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

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&#...

Full description

Saved in:
Bibliographic Details
Published inInternational journal of research in marketing Vol. 20; no. 4; pp. 377 - 397
Main Authors Frambach, Ruud T, Prabhu, Jaideep, Verhallen, Theo M.M
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.12.2003
Elsevier Sequoia S.A
Subjects
Influence
Innovation
Market orientation
Mathematical models
New product activity
Product development
Product differentiation
Product introduction
Statistical analysis
Strategy
Studies
Netherlands
Strategy
Innovation
Market orientation
New product activity
Online AccessGet full text

Cover

More Information
Summary: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.
ISSN:0167-8116
1873-8001
DOI:10.1016/j.ijresmar.2003.03.003