Product Development Strategy: Innovation Capacity and Entrepreneurial Firm Performance in High-Tech SMEs

216 Pages·2015·0.791 MB·English

by  Mina Tajvidi, Azhdar Karami (auth.)

Product Development Strategy

Product Development
Strategy
Innovation Capacity and Entrepreneurial
Firm Performance in High-Tech SMEs
Mina Tajvidi
Bangor Business School, Bangor University, UK
and
Azhdar Karami
University of Tabriz, Iran and Bangor Business School, Bangor University, UK
© Mina Tajvidi and Azhdar Karami 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-50137-0
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in accordance with the Copyright, Designs and Patents Act 1988.
First published 2015 by
PALGRAVE MACMILLAN
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registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-56993-9 ISBN 978-1-137-50139-4 (eBook)
DOI 10.1057/9781137501394
This book is printed on paper suitable for recycling and made from fully
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processes are expected to conform to the environmental regulations of the
country of origin.
A catalogue record for this book is available from the British Library.
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This book is dedicated to my life’s heroes, mum and dad.
You are the love of my life
Mina Tajvidi
I would like to dedicate this book to my family for their
unconditional support
Azhdar Karami

Contents
List of Figures xi
List of Tables xiii
Preface xv
Acknowledgements xvii
1 Introduction 1
1.1 Introduction 1
1.2 Research background 1
1.2.1 Product development strategy 1
1.2.2 Innovation capacity 2
1.2.3 Entrepreneurial firm performance 3
1.3 Rationale of study 6
1.4 Research objective and questions 7
1.5 Methodology 8
1.6 Summary 9
References 10
2 Literature Review 15
2.1 Introduction 15
2.2 Strategic management 15
2.2.1 Origin of the term “strategy” 15
2.2.2 The concept of strategic management 16
2.2.3 Definitions of strategy in management 17
2.2.4 Strategic management process 18
2.2.5 Strategic management in small- and
medium-sized enterprises (SMEs) 20
2.3 Strategic directions 21
2.3.1 Consolidation strategy 22
2.3.2 Product development strategy 22
2.3.3 Market development strategy 22
2.3.4 Diversification strategy 22
2.3.5 Product development strategy in SMEs 23
2.4 Innovation 28
2.4.1 Innovation capacity 29
vii
viii Contents
2.5 Entrepreneurship 35
2.5.1 The concept of entrepreneurship 35
2.5.2 Entrepreneurial firm performance 36
2.6 Summary 37
References 38
3 Research Strategy 45
3.1 Introduction 45
3.2 Revisiting the research objectives and questions 45
3.3 Research methods and strategy 46
3.3.1 Research philosophy 46
3.3.2 Research approach 49
3.3.2.1 Qualitative or quantitative research 51
3.3.3 Research design 52
3.3.3.1 Source of the data 52
3.3.3.2 Data collection instrument 52
3.3.4 Data collection process 57
3.3.5 Constructing the questionnaire 58
3.3.5.1 Level of measurement 59
3.4 T he conceptual framework of the study and
research variables 61
3.4.1 Product development strategy variable 62
3.4.2 Innovation capacity variables 62
3.4.3 Entrepreneurial firm performance variable 65
3.5 Characteristics of SMEs 66
3.6 The proposed model and hypotheses 67
3.7 Research choice and data analysis plan 68
3.8 Summary 73
References 73
4 Product Development Strategy 79
4.1 Introduction 79
4.2 Product development and business strategy 79
4.3 New product development process and models 82
4.4 New product development and success factors 90
4.5 Product development and life cycle 92
4.6 New product development, knowledge and learning 96
4.7 New product development and resource management 99
4.8 O rganizational knowledge and new
product development 101
4.9 Descriptive empirical findings 102
4.9.1 Characteristics of the studied firms 103
Contents ix
4.9.2 Managerial characteristics of the respondents 105
4.9.3 Managerial position of the respondents 107
4.10 Research variables 108
4.10.1 Data measurement process 108
4.10.2 Confirmatory factor analysis 108
4.10.3 P roduct development strategy and
innovation capacity 112
4.10.4 P roduct development strategy and
entrepreneurial firm performance 113
4.11 Summary 115
References 116
5 Innovation Capacity 125
5.1 Introduction 125
5.2 Innovation capacity in SMEs 125
5.3 Innovation typology 127
5.4 Technological innovation 128
5.5 Research and development 129
5.6 Innovation capacity and entrepreneurship 129
5.7 New product development success factors 132
5.8 I nnovation capacity, product development strategy
and firm performance 133
5.8.1 Product innovation 137
5.8.2 Process innovation 137
5.8.3 Investment in research and development 138
5.9 Moderating role of innovation capacity 138
5.10 Summary 141
References 141
6 Entrepreneurial Firm Performance 147
6.1 Introduction 147
6.2 Entrepreneurship in SMEs 147
6.3 Innovation and entrepreneurship 152
6.4 Risk taking and entrepreneurship 153
6.5 Proactivity and entrepreneurship 154
6.6 Financial performance, turnover/net profit 154
6.7 Entrepreneurship and product development strategy 155
6.8 E ntrepreneurial firm performance and innovation
capacity 161
6.9 Summary 168
References 169