STRATEGIC ORIENTATION OF THE FIRM AND NEW PRODUCT PERFORMANCE

The authors seek to understand which of three different strategic orie ntations of the firm (customer, competitive, and technological) is mor e appropriate, when, and why it is so in the context of developing pro duct innovations. They propose a structural model of the impact of the strategic orientation of the firm on the performance of a new product . The results provide evidence for best practices as follows: (1) A fi rm wishing to develop an innovation superior to the competition must h ave a strong technological orientation; (2) a competitive orientation in high-growth markets is useful because it enables firms to develop i nnovations with lower costs, which is a critical element of success'; (3) firms should be consumer- and technology-oriented in markets in wh ich demand is relatively uncertain-together, these orientations lead t o products that perform better, and the firm will be able to market in novations better, thereby achieving a superior level of performance; a nd (4) a competitive orientation is useful to market innovations when demand is not too uncertain but should be de-emphasized in highly unce rtain markets.