2.3. New product development performance
Song and Parry (1997) adopted four indexes to measure the comparative success level for a manufacturer’s new product as: (1) overall profit; (2) new product sales compared with competitors; (3) profit rate for new product compared with competitors; (4) new product success compared with the expected profit. Calantone et al. (1995) proposed new product development activities for enterprise performance and strategy. He utilized the ratio of investment (ROI) and the investment growth rate (GROI), ratio of sales (ROS) and sales growth rate (GROS) and market share and growth rate as performance measurement indexes. Cooper, 1984a and Cooper, 1984b chose three aspects from eight indexes to measure new product development performance: (1) overall performance of new product; (2) success rate of new product development; (3) effect of new product on a company. Hopkins (1981) took five indexes to measure new product development performance: (1) finance evaluation; (2) objectives evaluation; (3) rate for new product accounted for in the gross sales amount; (4) percentage of successful new product development; (5) overall subjective satisfaction scores for new product development. Dwyer and Mellor (1991) investigated the relationship between the implementation integrity for new product development activities and new product development performance from 96 manufacturers. In their research four subjective-measurement indexes were used to evaluate if new product development was successful. The four indexes were: (1) assessment of the overall success or failure; (2) profit level; (3) sales goal; (4) opportunities that could be brought by the new product in the future. Sixotte and Langley (2000) thought that cross-department horizontal communication and information exchanges could greatly decrease the uncertainty in new product development and improve new product development performance. This research adopted three indexes to measure new product development performance: (1) new product life cycle; (2) new product sales and profits; (3) time to market for new product.
2.4. Relation between KM method and NPD strategy
Clark and Wheelwright (1993) pointed out that a new product development strategy is an information processing procedure, i.e. good knowledge management arrangement. The intention to engage in new product development is to decrease the uncertainty in the course of new product development. Clark et al. (1987) thought that knowledge management integration is dependent on a wider and trans-functional integration capability. The new product development strategy is dependent on wider knowledge integration to achieve its goals. Clark and Wheelwright (1993) concluded in their studies that companies would obtain better new product development performance if they could respond to any fluctuation in the outside environment faster than their competitors. Good strategy flexibility within the enterprise becomes a catalyst for generating a new product R&D concept. Therefore, the effectiveness of the knowledge management method plays an important role in new product development strategy.
2.5. Relation between KM method and NPD performance
Teece and Pisano (1994) thought that only companies that pursued the fastest product innovation and possessed the management capability to integrate and allocate internal and external resources would have success in a global competition environment. Therefore, integrating internal and external knowledge in the organization and maintaining good management will lead to a positive effect on new product development performance. Grant (1996) thought that knowledge management could be regarded as knowledge integration. Clark and Wheelwright (1993) divided knowledge integration into interior and exterior parts. The combination of these two could increase new product performance. Teece et al. (1997) placed emphasis on the importance of knowledge integration and thought that business owners must effectively acquire and integrate external knowledge to develop innovative ideas. Moorman (1995) pointed out that an enterprise with a good capability to absorb market information would reduce market uncertainty (namely external knowledge management), and obtain comparatively high success opportunities. Enterprises with good knowledge management methods will have successful new product development performance.
2.6. The relation between NPD strategy and NPD performance
Kotabe (1990) concluded in his research that the product innovation level has a direct relation to performance, i.e. the higher the product innovation level, the better performance. Davis (1988) investigated three new product development cases with seven activities proposed by Booz, Allen and Hamilton, among which two are failed and one succeeded. Both the two failed indicates that omitting the important developing activities, product test, will lead to failure. While another succeeded case for new product in a hotel is mainly due to implementation of product development activities step by step. Cooper, 1984a and Cooper, 1984b investigated 58 innovative industrial products from 30 different industrial companies. He found that in the following seven new product developing activities, the successful cases had complete implementation activities. The failed cases omitted important activities, such as: creation filtration, market research and product prototype tests using customers. Hise et al. (1989) concluded in their studies that a company that performs its operations without a specific procedure or lacking a complete development schedule would decrease its success rate for new product development and entry to market. If a non-dominant company wants to bring a brand new product into a new market, that company must adopt a complete procedure. If that company wants to bring an exiting product into another country, creation generation, conception evaluation and some other procedures could be omitted. Zirger and Maidique (1990) conducted case studies using 23 variables and eight models to compare each success or failure characteristic among 148 electronic products. The results showed that a company with excellent R&D organization would have higher success probability in new product development due to the completeness of the development activities. Wheelwright and Clark (1992) pointed out that if a company wanted to achieve integration of all upstream (i.e. design) and downstream (i.e. manufacturing) problems, all design activities must include the following three capabilities: (1) possessing a keen perception in solving downstream problems; (2) zero-error design; (3) rapid problem solving. These design capabilities rely deeply upon the complete product development activities. Cooper and Kleinschmidt (1991) interviewed higher-level managers from five large companies (i.e. IBM, 3M, Northern Telecom, Emerson Electric) that had implemented new product development procedures. All of the managers from these five companies agreed on the positive effect of implementing new product development procedures. For example, improving communications within team, shortening development and rework time, increasing the success rate for a new product.
2.3. New product development performance
Song and Parry (1997) adopted four indexes to measure the comparative success level for a manufacturer’s new product as: (1) overall profit; (2) new product sales compared with competitors; (3) profit rate for new product compared with competitors; (4) new product success compared with the expected profit. Calantone et al. (1995) proposed new product development activities for enterprise performance and strategy. He utilized the ratio of investment (ROI) and the investment growth rate (GROI), ratio of sales (ROS) and sales growth rate (GROS) and market share and growth rate as performance measurement indexes. Cooper, 1984a and Cooper, 1984b chose three aspects from eight indexes to measure new product development performance: (1) overall performance of new product; (2) success rate of new product development; (3) effect of new product on a company. Hopkins (1981) took five indexes to measure new product development performance: (1) finance evaluation; (2) objectives evaluation; (3) rate for new product accounted for in the gross sales amount; (4) percentage of successful new product development; (5) overall subjective satisfaction scores for new product development. Dwyer and Mellor (1991) investigated the relationship between the implementation integrity for new product development activities and new product development performance from 96 manufacturers. In their research four subjective-measurement indexes were used to evaluate if new product development was successful. The four indexes were: (1) assessment of the overall success or failure; (2) profit level; (3) sales goal; (4) opportunities that could be brought by the new product in the future. Sixotte and Langley (2000) thought that cross-department horizontal communication and information exchanges could greatly decrease the uncertainty in new product development and improve new product development performance. This research adopted three indexes to measure new product development performance: (1) new product life cycle; (2) new product sales and profits; (3) time to market for new product.
2.4. Relation between KM method and NPD strategy
Clark and Wheelwright (1993) pointed out that a new product development strategy is an information processing procedure, i.e. good knowledge management arrangement. The intention to engage in new product development is to decrease the uncertainty in the course of new product development. Clark et al. (1987) thought that knowledge management integration is dependent on a wider and trans-functional integration capability. The new product development strategy is dependent on wider knowledge integration to achieve its goals. Clark and Wheelwright (1993) concluded in their studies that companies would obtain better new product development performance if they could respond to any fluctuation in the outside environment faster than their competitors. Good strategy flexibility within the enterprise becomes a catalyst for generating a new product R&D concept. Therefore, the effectiveness of the knowledge management method plays an important role in new product development strategy.
2.5. Relation between KM method and NPD performance
Teece and Pisano (1994) thought that only companies that pursued the fastest product innovation and possessed the management capability to integrate and allocate internal and external resources would have success in a global competition environment. Therefore, integrating internal and external knowledge in the organization and maintaining good management will lead to a positive effect on new product development performance. Grant (1996) thought that knowledge management could be regarded as knowledge integration. Clark and Wheelwright (1993) divided knowledge integration into interior and exterior parts. The combination of these two could increase new product performance. Teece et al. (1997) placed emphasis on the importance of knowledge integration and thought that business owners must effectively acquire and integrate external knowledge to develop innovative ideas. Moorman (1995) pointed out that an enterprise with a good capability to absorb market information would reduce market uncertainty (namely external knowledge management), and obtain comparatively high success opportunities. Enterprises with good knowledge management methods will have successful new product development performance.
2.6. The relation between NPD strategy and NPD performance
Kotabe (1990) concluded in his research that the product innovation level has a direct relation to performance, i.e. the higher the product innovation level, the better performance. Davis (1988) investigated three new product development cases with seven activities proposed by Booz, Allen and Hamilton, among which two are failed and one succeeded. Both the two failed indicates that omitting the important developing activities, product test, will lead to failure. While another succeeded case for new product in a hotel is mainly due to implementation of product development activities step by step. Cooper, 1984a and Cooper, 1984b investigated 58 innovative industrial products from 30 different industrial companies. He found that in the following seven new product developing activities, the successful cases had complete implementation activities. The failed cases omitted important activities, such as: creation filtration, market research and product prototype tests using customers. Hise et al. (1989) concluded in their studies that a company that performs its operations without a specific procedure or lacking a complete development schedule would decrease its success rate for new product development and entry to market. If a non-dominant company wants to bring a brand new product into a new market, that company must adopt a complete procedure. If that company wants to bring an exiting product into another country, creation generation, conception evaluation and some other procedures could be omitted. Zirger and Maidique (1990) conducted case studies using 23 variables and eight models to compare each success or failure characteristic among 148 electronic products. The results showed that a company with excellent R&D organization would have higher success probability in new product development due to the completeness of the development activities. Wheelwright and Clark (1992) pointed out that if a company wanted to achieve integration of all upstream (i.e. design) and downstream (i.e. manufacturing) problems, all design activities must include the following three capabilities: (1) possessing a keen perception in solving downstream problems; (2) zero-error design; (3) rapid problem solving. These design capabilities rely deeply upon the complete product development activities. Cooper and Kleinschmidt (1991) interviewed higher-level managers from five large companies (i.e. IBM, 3M, Northern Telecom, Emerson Electric) that had implemented new product development procedures. All of the managers from these five companies agreed on the positive effect of implementing new product development procedures. For example, improving communications within team, shortening development and rework time, increasing the success rate for a new product.
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