Product development strategy, product innovation performance, and the mediating role of knowledge utilization: Evidence from subsidiaries in China
Journal of International Marketing
Department of Marketing, Hong Kong Baptist University, Johannesburg, South Africa; Department of Marketing and Senior Washburn Reserch Fellow, Fox School of Business, Temple University, Johannesburg, South Africa; Department of Marketing, School of Economic and Business Sciences, University of Witwater-srand, Johannesburg, South Africa
This study examines the interplay of product development strategy, knowledge utilization, and product innovation performance in the context of Chinese subsidiaries of multinational companies. When firms strive to develop highly innovative products (breakthrough focus), the amount of resources allocated has a U-shaped relationship to subsequent product innovation performance (i.e., market rewards of new products). When the aim of product development activity is to reinforce and maintain moderately innovative products (platform focus), increased resource allocation shows a positive relationship to product innovation performance. The amount of resources allocated to minor revisions (incremental focus) shows no significant relationship to product innovation performance. Knowledge utilization is an important predictor of the benefits of developing highly and moderately innovative products. Moreover, it helps to mitigate the drawbacks of a breakthrough focus and strengthens the positive impact of a platform focus. © 2009, American Marketing Association.