Company competencies as a network: The role of product development

Product development managers and academics like to assure themselves and ea ch other that new, product development is one of the most critical areas of company competence and contributes positively to company success. But does top management agree? Because if they do not, the consequences will heavil y influence the resource allocation to product development and career possi bilities of new product developments manager This study examines how top ma nagers view the importance of product development relative to other central competence areas. Although asking managers about their perception is one w ay of evaluating the importance, its contribution to company success is ano ther important measure. In this study, the impact of product development re lative to other important competence areas, is measured to assess further h ow critical product development is for overall company success. The authors investigate these matters in a survey of top managers in 513 Da nish production companies. Ten areas important for achieving company object ives are identified. These are product development, market intelligence, pr oduction management, strategy and vision, sales, marker responsiveness, pro motion, internal co-operation, image, and supply management. Product develo pment is rated a fairly important competence as it ranks number four, with sales, market responsiveness, and production management ranking numbers one to three. Yet a distressing negative impact on overall company success is found for product development proficiency, whereas success is positively re lated to production management, image, and differentiation of products. Fur ther analysis reveals that product development contributes positively to su ccess by enabling product differentiation and enhancing promotion proficien cy. Influenced by and influencing many other competencies, product developm ent is found to be a central competence. Results support a nonfunctional and broad perspective of how, bundles of co mpetences interact and impact on success and establish a positive overall c ontribution to product development. (C) 2000 Elsevier Science Inc.