Market-driving innovation: understanding the critical success factors at the front end of the development process
Creators: name: Thongpravati, Onnida
Publisher: name: RMIT University
Year: 2024

description: Although marketing scholars have investigated the significance of both radical and really new product innovations, the factors underpinning the success of such “market-driving” innovations remains elusive, especially at the front end of new-product development (NPD) process. Ensuring that future potential market-driving innovations are able to emerge from the front end of the NPD process into the development and commercialisation stages without losing their innovativeness is fraught with difficulty and is a key challenge for firms. Drawing upon the resource-based view (RBV) and the dynamic capability theory of the firm, this research examines the notion of Market Vision (MV) and its antecedent, Market Visioning Competence (MVC) to improve the “early performance” of market-driving innovations. The research extends the understanding of these factors through the incorporation of Absorptive Capacity (ACAP). Accordingly, a model is developed that integrates ACAP, MVC and MV with market-driving innovation performance, comprising before-launch stage performance, post-launch stage performance and financial performance. External and internal structural factors relevant to the firm such as size and the nature of its competitive environment are also considered as moderators in the model. The data were derived from a web-based survey of 179 managers from top innovative companies in Thailand. The focus of the research was at the NPD program level. The sample was primarily drawn from the 2011–2012 database of the National Innovation Agency, operating under the umbrella of the Ministry of Science and Technology, Thailand (National Innovation Agency, 2011, 2012). The hypothesised relationships were tested using linear regression whilst the overall set of relationships was examined using structural equation modelling. A major contribution of this research is the finding that ACAP as a dynamic capability significantly and distinctly influences both MVC and MV at the front end of market-driving innovation. On one hand, the firm’s ability to acquire and assimilate knowledge can lead to a discovery of new knowledge for market-driving ideas. On the other hand, a firm’s ability to transform and exploit knowledge, fosters the entrepreneurial mindset and actions of individuals or NPD team members, and can directly influence opportunity recognition in MVC, as well as generating the new initiatives and knowledge that are essential to develop a shared mental model of radically new or really new product for future markets (the MV itself). The findings also indicate that MVC significantly and positively influences MV and that both of these constructs significantly and positively influence certain aspects of before-launch stage performance and post-launch stage performance. Significant positive relationships are also observed between these performance outcomes and the financial performance of market-driving innovations. Additionally, large firm size is shown to have a significant positive moderating effect on the way in which MV translates into post-launch stage performance outcomes. Overall, these findings are important in suggesting that the capability to visualise future potential product-markets (MVC/MV) and in combination with broader organisational level dynamic learning capabilities (ACAP) can lead firms to achieve better performance of market-driving innovations, from the front end of the development process and through to commercialisation. <br><br>