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Managing menu innovation in a saturated market: An empirical evidence from the Chain restaurants in Malaysia
Abstract
This paper presents the empirical results of a recently concluded research study about managing menu innovation in a consumer market that has reached to its saturation level. Such market condition resulting in increased competition and, therefore, a need for increased innovation is essential. In this study, an investigation was carried in substantiating the effect of market saturation toward the relationship between innovation orientations and new menu innovation process. The region of Klang Valley was chosen as the study setting for its dynamic and matured consumer foodservice market. In this investigation, the theoretical conceptualization and the empirical validation of the proposed menu innovation process as a second-order hierarchical model along with the moderating variable of market saturation as first-order constructs were first advanced using both Statistical Package for Social Science (SPSS version 19) and partial least squares. Empirically, the measurement and structural models of this study confirmed adequate estimations based on partial least squares path modeling parameters. In line with the strength of partial least squares to explain complex relationships, the use of path modeling has made it possible to advance the theoretical contribution to this study. The results show that the moderating effect of market saturation on the link between the exogenous and endogenous variables found to have a medium effect size (f2 = 0.289) and significant at ρ < 0.05). The findings point to managerial challenges in shaping competition as evidence of radical innovations is still being pursued, although slightly weaken. This study, apart from its contribution to the model development of menu innovation process, has meaningful implications for restaurateurs to stay afloat in such a market condition.
... Menu innovation also influences customers' dining experiences and their retention since menu layouts may result in positive dining experiences and feedback (Ozdemir & Caliskan, 2014). Therefore, a menu should be taken seriously in the menu designing process to make it unique and attractive for customers (Mifli, Hashim & Zainal, 2017). Besides, an understandable menu with colorful pictures is essential and recommended to clarify that the products and services provided achieve customer's targets and expectations during their visits. ...
... Besides, an understandable menu with colorful pictures is essential and recommended to clarify that the products and services provided achieve customer's targets and expectations during their visits. Therefore, creating a creative design and continuously updating the current information of the menu are examples of menu innovation processes (Mifli et al., 2017). ...
Marrybrown is a Malaysian brand that develops steadily in Halal fast-food chains, which deliver great value products and exceptional quality service. Marrybrown has utilized its competitive advantages and successfully sustained itself among the competitors in the same market. This study investigates the factors influencing the customer dining experience and retention at Marrybrown in Malaysia. The research method is an online survey and analyzed using V-ONE. The findings indicated that food quality, location preference, menu innovation, restaurant environment, and service quality are important variables that affect the customer dining experience and customer retention at Marrybrown located in Malaysia. The findings provide suggestions for future research and improvement of the services provided by Marrybrown located in Malaysia.
... Menu innovation also influences customers' dining experiences and their retention since menu layouts may result in positive dining experiences and feedback (Ozdemir & Caliskan, 2014). Therefore, a menu should be taken seriously in the menu designing process to make it unique and attractive for customers (Mifli, Hashim & Zainal, 2017). Besides, an understandable menu with colorful pictures is essential and recommended to clarify that the products and services provided achieve customer's targets and expectations during their visits. ...
... Besides, an understandable menu with colorful pictures is essential and recommended to clarify that the products and services provided achieve customer's targets and expectations during their visits. Therefore, creating a creative design and continuously updating the current information of the menu are examples of menu innovation processes (Mifli et al., 2017). ...
Marrybrown is a Malaysian brand that develops steadily in Halal fast-food chains, which deliver great value products and exceptional quality service. Marrybrown has utilized its competitive advantages and successfully sustained itself among the competitors in the same market. This study investigates the factors influencing the customer dining experience and retention at Marrybrown in Malaysia. The research method is an online survey and analyzed using V-ONE. The findings indicated that food quality, location preference, menu innovation, restaurant environment, and service quality are important variables that affect the customer dining experience and customer retention at Marrybrown located in Malaysia. The findings provide suggestions for future research and improvement of the services provided by Marrybrown located in Malaysia.
... Fourth, adopt products from outside the company without making significant changes. (Mifli et al., 2017). Customer engagement and menu innovation are intricately intertwined. ...
Using data from Telkom University Bandung students, this study seeks to determine the relationship between menu innovation, packaging innovation, experience innovation, and consumer engagement and brand evangelism. Utilizing Structural Equation Modeling (SEM) with the Partial Least Squares (PLS) method, the research model is constructed. The findings of the study indicate that brand evangelism can be impacted by consumer engagement, which is reciprocally influenced by multidimensional innovation. The relationship between brand evangelism, menu innovation, packaging innovation, and experience innovation is mediated by customer engagement. This study possesses numerous ramifications for organizations seeking to cultivate brand evangelism. Organizations must persist in their efforts to innovate menus, merchandising, and deliver enhanced consumer experiences
... When looking at product innovation specifically, its implementation is driven by solid and diversified partnerships with suppliers, improving the performance of independent restaurants (Cho et al., 2018). It is worth noting that the process of menu innovation is propelled by market saturation (Mifli et al., 2017). ...
The objective was to analyse the innovation influenced by transformational leadership in restaurant industry performance. The online questionnaire was applied via Amazon Mechanical Turk. Data collection reached 254 restaurant sector professionals, and their responses were analysed using descriptive statistics, correlation, and multiple regression. The results indicated that the innovation dimensions (menu, experiential, promotion, and technology) correlate positively and highly with transformational leadership. Innovations' impact and predictive power on restaurant performance were assessed, with leadership level as a weighting. The innovations related to the menu have the highest positive impact, followed by the innovations in promotion and experience. However, the innovation in technology had no significant impact. The result of the study provides theoretical and empirical contributions to the restaurant industry, generating propositions of innovative actions and highlighting the importance of transformational leadership. In the end, innovation is a critical part of any strategy to strengthen competitiveness and must be actively managed by leadership, stimulating the generation of new ideas and their conversion into marketable solutions.
https://www.tmstudies.net/index.php/ectms/article/view/1941
... Corresponding to rapid changes in Gen Z customers' preferences, expectations, and lifestyles, innovative menus help restaurants respond to gastronomic trends and create greater demand (Bencsik et al., 2019;Gagić, 2016;Mifli et al., 2017). Following the cue utilization theory (Olsen, 1972), perceived menu innovativeness reflects the trackable enduring capability and efforts of food providers to meet Gen Z customers' expectations (Kunz et al., 2011). ...
Purpose
This study aims to investigate the impacts of Generation Z (Gen Z) domestic food tourists’ perceived restaurant innovativeness on destination cognitive food image and examine the impacts of destination cognitive food image on destination brand image and tourists’ revisit intention.
Design/methodology/approach
Data were collected through an online survey, and 337 Gen Z domestic food tourists in Guangzhou participated. Partial least squares structural equation modeling was used for the data analysis.
Findings
This study found that tourists’ perceptions of restaurant menu, technology-based service and experiential innovativeness played essential roles in enhancing destination cognitive food image. In addition, the destination cognitive food image strengthened the destination brand image and increased tourists’ revisit intentions for the future.
Practical implications
The destination cognitive food image perceived by Gen Z domestic food tourists is affected by the restaurant menu, technology-based service and experiential innovativeness. To build a solid destination food image, restaurant operators and decision-makers should prioritize the allocation of resources to develop their innovation capacity. This study also suggests a path of food tourism destination branding from stakeholders’ perspectives and encourages collaboration with stakeholders. Enhanced food tourism destination competitiveness toward the young tourists’ market will generate an overall win for stakeholders
Originality/value
Food providers’ innovativeness, an important factor attracting young tourists’ attention, has been neglected in the discussion of the food tourism experience. This study fills the research gap, investigates the importance of restaurant innovativeness in building food tourism destination competitiveness and provides valuable suggestions to destination restaurant operators and decision-makers.
... Due to the replicability of dishes, restaurants must constantly innovate their products so as to differentiate themselves from those of their competitors (Vila Enz and Costa 2012). In the gastronomy sector, product innovation involves the process of producing food (back of house innovation), as well as the outcome of it (front of house innovation) (Mifli, Hashim, and Zainal 2015). This usually includes changes in cooking techniques (e.g., molecular cuisine and cuisine fusion), cooking processes (e.g., vacuum processes), menu items (e.g., rescue of traditional recipes and offers of amuse-bouches), product quality (e.g., sensorial experience of taste, texture, and color), dish design (e.g., aesthetic pleasure), and use of ingredients (e.g., healthy, organic, fresh, local, and seasonal products) (Mallapragada and Srinivasan 2017;Delgado Cruz et al. 2016;Gagić 2016). ...
... Theoretically, the fundamental assertion of EO is a reflection of the firms" managerial orientations that fall either one or a combination of these domains: proactive, innovative and risk-takers [2][3][4][5][6]. It is a salient decision-making process that is carried out at the first stage of product innovation process called innovation generation [7][8][9][10][11]. ...
Managing product innovations that hold future success in today’s competitive and dynamic global markets reflects on the firm’s domains of entrepreneurship man oeuvres. This research diagnoses the entrepreneurial spirits of restaurateurs in Malaysia by examining their entrepreneurial orientations (EOs) when engaging into new product innovation. The results of the Exploratory Factor Analysis (EFA) indicated that ‘the spirit of risk-taking’- one of the nine-domain of EOs that were based upon in this study (Salavou and Lioukas, 2003) – appeared to be unfounded. The eight-domain of EOs was then structured into two-dimensional construct model, and subsequently, tested of its model fit indexes using a covariance-based structural equation modelling (AMOS). The implication of these findings is discussed along with the limitations and future direction of this study.
It has been more than 20 years since the inception of Cunha and Gomez’s (2003) anthology of product innovation models and little is known empirically as to what extent their synthesising works carry such validation. Hence, we extend further this phenomenon of interest by engaging two opposite chained restaurants, namely, a renowned and well-established international Cafes/Bar restaurant and a local full-service restaurant (FSR) in Malaysia. The aim of our study is to ascertain how these two restaurant chains conduct their product innovation with a research objective is to study the process-based of their new product development (NPD). We believe that the findings of this study will shed some lights as to whether those characteristics of Cunha and Gomez’s (2003) product innovation models, namely flexible, integrative, and improvisational, have discreetly evolved in reality.
Purpose
Using social capital theory, this study aims to investigate internal social capital (ISC) and external social capital (ESC) as determinants of knowledge sharing intention (KSI) and new product development (NPD) in high-end restaurants.
Design/methodology/approach
A theoretical model is developed and tested using data collected from 523 respondents (owners/proprietors, partners and managers) from high-end restaurants in Karnataka, India. Partial least square structural equation modeling is used to analyze the data.
Findings
The results suggest that ISC has a significant and positive influence on ESC. This highlights the important role of ISC in building ESC. While ISC has a positive relationship with KSI, ESC has no influence on KSI. KSI has a positive effect on NPD.
Practical implications
Restaurant managers and owners should invest time and resources in building ISC by nurturing relationships with employees and partners. Encouraging and rewarding collaborative behaviors internally will facilitate the development of external relationships. Results also suggest the existence of an optimum level of knowledge sharing with external partners in restaurants.
Originality/value
To the best of the authors’ knowledge, this is the first study to examine the relationship between ISC and ESC, and test the effects of both KSI and NPD in high-end restaurants.
It is merely evident that innovation is more in the ascendant not only in the practical field but also in theory. However, although innovation seems to be entirely discussed within different business fields, tourism -due to its “service” and “manpower” based nature-, is considered to be one of the relatively stepwise sectors. Thus, this study aims to review 235 articles indexed by SSCI, SCI, SCI-E, ESCI and SCOPUS between 1900-2019 in the context of tourism-innovation relationship. In this review, these articles are grouped under the five themes of Schumpeter (1934) as product innovation, process innovation, market innovation, input innovation and organizational innovation. Among these studies, while process innovation was found to be the most studied subject, product and service innovation was found to be the least studied subject. The most frequently used keyword was found to be innovation itself. Besides it was seen that sustainability in process innovation, perceptions of employees and managers in organizational innovation, business performance and customer satisfaction in service innovation, product development and business performance in product innovation are the most frequently used keywords all through the entire tourism literature. These findings highlight that innovation in tourism research is developing as it does in the manufacturing industry. This research might be considered as not only an opportunity for contemporary innovation executives to follow up the developments in the theory and update their practices in the sector but also an inspiration for the theorists to discover the gaps and the relatively disregarded niche areas and contribute to the future researches.
Provides a nontechnical introduction to the partial least squares (PLS) approach. As a logical base for comparison, the PLS approach for structural path estimation is contrasted to the covariance-based approach. In so doing, a set of considerations are then provided with the goal of helping the reader understand the conditions under which it might be reasonable or even more appropriate to employ this technique. This chapter builds up from various simple 2 latent variable models to a more complex one. The formal PLS model is provided along with a discussion of the properties of its estimates. An empirical example is provided as a basis for highlighting the various analytic considerations when using PLS and the set of tests that one can employ is assessing the validity of a PLS-based model. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Better new product performance is important for the survival of the firm. Based on a three-dimensional performance space, 110 new products launched from 55 Australian firms are grouped into five performance clusters. Performance groups from ‘Stars’—the winning group to—‘Dogs’—the worst performance group. The five groups could be well explained by the impact constructs. ‘Stars’; did what one expects for winning projects (product advantage, homework, cross-functional team, reasonable risk level, etc.), ‘Dogs’ were identified as doing nearly everything wrong. The Australian results were tested against international findings and concurred fully. Managerial implications are detailed.
This article reports the results of Project NewProd, an extensive investigation into what separates successful from unsuccessful new industrial products. Multivariate methods are used to probe this success/failure question. The dimensions underlying success and failure are identified. The dominant role of product strategy and the need for a strong market orientation clearly are demonstrated.
This article reports the results of Project NewProd, an extensive investigation into what separates successful from unsuccessful new industrial products. Multivariate methods are used to probe this success/failure question. The dimensions underlying success and failure are identified. The dominant role of product strategy and the need for a strong market orientation clearly are demonstrated.
Most methodological fields undertake regular critical reflections to ensure rigorous research and publication practices, and, consequently, acceptance in their domain. Interestingly, relatively little attention has been paid to assessing the use of partial least squares structural equation modeling (PLS-SEM) in marketing researchdespite its increasing popularity in recent years. To fill this gap, we conducted an extensive search in the 30 top ranked marketing journals that allowed us to identify 204 PLS-SEM applications published in a 30-year period (1981 to 2010). A critical analysis of these articles addresses, amongst others, the following key methodological issues: reasons for using PLS-SEM, data and model characteristics, outer and inner model evaluations, and reporting. We also provide an overview of the interdependencies between researchers’ choices, identify potential problem areas, and discuss their implications. On the basis of our findings, we provide comprehensive guidelines to aid researchers in avoiding common pitfalls in PLS-SEM use. This study is important for researchers and practitioners, as PLS-SEM requires several critical choices that, if not made correctly, can lead to improper findings, interpretations, and conclusions.
Purpose
This paper aims to outline the innovation process activities described by quick‐service restaurant (QSR) managers and to compare it with an earlier QSR process model and with those used in other food service settings.
Design/methodology/approach
Six semi‐structured interviews with QSR chain executives in the USA were conducted to better understand the underlying factors and dimensions that describe successful innovation process practices.
Findings
For new QSR menu innovations, the development teams follow a structured approach to reduce the likelihood of failure due to issues such as poor consumer demand or implementation. QSR screen new food innovations approximately five times during the development process. Furthermore, today's QSR innovation process integrates more sophisticated market research technology and a post‐audit is carried out after the new food concept has been launched. In comparison with studies of Michelin‐starred chefs QSR development teams use an approach that is much more explicitly structured as a whole due to the larger scale roll‐out as well as greater cross‐functional and regional differences to consider in the QSR setting.
Research limitations/implications
The study was conducted in only one country and on a small sample. Based on an analysis of the findings, the innovation development process of QSR can be broken down into 13 main steps. Compared with earlier hospitality innovation studies, the process in this setting includes multiple screenings for high‐risk innovations, and greater emphasis on operational and training issues.
Originality/value
The study expands the scope of hospitality innovation research and the findings have important implications not only for QSR settings but also for other restaurant segments, and for other hospitality service endeavours.
New product development (NPD) in food-processing industries is often one element which determines whether companies are able to remain competitive in rapidly changing consumer markets. Current research suggests that well-managed NPD should be organized as a continuous learning process. It should have strong information linkage across functions and outside the company to suppliers and customers. We examine NPD in Thailand’s food-processing industry to determine how much it conforms (or not) to current thinking. Generally, only some multinationals and a few larger Thai companies make some attempt to integrate information from a wide knowledge base into their NPD. Even the ones that do it well by Thai standards still have some problems. Existing models of NPD are not very explicit on how information flows should be structured. From our examination of NPD in Thailand, we propose a model based on the continuous learning process in NPD. It suggests how to accumulate and integrate learning (about customers, technology, and NPD itself) across key internal functions (marketing, R&D and manufacturing).
Purpose
This paper aims to compare and contrast the innovation process described by Michelin‐starred chefs with existing theoretical innovation process models.
Design/methodology/approach
Semi structured interviews with Michelin‐starred chefs in Germany were conducted to better understand the underlying factors and dimensions that describe process practices. A sample of 12 Michelin‐starred chefs awarded one, two or the maximum of three stars were interviewed about how they develop new food creations in their restaurants.
Findings
Research results indicated that the development process of Michelin‐starred chefs has similarities and differences to traditional concepts of new product development. Michelin‐starred chefs' innovation processes do not include a business analysis stage and because of the simultaneity of production and consumption and the importance of human factors in service delivery, employees play a more important role in fine dining innovation than in other product innovation situations. Furthermore, Michelin‐starred chefs' innovation processes do not implement an all‐encompassing evaluation system.
Research limitations/implications
The study was conducted in only one country and on a small sample. Based on an analysis of the findings, the innovation development process of Michelin chefs can be broken down into seven main steps.
Originality/value
The present study expands the scope of hospitality innovation research and the findings have not only important implications for high‐end restaurant settings but also other restaurant segments, and other hospitality service endeavors.
In this paper, the authors show that PLS path modeling can be used to assess a hierarchical construct model. They pro-vide guidelines outlining four key steps to construct a hier-1 Carol Saunders was the accepting senior editor for this paper. archical construct model using PLS path modeling. This approach is illustrated empirically using a reflective, fourth-order latent variable model of online experiential value in the context of online book and CD retailing. Moreover, the guidelines for the use of PLS path modeling to estimate parameters in a hierarchical construct model are extended beyond the scope of the empirical illustration. The findings of the empirical illustration are used to discuss the use of covariance-based SEM versus PLS path modeling. The authors conclude with the limitations of their study and suggestions for future research.
This paper focuses on patterns of technological change and on the impact of technological breakthroughs on environmental conditions. Using data from the minicomputer, cement, and airline industries from their births through 1980, we demonstrate that technology evolves through periods of incremental change punctuated by technological break-throughs that either enhance or destroy the competence of firms in an industry. These breakthroughs, or technological discontinuities, significantly increase both environmental uncertainty and munificence. The study shows that while competence-destroying discontinuities are initiated by new firms and are associated with increased environmental turbulence, competence-enhancing discontinuities are initiated by existing firms and are associated with decreased environmental turbulence. These effects decrease over successive discontinuities. Those firms that initiate major technological changes grow more rapidly than other firms.
The authors study the relationship among information processing, marketing decisions, and performance in turbulent markets—i.e., markets in which the time-sensitivity of information is a major factor in decision making. Drawing on both organizational contingency theory and individual behavioral decision research, the authors suggest that successful performance depends on the congruence between the level of marketplace turbulence and the information-processing style and associated decisions adopted. They focus by way of example on the decision processes embodied in formal planning procedures. Using the results from an experiment conducted with a strategic marketing simulation game, they show that “planning” leads both to an underweighting of the time-sensitivity of marketplace information and toward a bias in favor of certain marketing decisions over others—decisions that, in this case, result in inferior performance in turbulent markets when compared with that of decision makers not engaged in formal planning. They discuss the implications of the findings for managerial behavior in turbulent markets.
The literature reflects remarkably little effort to develop a framework for understanding the implementation of the marketing concept. The authors synthesize extant knowledge on the subject and provide a foundation for future research by clarifying the construct's domain, developing research propositions, and constructing an integrating framework that includes antecedents and consequences of a market orientation. They draw on the occasional writings on the subject over the last 35 years in the marketing literature, work in related disciplines, and 62 field interviews with managers in diverse functions and organizations. Managerial implications of this research are discussed.
About the Second Edition: "... a clear and thorough understanding of how the industry as a whole competes, succeeds, and in some instances fails to bring new products to the marketplace.... delivers helpful information in a concise, organized style, bringing together diverse elements of the food industry that are all important for a new product introduction into the marketplace.... [a] should-have reference book for anyone involved in developing new food products working in or with the food industry."
A generalized form of the cross‐validation criterion is applied to the choice and assessment of prediction using the data‐analytic concept of a prescription. The examples used to illustrate the application are drawn from the problem areas of univariate estimation, linear regression and analysis of variance.
This paper develops a framework for analyzing the competitive implications of innovation. The framework is based on the concept of transilience - the capacity of an innovation to influence the established systems of production and marketing. Application of the concept results in a categorization of innovation into four types. Examples from the technical history of the US auto industry are used to illustrate the concepts and their applicability. The analysis shows that the categories of innovation are closely linked to different patterns of evolution and to different managerial environments. Special emphasis is placed on the role of incremental technical change in shaping competition and on the possibilities for a technology based reversal in the process of industrial maturity.
New menu items can help expand a restaurant firm's market share. But these newproducts must fit in with the restaurant's existing menu and with the company's overall goals. Here's a methodical way to make sure new menu items are right for your firm.
Companies involved in new-product development use some or all of the following 15 steps to generate ideas and services: established objectives and strategies for developing new ideas (mission statement), the company's business structure, actual idea generation and screening, concept development, concept testing, business analysis, project authorization, product or service design and testing, process and system design and testing, marketing-program design and testing, personnel training, product or service testing, test-marketing, launch, and post-launch review. This article's four case studies, however, illustrate that firms do not typically need to follow all 15 steps. That is due to a number of factors, including product diversity resulting from the originality of the product or service; the level of legal protection available; the amount of capital investment available; and the maturity of the marketplace.
Industrial classifications were used as a basis for operational definitions of both industrial and organizational task environments. A codification of six environmental dimensions was reduced to three: munificence (capacity), complexity (homogeneity-heterogeneity, concentration-dispersion), and dynamism (stability-instability, turbulence). Interitem and factor analytic techniques were used to explore the viability of these environmental dimensions. Implications of the research for building both descriptive and normative theory about organization-environment relationships are advanced.
Now nearing its 60th printing in English and translated into nineteen languages, Michael E. Porter's Competitive Strategy has transformed the theory, practice, and teaching of business strategy throughout the world. Electrifying in its simplicity -- like all great breakthroughs -- Porter's analysis of industries captures the complexity of industry competition in five underlying forces. Porter introduces one of the most powerful competitive tools yet developed: his three generic strategies -- lowest cost, differentiation, and focus -- which bring structure to the task of strategic positioning. He shows how competitive advantage can be defined in terms of relative cost and relative prices, thus linking it directly to profitability, and presents a whole new perspective on how profit is created and divided. In the almost two decades since publication, Porter's framework for predicting competitor behavior has transformed the way in which companies look at their rivals and has given rise to the new discipline of competitor assessment.
More than a million managers in both large and small companies, investment analysts, consultants, students, and scholars throughout the world have internalized Porter's ideas and applied them to assess industries, understand competitors,, and choose competitive positions. The ideas in the book address the underlying fundamentals of competition in a way that is independent of the specifics of the ways companies go about competing.
Competitive Strategy has filled a void in management thinking. It provides an enduring foundation and grounding point on which all subsequent work can be built. By bringing a disciplined structure to the question of how firms achieve superior profitability, Porter's rich frameworks and deep insights comprise a sophisticated view of competition unsurpassed in the last quarter-century.
Book Description
Publication Date: June 1, 1998 | ISBN-10: 0684841487 | ISBN-13: 978-0684841489 | Edition: 1
Clique Aqui
This article explores the drivers of product development performance in a rapidly changing environment. Effective product developers in turbulent environments, such as Silicon Graphics and NEC, provide a contrast to traditional product development. They exhibit a development process characterized by extreme flexibility and responsiveness. This, in turn, hinges on the capability to gather and rapidly respond to new knowledge about technical and market information as a project evolves. Instead of focusing on execution and implementation, these companies' development process emphasizes the importance of the concept development stage, while keeping the product's specification fluid as late as possible in a project. This ensures the best match between system and component technologies, as well as the maximum flexibility to respond to changes.
Posits that developing breakthroughs is much more costly and risky than introducing simple product line extensions. Therefore, breakthroughs need to be managed differently. After developing a model to manage breakthroughs, generates a series of hypotheses and tests them against the information obtained from 30 major companies. The companies were chosen on the basis of one successful product that lasted over a decade in the marketplace. They were chosen from 143 product-companies and only 30 of the products in question had survived. Provides important information regarding the management of breakthroughs.
Given that the majority of firms are followers of pioneering firms into new, related product markets, managers of almost all firms can benefit from benchmarking their competitive responses to pioneering new product introductions. This paper examines the competitive responses of firms not only in terms of the time until their responding new product introduction, but also in terms of the firms’ preceding stages of competitive response: awareness, interest, and evaluation. For example, how long does – and should – it take a follower firm to become aware of a pioneering new product introduction? A general conceptual framework and basic methodology is proposed for firms to evaluate and benchmark their competitive responses. Follower firm responses to pioneering new low-fat food product introductions in North America are examined and illustrate the opportunity for benchmarking firms’ competitive responses.
The current process for developing new food products is seriously
flawed. Of the 8,077 new food products (stock keeping units or SKUs)
introduced to US retail markets in 1993, only about one-quarter of them
were novel – not simply line extensions. Although there are no published data on successes and failures
of new food products, it is estimated that 80 to 90 per cent of them
fail within one year of introduction. These are just the products that
made the retail cut; consider all the products whose efforts fell short
and retail introduction never took place. This means that only about 200
novel food products introduced in 1993 will make it after their first
year on US retail shelves in 1994. The failure cost to the US food
industry is estimated at $20 billion. This cost results from missed sales targets, lost revenues and
postponed profits in addition to wasted development resources.
Most recent work in the area of new product development has been of
a theoretically prescriptive basis, ignoring, to a large degree, the
current state of affairs in US corporations. The study examines, on a
comparative basis, consumer and business products organizations,
practices being utilized to guide the development process and key
factors influencing the success/failure of the process. Results from an
empirical study reveal that: (1) there is no one best means to structure
the process; (2) top management commitment to and support of the process
is a critical factor; (3) knowledge of markets and customers remains
elusive; and (4) more similarities than differences exist between the
practices undertaken by and the factors influencing success/failure in
consumer versus business products organizations.
In the literature it is proposed that high adaptive capability is associated with high costs and internal inefficiency, despite the potential benefits to be gained from being adaptive. Investigates a set of adaptability variables that have not been previously researched and, therefore, takes an alternative focus on adaptive capability. Identifies two distinct degrees of high and low adaptive capability in an empirical UK study. Suggests that companies with high adaptive capability seemingly perform better than low adapters, despite the implication of high costs and inefficiency. High adapters also seem to have more comprehensive market orientation and decision-making style, although they appear to operate in more turbulent external environments. The results extend the current adaptive capability literature, and directions for further research are proposed.
Increasingly, food companies in today's marketplace have to change to
survive, in response to pressures from competition, technology, and
diversity of consumers. Discusses the increasing requirement for an
effectively managed product process within the food industry, in
response to these conditions. Offers an examination of the process, in
terms of maintaining an acceptable level of consumer satisfaction.
Technological innovations can have Important strategic implications for individual companies and can greatly influence industries as a whole. Yet, not all technological change is strategically beneficial. This article focuses on ways to recognize and exploit the competitive significance of change.
Reviews and synthesizes the literature addressing the concept of strategic orientation and examines the relationship between strategic orientation and export success. Uses survey data from experienced export managers to test the relationship between proactive and reactive strategic orientations and success in exporting empirically. Key dimensions of a proactive strategic orientation are found to be significantly correlated with export success.
There has been a considerable amount of effort and writing devoted to improving the new product development process during the last two decades. Although there have been some surprises in this literature and in reports from the field on how to manage this complex business process, we now have a good view of the state-of-the-art practices that work and do not work to accelerate commercial success of new ventures. We know much less about how firms change their strategies for new product development.
In this article, we report on a study to investigate how companies change the way they originate and develop new products in manufacturing. We made no prior assumptions about what best practices might be for changing the direction of the new product development process, but we reasonably were sure there would be trends in how companies were attempting to create this strategic change. Even though one size does not fit all, there were significant trends in our findings.
We studied eight manufacturing firms using in-depth, open-ended interviews and were surprised to find that most of these companies are beginning to develop products that are new to the firm, industry, and the world (nearly half, or 10 of 21 new product projects), where they had not been eager for radical change in the past. These newer products likely are to be driven by a combination of market and technology forces, with general requirements being directed by internal forces: middle and top management. Results also indicate significantly that being able to marshal resources and capabilities is easier if change is less demanding and less radical, but when middle managers are driving the conversion of general requirements into specifications, resource issues have yet to be resolved. Implications of these findings are discussed for companies aspiring to change the entire process of new product development in their firms based on these significant results.
Advances in causal modeling techniques have made it possible for researchers to simultaneously examine theory and measures. However, researchers must use these new techniques appropriately. In addition to dealing with the methodological concerns associated with more traditional methods of analysis, researchers using causal modeling approaches must understand their underlying assumptions and limitations.Most researchers are well equipped with a basic understanding of LISREL-type models. In contrast, current familiarity with PLS in the strategic management area is low. The current paper reviews four recent studies in the strategic management area which use PLS. The review notes that the technique has been applied inconsistently, and at times inappropriately, and suggests standards for evaluating future PLS applications. Copyright © 1999 John Wiley & Sons, Ltd.
Managers need guidance on how to cope with turbulent environments in order to improve corporate performance. Research on environmental turbulence has suggested that firms adopt a less centralized, more organic structure in dynamic, uncertain environments. Little work has been done specifically, however, on how environmental turbulence affects strategy planning for new product development (NPD). In this article, we specify a baseline model with firm innovativeness, market orientation and top management risk taking as antecedents to NPD speed and corporate strategic planning; these in turn are modeled as antecedents to NPD program (not project) performance. Two conceptualizations of the role of environmental turbulence are examined: (1) that market turbulence and technological turbulence are additional direct antecedents to NPD program performance; and (2) that the baseline model is moderated by turbulence (that is, that the strengths of the paths differ depending on levels of turbulence). A cross-sectional survey methodology including four diverse industries [automotive, electronics, publishing, and manufacturing/research and development (R&D) laboratories] was used to test the hypotheses. The latter conceptualization is supported. In particular, the paths from innovativeness to strategic planning and from risk taking to NPD speed are significantly greater in highly turbulent environments. A set of managerial recommendations and implications are provided. First, managers must recognize the possible improvements in new product performance by actively including NPD personnel in corporate strategic planning and also by involving corporate planners in NPD activities. Second, managers also should recognize that turbulent environments heighten the need to make risky investments, and sometimes, risky decisions; risk-taking decisions ought to be encouraged in such environments.
Multidimensional constructs are widely used to represent several distinct dimensions as a single theoretical concept. The utility of multidimensional constructs relative to their dimensions has generated considerable debate, and this debate creates a dilemma for researchers who want the breadth and comprehensiveness of multidimensional constructs and the precision and clarity of their dimensions. To address this dilemma, this article presents an integrative analytical framework that incorporates multidimensional constructs and their dimensions, using structural equation modeling with latent variables. This framework permits the study of broad questions regarding multidimensional constructs along with specific questions concerning the dimensions of these constructs. The framework also provides tests of issues underlying the multidimensional construct debate, thereby allowing researchers to address these issues on a study-by-study basis. The framework is illustrated using data from studies of the effects of personality on responses to conflict and the effects of work attitudes on employee adaptation.
Innovation is conceptualized in different ways from firm to firm. While some firms tend to accept a more conservative approach towards innovation, other firms approach innovation from a more entrepreneurial perspective. A conservative model of innovation and an entrepreneurial model of innovation are presented, considering such firm characteristics as environmental variables, information processing variables, structural variables, and decision making variables. The methodology for the study includes data collected via questionnaire from 52 diverse firms in the Montreal region; these firms represent a variety of industries, including broadcasting, food, electronics, chemicals, and publishing, to name a few. The data were analyzed using both a correlational analysis and curvilinear regression analysis to better understand the influence of the respective variables for each model. The findings indicate that innovation within conservative firms correlates positively to the aforementioned variables. Within conservative firms, innovation occurs when 1) environmental challenges and instabilities are present; 2) these instabilities are made explicit to and analyzed by the management team; and 3) financial and structural resources are available for innovation to occur. Entrepreneurial firms also exhibit positive correlations with environmental and structural variables; however, negative correlations are also observed regarding information processing, decision making, and structural integration. Innovation occurs on an extreme level within entrepreneurial firms except in cases when information processing systems, as well as analytical and strategic planning processes and structural integration devices, warn the management team of the risks associated with extreme innovation. The results indicate that a balance between the extremes of conservativism and entrepreneurship must be considered. (AKP)