An exploration of organizational factors in new product development success

Abstract

Purpose - This study surveys a broad spectrum of new product development (NPD) projects from the biochemistry industry in the USA, Canada, Germany, the UK, and Belgium with the purpose of exploring the role of the organizational activity factors in the NPD success. Design/methodology/approach - Drawing on the resource-based view of the firm, the authors present a set of hypotheses concerning the relationship between the people resources, development resources, testing resources, and launch resources committed to NPD projects and their financial success. In addition, the effect of the firm's international market involvement on the NPD project success is considered. In this study, testing of the hypothesized relationship is accomplished through linear probability model, binary probit model, and binary logit model. Findings - Empirical results generally support the predictions from the theory. Specifically, the findings of this study show that: the involvement of a strong champion, use of a multi-disciplinary team, and focus of a dedicated team are key factors for NPD project success among the people resources; the detailed market research has a significant impact on the project success in the development phase of the NPD process; the allocation of resources to the testing of the product with the final customer, market testing, and production start-up positively influences the NPD project success; advertising quality plays a key role in the NPD project success during its launch; and the NPD project success is positively associated with the degree of a firm's diversification into international markets. Originality/value - This study provides several guidelines for product managers seeking to launch new products. It offers critical insights into the identification of firm resources that influence the NPD project success. This study also has important implications for firms that consider diversifying or have already diversified into international markets. Understanding the role of market diversification in the NPD project success advances the ability of managers to direct their efforts in international market involvement.