NEW PRODUCT IN ELECTRICAL EQUIPMENT MANUFACTURING

New Product in Electrical Equipment Manufacturing

Abstract

This study of the Electrical Equipment Manufacturing Industry investigates three major hypotheses important to new product market success which are: The greater the degree of organizational integration during the development of new products, the greater the market success; the greater the degree of organizational integration during the development of new products, the greater new product development proficiency; and the greater new product development proficiency, the greater the market success. The most and least successful new products of US firms in the electrical equipment manufacturing industry were employed in this research. Our definition of “Organizational Integration” is the degree of cooperation and communication between internal and external new product development (NPD) “support” groups and NPD teams. “NPD Process Proficiency” is defined as how well NPD activities, stages, and the NPD process as a whole are performed. “New product market success” is depicted by four measures that encompass profit expectations, sales potential, success entering new markets, and entering existing markets with new products successfully. Our study is based on data obtained from survey instruments mailed to recipients such as New Product Development Managers who had already been designated by executives of our sample organizations. Our research reveals a number of interesting findings. Overall organizational integration between NPD teams and all other groups associated with an NPD effort was found to have a significant association with new product success. Moreover, it was determined that organizational integration has a significant correlation to the proficiency with which the various stages of the NPD process are performed. Additionally, the proficiency with which various stages of the NPD process were performed was noted to have a significant relationship with new product market success. Our study discovered a number of other findings that suggest important implications for both product development managers and scholars.

New Product in Electrical Equipment Manufacturing

1. Introduction

This research attempts to assist electrical equipment manufacturers solve problems faced during the development of new electrical products. The requirement for the rapid development of new electrical equipment by the firms in this industry is becoming an imperative. Moreover, firms that manufacture electrical equipment are attempting to satisfy expanding and changing customer requirements in light of burgeoning technological progress and intensifying global competition (Millson et al., 1992).

It has been noted that organizations that develop new products in this competitive environment frequently fail due to their neglect of integration processes required for successful product development; their lack of or infrequent performance of critical NPD activities, and their often unsuccessful and futile performance of NPD tasks (Cooper 1988; Wind and Mahajan, 1988; Calantone and Di Benedetto, 1988). Combined with these difficulties, our understanding of the impact on NPD success of relationships between “organizations” external to new product developing firms such as customers and suppliers and NPD teams has received limited attention in the literature. Investigations such as these can provide insight into the influence of NPD activities performed after the commercialization of new products.

2. Literature Review

The literature that describes the development of ...