

Drivers of the Implementation of Strategies in Latin American Firms’ Export Performance

“…More specifically, Market Orientation acts as a mediator in the relationship between Cost-Leadership Strategy and Performance: in order to provide value to the customers, firms need to understand how customers acquire and employ the product and then reduce its cost. Similarly, Reactive Market Orientation allows the firm to diminish their marketing budget and decrease the price of the product (Frambach, Prabhu, & Verhallen, 2003;Voola & O'Cass, 2010). Finally, for exporting companies in emerging economies with restrained access to resources, market orientation provides firms with important information about the cost structure of their competitors.…”