Skip to main content

Advertisement

SpringerLink
Log in

Open innovation, product portfolio innovativeness and firm performance: the dual role of new product development capabilities

  • Original Empirical Research
  • Published:
Journal of the Academy of Marketing Science Aims and scope Submit manuscript

Abstract

Despite a growing interest in the phenomenon of open innovation (OI), empirical evidence documenting the link between new product development capabilities, OI practices, and new product innovativeness is scarce. Eminent scholars have called for large-scale studies that systematically investigate the OI paradigm. Drawing on the knowledge-based view of the firm, new product development, and NPD capabilities literature streams, we conceptualize a framework in which OI practices are disentangled according to the stage of the new product development process in which they occur (development stage or commercialization stage). We identify two major types of OI practices: development-centric OI (which occurs in the development stage) and commercialization-centric OI (which occurs in the commercialization stage). Specific types of NPD capabilities—R&D, market information management, and launch—are expected to both influence the extent to which each OI practice is implemented and moderate the effect of each OI practice on product portfolio innovativeness and firm performance. The empirical analysis combines primary data from a survey of 239 firms with secondary data on innovation and financial outcomes. Our results support our hypotheses and indicate a need to differentiate among the different kinds of OI practices while elaborating on the complex role played by NPD capabilities in influencing OI practices.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3

Similar content being viewed by others

Notes

  1. From this point on, we use the term “open innovation” to refer to its inbound facet.

  2. We acknowledge that open innovation also involves collaboration with external sources. However, we consider such collaboration a prerequisite that culminates with the acquisition of resources that the firm considers valuable, thereby making acquisition a broader term that contains such collaboration.

  3. We have negative values because we use the latent scores from the PLS analysis.

References

  • Ahuja, G., & Katila, R. (2001). Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study. Strategic Management Journal, 22(3), 197–220.

    Article  Google Scholar 

  • Almirall, E., & Casadesus-Masanell, R. (2010). Open versus closed innovation: a model of discovery and divergence. Academy of Management Review, 35(1), 27–47.

    Article  Google Scholar 

  • Andrews, J., & Smith, D. C. (1996). In search of marketing imagination: factors affecting the creativity of marketing programs for mature products. Journal of Marketing Research, 33, 174–187.

    Article  Google Scholar 

  • Armstrong, J. S., & Overton, T. S. (1977). Estimating non- response bias in mail surveys. Journal of Marketing Research, 14, 396–402.

    Article  Google Scholar 

  • Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social psychological research: conceptual, strategic, and statistical considerations. Journal of Personality and Social Psychology, 51(6), 1173.

    Article  Google Scholar 

  • Chesbrough, H. (2003). Open innovation: The new imperative for creating and profiting from technology. Boston: Harvard Business School Press.

    Google Scholar 

  • Chesbrough, H. (2006). Open innovation: A new paradigm for understanding industrial innovation. In H. Chesbrough, W. Vanhaverbeke, & J. West (Eds.), Open innovation: Researching a new paradigm (pp. 1–14). Oxford: Oxford University Press.

    Google Scholar 

  • Chesbrough, H., & Schwartz, K. (2007). Innovating business models with codevelopment partnerships. Research-Technology Management, 50(1), 55–59.

    Google Scholar 

  • Chin, W. (1998). The partial least squares approach to structural equation modeling. In G. A. Marcoulides (Ed.), Modern business research methods (pp. 295–336). Mahwah: Lawrence Erlbaum Associates.

    Google Scholar 

  • Christensen, C. M., & Bower, J. L. (1996). Customer power, strategic investment, and the failure of leading firms. Strategic Management Journal, 17(3), 197–218.

    Article  Google Scholar 

  • Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 35, 128–152.

    Article  Google Scholar 

  • Crawford, M., & DiBenedetto, A. (2011). New products management (10th ed.). New York: McGraw-Hill Irwin.

    Google Scholar 

  • Danneels, E. (2002). The dynamics of product innovation and firm competences. Strategic Management Journal, 23(12), 1095–1121.

    Article  Google Scholar 

  • De Luca, L. M., & Atuahene-Gima, K. (2007). Market knowledge dimensions and cross-functional collaboration: examining the different routes to product innovation performance. Journal of Marketing, 71(1), 95–112.

    Article  Google Scholar 

  • Diamantopoulos, A., & Winklhofer, H. M. (2001). Index construction with formative indicators: an alternative to scale development. Journal of Marketing Research, 38(2), 269–277.

    Article  Google Scholar 

  • Dierickx, I., & Cool, K. (1989). Asset stock accumulation and sustainability of competitive advantage. Management Science, 35(12), 1504–1511.

    Article  Google Scholar 

  • Dougherty, D. (1992). A practice‐centered model of organizational renewal through product innovation. Strategic Management Journal, 13(S1), 77–92.

    Article  Google Scholar 

  • Dutta, S., Narasimhan, O., & Rajiv, S. (1999). Success in high - technology markets: is marketing capability critical? Marketing Science, 18(4), 547–568.

    Article  Google Scholar 

  • Ernst, H., Hoyer, W., & Rübsaamen, C. (2010). Sales, marketing, and research-and- development cooperation across new product development stages: implications for success. Journal of Marketing, 74(5), 80.

    Article  Google Scholar 

  • Faems, D., Looy, B. V., & Debackere, K. (2005). Interorganizational collaboration and innovation: toward a portfolio approach. Journal of Product Innovation Management, 22(3), 238–250.

    Article  Google Scholar 

  • Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18, 39–50.

    Article  Google Scholar 

  • Foss, N. J., Lyngsie, J., & Zahra, S. A. (2013). The role of external knowledge sources and organizational design in the process of opportunity exploitation. Strategic Management Journal, 34(12), 1453–1471.

    Article  Google Scholar 

  • Franke, N., Schreier, M., & Kaiser, U. (2010). The ‘I designed it myself’ effect in mass customization. Management Science, 56(1), 125–140.

    Article  Google Scholar 

  • Garriga, H., von Krogh, G., & Spaeth, S. (2013). How constraints and knowledge impact open innovation. Strategic Management Journal, 34(9), 1134–1144.

    Article  Google Scholar 

  • Grant, R. M. (1991). The resource-based theory of competitive advantage: implications for strategy formulation. California Management Review, 33(1), 114–135.

    Article  Google Scholar 

  • Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(S2), 109–122.

    Article  Google Scholar 

  • Hair, J. F., Sarstedt, M., Ringle, C. M., & Mena, J. A. (2012). An assessment of the use of partial least squares structural equation modeling in marketing research. Journal of the Academy of Marketing Science, 40(3), 414–433.

    Article  Google Scholar 

  • Henseler, J., & Fassott, G. (2010). Testing moderating effects in PLS path models: An illustration of available procedures. In V. E. Vinzi, W. W. Chin, J. Henseler, & H. Wang (Eds.), Handbook of partial least squares: Concepts, methods and applications in marketing and related fields (pp. 713–735). Berlin: Springer.

    Chapter  Google Scholar 

  • Hulland, J. (1999). Use of Partial Least Squares (PLS) in strategic management research: a review of four recent studies. Strategic Management Journal, 20(2), 195–204.

    Article  Google Scholar 

  • Hult, G. T. M., Ketchen, D. J., Jr., & Slater, S. F. (2004). Information processing, knowledge development, and strategic supply chain performance. Academy of Management Journal, 47(2), 241–253.

    Article  Google Scholar 

  • Huston, L., & Sakkab, N. (2006). Connect and develop: inside Procter gamble’s new model for innovation. Harvard Business Review, 84(3), 58–66.

    Google Scholar 

  • Iansiti, M., & West, J. (1997). Technology integration: turning great research into great products. Harvard Business Review, 71, 69–79.

    Google Scholar 

  • Joshi, A. W., & Sharma, S. (2004). Customer knowledge development: antecedents and impact on new product performance. Journal of Marketing, 68(4), 47–59.

    Article  Google Scholar 

  • Katila, R., & Ahuja, G. (2002). Something old, something new: a longitudinal study of search behavior and new product introduction. Academy of Management Journal, 45(6), 1183–1194.

    Article  Google Scholar 

  • Katz, R., & Allen, T. J. (1982). Investigating the Not-Invented-Here (NIH) syndrome: a look at the performance, tenure and communication patterns of 50 R&D project groups. R&D Management, 12, 7–19.

    Article  Google Scholar 

  • Knudsen, M. P. (2007). The relative importance of interfirm relationships and knowledge transfer for new product development success. Journal of Product Innovation Management, 24, 117–138.

    Article  Google Scholar 

  • Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organizational Science, 3(3), 383–397.

    Article  Google Scholar 

  • Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and-development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1–11.

    Article  Google Scholar 

  • Laursen, K., & Salter, A. (2006). Open for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal, 27(2), 131–150.

    Article  Google Scholar 

  • Lee, R. P., & Chen, Q. (2009). The immediate impact of new product introductions on stock price: the role of firm resources and size. Journal of Product Innovation Management, 26(1), 97–107.

    Article  Google Scholar 

  • Leiponen, A., & Helfat, C. E. (2010). Innovation objectives, knowledge sources, and the benefits of breadth. Strategic Management Journal, 31(2), 224–236.

    Google Scholar 

  • Leonard-Barton, D. (1992). Core capabilities and core rigidities: a paradox in managing new product development. Strategic Management Journal, 13(S1), 111–125.

    Article  Google Scholar 

  • Lohmöller, J. B. (1989). Latent variable path modeling with partial least squares. Heidelberg: Physica.

    Book  Google Scholar 

  • MacCallum, R., & Browne, M. W. (1993). The use of causal indicators in covariance structure models: some practical issues. Psychological Bulletin, 14, 533–541.

    Article  Google Scholar 

  • Martin, X., & Mitchell, W. (1998). The influence of local search and performance heuristics on new design introduction in a new product market. Research Policy, 26(7–8), 753–771.

    Article  Google Scholar 

  • Menon, T., & Pfeffer, J. (2003). Valuing internal versus external knowledge. Management Science, 49(4), 497–513.

    Article  Google Scholar 

  • Mol, M. J., & Birkinshaw, J. (2009). The sources of management innovation: when firms introduce new management practices. Journal of Business Research, 62(12), 1269–1280.

    Article  Google Scholar 

  • Moorman, C. (1995). Organizational market information processes: cultural antecedents and new product outcomes. Journal of Marketing Research, 34(1), 318–335.

    Article  Google Scholar 

  • Nambisan, S., & Sawhney, M. (2007). A buyer’s guide to the innovation bazaar. Harvard Business Review, 109–118.

  • Narasimhan, O., Rajiv, S., & Dutta, S. (2006). Absorptive capacity in high-technology markets: the competitive advantage of the haves. Marketing Science, 25(5), 510–524.

    Article  Google Scholar 

  • Nelson, R. R., & Winter, S. (1982). An evolutionary theory of economic change. Cambridge: Harvard University Press.

    Google Scholar 

  • Podsakoff, P. M., MacKenzie, C. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.

    Article  Google Scholar 

  • Prabhu, J. C., Chandy, R. K., & Ellis, M. E. (2005). The impact of acquisitions on innovation: poison pill, placebo, or tonic? Journal of Marketing, 69, 114–130.

    Article  Google Scholar 

  • Prahalad, C. K., & Ramaswamy, V. (2000). Co-opting customer competence. Harvard Business Review, 78(1), 79–87.

    Google Scholar 

  • Preacher, K. J., Rucker, D. D., & Hayes, A. F. (2007). Addressing moderated mediation hypotheses: theory, methods, and prescriptions. Multivariate Behavioral Research, 42, 185–227.

    Article  Google Scholar 

  • Reibstein, D. J., Day, G., & Wind, J. (2009). Is marketing academia losing its way? Journal of Marketing, 73(4), 1–3.

    Article  Google Scholar 

  • Rindfleisch, A., & Moorman, C. (2001). The acquisition and utilization of information in new product alliances: a strength-of-ties perspective. Journal of Marketing, 65(2), 1–18.

    Article  Google Scholar 

  • Ringle, C. M., Wende, S., Will A. (2005). SmartPLS 2.0 (beta).

  • Ringle, C. M., Sarstedt, M., & Straub, D. W. (2012). A critical look at the use of PLS-SEM in MIS quarterly. MIS Quarterly, 36(1), s1–s8.

    Google Scholar 

  • Rosenkopf, L., & Nerkar, A. (2001). Beyond local search: boundary‐spanning, exploration, and impact in the optical disk industry. Strategic Management Journal, 22(4), 287–306.

    Article  Google Scholar 

  • Rothaermel, F. T., & Alexandre, M. T. (2009). Ambidexterity in technology sourcing: the moderating role of absorptive capacity. Organization Science, 20(4), 759–780.

    Article  Google Scholar 

  • Rubera, G., & Kirca, A. H. (2012). Firm innovativeness and its performance outcomes: a meta-analytic review and theoretical integration. Journal of Marketing, 76(3), 130–147.

    Article  Google Scholar 

  • Rubera, G., Ordanini, A., & Calantone, R. (2012). Whether to integrate R&D and marketing: the effect of firm competence. Journal of Product Innovation Management, 29(5), 766–783.

    Article  Google Scholar 

  • Salomo, S., Talke, K., & Strecker, N. (2008). Innovation field orientation and its effect on innovativeness and firm performance. Journal of Product Innovation Management, 25, 560–576.

    Article  Google Scholar 

  • Sarkar, S., & Costa, A. I. A. (2008). Dynamics of open innovation in the food industry. Trends in Food Science and Technology, 19(11), 574–580.

    Article  Google Scholar 

  • Schoonhoven, C. B. (1981). Problems with contingency theory: testing assumptions hidden within the language of contingency “ theory”. Administrative Science Quarterly, 349-377.

  • Sethi, R., Iqbal, Z., & Sethi, A. (2012). Developing new-to-the-firm products: the role of micropolitical strategies. Journal of Marketing, 76, 99–115.

    Article  Google Scholar 

  • Sorescu, A., & Spanjol, J. (2008). Innovation’s effect on firm value and risk: insights from consumer packaged goods. Journal of Marketing, 72(2), 114–132.

    Article  Google Scholar 

  • Sorescu, A. B., Chandy, R. K., & Prabhu, J. C. (2003). Sources and financial consequences of radical innovation: insights from pharmaceuticals. Journal of Marketing, 67, 82–102.

    Article  Google Scholar 

  • Talke, K., & Hultink, E. (2010). Managing diffusion barriers when launching new products. Journal of Product Innovation Management, 27(4), 537.

    Article  Google Scholar 

  • Terwiesch, C., & Xu, Y. (2008). Innovation contests, open innovation, and multi-agent problem solving. Management Science, 54(9), 1529–1543.

    Article  Google Scholar 

  • Todd, A. J., Fang, E., & Palmatier, R. W. (2011). The effects of customer acquisition and retention orientations on a firm’s radical and incremental innovation performance. Journal of the Academy of Marketing Science, 39(2), 234–251.

    Article  Google Scholar 

  • Todorova, G., & Durisin, B. (2007). Absorptive capacity: valuing a reconceptualization. Academy of Management Review, 32(3), 774–786.

    Article  Google Scholar 

  • VonHippel, E. (2005). Democratizing innovation. Cambridge: MIT Press.

    Google Scholar 

  • Vorhies, D. W., & Morgan, N. A. (2005). Benchmarking NPD capabilities for sustainable competitive advantage. Journal of Marketing, 69(1), 80–94.

    Article  Google Scholar 

  • West, J., Vanhaverbeke, W., & Chesbrough, H. (2006). Open innovation: A research agenda. In H. Chesbrough, W. Vanhaverbeke, & J. West (Eds.), Open innovation: Researching a new paradigm (pp. 285–209). Oxford: Oxford University Press.

    Google Scholar 

  • Yeniyurt, S., Henke, J. W., Jr., & Yalcinkaya, G. (2014). A longitudinal analysis of supplier involvement in buyer’s new product development: working relations, inter-dependence, co-innovation, and performance outcomes. Journal of the Academy of Marketing Science, 42(3), 291–308.

    Article  Google Scholar 

  • Yli-Renko, H., & Janakiraman, R. (2008). How customer portfolio affects new product development in technology-based entrepreneurial firms. Journal of Marketing, 72(5), 131–148.

    Article  Google Scholar 

  • Zahra, S., & George, G. (2002). Absorptive capacity: a review, reconceptualization, and extension. Academy of Management Review, 27, 185–203.

    Google Scholar 

  • Zander, U., & Kogut, B. (1995). Knowledge and the speed of the transfer and imitation of organization capabilities: an empirical test. Organization Science, 6(1), 76–92.

    Article  Google Scholar 

  • Zhou, K. Z., & Li, C. B. (2012). How knowledge affects radical innovation: knowledge base, market knowledge acquisition, and internal knowledge sharing. Strategic Management Journal, 33(9), 1090–1102.

    Article  Google Scholar 

  • Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, 31(5), 547–561.

    Google Scholar 

Download references

Acknowledgments

The authors thank Ram Ranganathan and Wim Vanhaverbeke for helpful suggestions on earlier versions of the paper.

Author information

Authors and Affiliations

  1. Department of Marketing, Bocconi University, Via Rontgen 1, 20136, Milan, Italy

    Gaia Rubera & Andrea Ordanini

  2. Department of Marketing, University of Texas at San Antonio, San Antonio, Texas, USA

    Deepa Chandrasekaran

Authors
  1. Gaia Rubera
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Deepa Chandrasekaran
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Andrea Ordanini
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding authors

Correspondence to Gaia Rubera or Deepa Chandrasekaran.

Appendix A

Appendix A

Primary measures in the survey

Development-centric OI

Please indicate to what extent in 2007–2008 you collaborated with the following subjects to acquire new ideas to possibly include in new products (1 = never; 3 = sometimes; 5 = for every new product development project in the last 2 years).

  1. a.

    Suppliers .68*

  2. b.

    Clients .34*

  3. c.

    Competitors .65*

  4. d.

    Consultants .23*

  5. e.

    Universities or research labs .42*

  6. f.

    Professional or industry associations −.48*

Please indicate to what extent in 2007–2008 you collaborated with the following subjects to acquire the technology necessary to develop new products (1 = never; 3 = sometimes; 5 = for every new product development project in the last 2 years).

  1. a.

    Suppliers .76*

  2. b.

    Competitors .19

  3. c.

    Consultants .40*

  4. d.

    Universities or research labs −.02

  5. e.

    Professional or industry associations .33*

Commercialization-centric OI

Please indicate to what extent in 2007–2008 you collaborated with the following subject to buy new products physically ready to be launched in the market from the following subjects (1 = never; 3 = sometimes; 5 = almost for every product that we introduced in the last 2 years).

  1. a.

    Suppliers .09

  2. b.

    Competitors −.50*

  3. c.

    Consultants .49*

  4. d.

    Universities or research labs −.95*

  5. e.

    Professional or industry associations .80*

R&D capabilities ( α  = 0.85)

Please rate your business unit relative to your major competitors in the following areas in 2007–2008 (1 = much worse than competitors; 4 = the same as competitor; 7 = much better than competitors).

  1. a.

    Ability to develop new products

  2. b.

    Developing new products to exploit R&D investment

  3. c.

    Test marketing of new products

Market information management capabilities ( α  = 0.85)

Please rate your business unit relative to your major competitors in the following areas in 2007–2008 (1 = much worse than competitors; 4 = the same as competitor; 7 = much better than competitors).

  1. a.

    Gathering information about customers and competitors

  2. b.

    Using market research skills to develop effective marketing programs

  3. c.

    Tracking customer wants and needs

  4. d.

    Making full use of marketing research information

  5. e.

    Analyzing our market information

Launch capabilities ( α  = 0.86)

Please rate your business unit relative to your major competitors in the following areas in 2007–2008 (1 = much worse than competitors; 4 = the same as competitor; 7 = much better than competitors).

  1. a.

    Successfully launching new products

  2. b.

    Insuring that the launch of new products is consistent with customer needs

  3. c.

    Providing sales support

* p < .05

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Rubera, G., Chandrasekaran, D. & Ordanini, A. Open innovation, product portfolio innovativeness and firm performance: the dual role of new product development capabilities. J. of the Acad. Mark. Sci. 44, 166–184 (2016). https://doi.org/10.1007/s11747-014-0423-4

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11747-014-0423-4

Keywords

Search

Navigation