BUSINESS PERFORMANCE AND STRATEGIC NEW PRODUCT DEVELOPMENT ACTIVITIES- AN EMPIRICAL-INVESTIGATION

Despite the ongoing search for the so-called silver bullet that provid es the ultimate competitive advantage, there is no roadmap showing the ''right'' way to perform new product development (NPD). What's more, it is highly unlikely that such a formula could be developed. Given th e diversity of firms and industries as well as the complexity of the N PD process, no single set of NPD activities or steps can be defined th at will be appropriate for all firms. However, Roger J. Calantone, Sha wnee K. Vickery, and Cornelia Droge propose that it is possible to dev elop such a framework within the confines of a specific industry. They suggest that successful companies within an industry are likely to fo cus on certain essential NPD activities that allow them to achieve the best possible results within the constraints of their market. Their r esearch is directed toward identifying the relationship between the pe rformance of specific innovation-related activities and overall busine ss performance in the furniture industry. This study also assesses the relationship between a firm's performance on an NPD activity and the importance assigned to that activity by the firm's chief executive off icer (CEO). With the current emphasis on cross-functional teams, the s tudy also seeks to determine whether performance on a given NPD activi ty is related to the assignment of responsibility for that activity. T he following NPD activities were evaluated for their effect on corpora te performance: customization, new product introduction, design innova tion, product development cycle time, product technological innovation , product improvement, new product development, and original product d evelopment. Compared to their competitors, top performers consistently put more strategic emphasis on each of these activities. All of these activities have a strong positive influence on return on investment ( ROI) and ROI growth. What's more, most of the activities also clearly relate to stronger market share, market share growth, return on sales (ROS), and ROS growth. The vision and focus on these essential NPD act ivities must begin with CEOs who recognize their strategic value. Such leaders will direct appropriate staff and technical resources toward performance of the necessary activities. They will also ensure that th e organization is sufficiently flexible to accept the changes in respo nsibilities for coordination and leadership that are necessary during different stages in the NPD process. To gain the product flexibility n ecessary for competing in numerous market segments, top performers req uire greater input and leadership from design, engineering, and manufa cturing.