Managing Innovation

Internationalization of Innovation

Alexander Brem, Joe Tidd;Tugrul Daim

• Publisher: WSPC (EUROPE)
• Year: 2019
• ISBN:
  9781786346568
• Topic: Business
• Subtopic: Management
• Index: Business

Managing Innovation is a three-part series covering contemporary technology and innovation management research areas. Each volume comprises key articles from both the International Journal of Innovation Management and the International Journal of Innovation and Technology Management, published by World Scientific, and provides an international, disciplinary approach across its broad coverage of topics.

Relevant for both academics and practitioners, this volume looks at the international aspects of innovation with case studies from China, Germany, India and Russia.

Contents:

• About the Editors
• List of Contributors
• Introduction — Managing Innovation: Understanding International Innovation (Alexander Brem, Joe Tidd and Tugrul Daim)
• Understanding International Innovation:
  • Understanding International Product Strategy in Multinational Corporations Through New Product Development Approaches and Evolution (Yang Liu and Yongjiang Shi)
  • Internationalisation of New Product Development and Research & Development: Results from a Multiple Case Study on Companies with Innovation Processes in Germany and India (Alexander Brem and Florian Freitag)
  • Platform Leadership of Incumbent Telecommunications Operators: The Case of BT 21st Century Network (BT21CN) (Carlos Eduardo Yamasaki Sato)
  • Changing Innovation Roles of Foreign Subsidiaries from the Manufacturing Industry in China (Wenqian Zhou, Vivek K Velamuri and Tobias Dauth)
  • Innovativeness and International Operations: Case of Russian R&D Companies (Daria Podmetina, Maria Smirnova, Juha Väätänen and Marko Torkkeli)
  • Don't Get Caught on the Wrong Foot: A Resource-Based Perspective on Imitation Threats in Innovation Partnerships (Foege J Nils, Erk P Piening and Torsten-Oliver Salge)
• Lean and Global Innovation:
  • Lean and Global Technology Start-Ups: Linking the Two Research Streams (Stoyan Tanev, Erik Stavnsager Rasmussen, Erik Zijdemans, Roy Lemminger and Lars Limkilde Svendsen)
  • Global Innovation: An Answer To Mitigate Barriers to Innovation in Small and Medium-Sized Enterprises? (Stephan Buse, Rajnish Tiwari and Cornelius Herstatt)
  • International Corporate Entrepreneurship with Born Global Spin-Along Ventures — A Cross-Case Analysis of Telekom Innovation Laboratories' Venture Portfolio (Sarah Mahdjour and Sebastian Fischer)
  • Innovative Born Globals: Investigating the Influence of Their Business Models on International Performance (Sascha Kraus, Alexander Brem, Miriam Schuessler, Felix Schuessler and Thomas Niemand)
• Index

Readership: Students and practitioners in the fields of technology and innovation management. Innovation Management;Technology Management;Innovation Success;Crowd;International Innovation0 Key Features:

• This book contains most important publications in the field of technology and innovation management from the recent years

Part 1

Understanding International Innovation

Chapter 1

Understanding International Product Strategy in Multinational Corporations Through New Product Development Approaches and Evolution*

Yang Liu and Yongjiang Shi

International product strategy regarding global standardisation and local adaptation is one of the challenges faced by multinational corporations (MNCs). Studies in this area have tested the antecedents and consequences of standardisation/adaptation, but lack a new product development (NPD) perspective. In this study, we explore how product standardisation/adaptation is determined in the NPD context. Through a qualitative case study of four MNCs, we found three NPD approaches: multi-local, adaptation-based and platform-based. We analysed the advantages and challenges of each approach. In addition, we reveal how the factors (development of information and communication technology, competition pressure, brand awareness and technical capability) could influence the choice of a certain NPD approach. We draw implications on the paths to ensuring full leveraging of the benefits of a platform-based approach.

Keywords: Multinational corporations; global standardisation; local adaptation; new product development; platforms.

Introduction

Multinational corporations (MNCs) are believed to be at the forefront of organisational and managerial innovations (Bélanger et al., 1999), as they face the challenges of global competition and the management of worldwide activities resulting in greater complexity than that faced by domestic firms (Bartlett and Ghoshal, 2000; Yip, 2003). One of the challenges in MNCs is the development of international product strategy regarding global standardisation and local adaptation (Katsikeas et al., 2006; Kotabe, 1990). In many industries, there are still different market requirements across countries in terms of customer tastes, local conditions and regulations (Gooderham, 2012; Rugman and Hodgetts, 2001). MNCs need to identify commonalities and differences in requirements and offer products accordingly (Kotler, 1986; Levitt, 1983).

The strategic importance of new product development (NPD) lies in the cross-functional nature of this task (Wheelwright and Clark, 1992). Studies have shown interactions between product strategy and NPD activities. Many product-related decisions are actually made in the NPD process (Cooper, 1994; Schmidt and Calantone, 2002; Ulrich and Eppinger, 2012). Therefore, it is essential to understand product strategy in the context of NPD.

Whereas previous studies have tested the antecedents and consequences of international product strategy (Calantone et al., 2006; Cavusgil and Zou, 1994; Katsikeas et al., 2006), very few studies have explored international product strategy from an NPD perspective. However, NPD activities could significantly influence the product form. For example, when some requirements are not considered early on in an NPD project, significant redesign is needed afterwards (Gunzenhauser and Bongulielmi, 2008). Such NPD activities are likely to affect the competitiveness of MNCs and therefore it is important to understand how MNCs choose an NPD approach under certain conditions. For NPD approaches in MNCs, we focus on the way of organising NPD activities that affects global standardisation and local adaptation of products.

This study aims to contribute to the understanding of international product strategy and NPD in several ways. To be specific, we identify several NPD approaches in MNCs and explain their advantages and challenges. We show how product standardisation/adaptation is determined in these NPD approaches. In addition, we reveal how certain factors could influence the adoption of a certain NPD approach.

This paper is structured as follows. In the next section, Theoretical Background, relevant studies related to international product strategy and NPD are analysed and research gaps are identified. In the section of Research Methods, the research design is presented including the choice of case companies, data collection and data analysis. In the Case Studies section, we present a detailed description of cases. In the Findings section, we show key findings of three NPD approaches and relevant influencing factors across four MNCs. In the Discussion section, we highlight the theoretical contributions and practical implications of this study, and explore the research limitations and future research avenues.

Theoretical Background

International product strategy in MNCs

Global standardisation and local adaptation have been the subject of discussion for a long time. With standardisation, firms can achieve economies of scale and therefore offer high quality products at a low price (Levitt, 1983). With adaptation, products may be more appealing to customers in terms of the desired functions or aesthetics (Kotler, 1986). Cooper and Kleinschmidt (1985) suggested that international product strategy can be viewed on a continuum and firms position themselves somewhere between standardisation and adaptation. It is measured as the level of product or component sharing across countries (Calantone et al., 2004; Zou and Cavusgil, 2002).

Empirical studies have examined the antecedents and consequences of global standardisation and local adaptation. Such studies have explored product strategy either directly or as an element of marketing strategy. Regarding antecedents, Samiee and Roth (1992) argue that the rate of technological change and the frequency with which competitors change products will influence the emphasis on global standardisation in a firm. Katsikeas et al. (2006) found that the degree of standardisation is related to the similarity between markets in six respects: regulatory environment, technological intensity and velocity, customs and traditions, customer characteristics, the stage of the product in its life cycle and competitive intensity. Zou and Cavusgil (2002) found international experience, global orientation and external globalising conditions to be antecedents of global marketing standardisation. These studies have been undertaken for MNCs.

In terms of studies on export firms, Cavusgil et al. (1993) tested the influence of three factors on the degree of product adaptation in export ventures: company characteristics (a firm’s international experience, export sales goal and entry scope), product/industry characteristics (technological orientation of the industry, product uniqueness, cultural specificity of the product and type of product) and export market characteristics (similarity of legal regulations, competitiveness of the export market and product familiarity of export customers). Cavusgil and Zou (1994) identified six significant antecedents in a study of export marketing strategy: international competence, product uniqueness, the cultural specificity of the product, export market competitiveness, a firm’s experience with the product and the technological orientation of the industry. Calantone et al. (2004) conducted research on the product adaptation of US and South Korean export firms. They identified three antecedents of product adaptation: similarity in the legal environment of the home and export markets, relevant experience of the business unit in international marketing, responsive marketing organisation and customer-orientated practices. Calantone et al. (2006) identified another three antecedents: export dependence, industry adaptation and market similarity.

Studies have tested the consequences of standardisation/adaptation, including strategic and financial performance. Zou and Cavusgil (2002) showed that global standardisation has a positive relationship with the strategic and financial performance of MNCs. In contrast, Samiee and Roth (1992) study revealed that the emphasis on global marketing standardisation in MNCs is not significantly related to financial performance. Some studies draw the conclusion that the degree of product adaptation is positively related to export performance for export firms (Calantone et al., 2004; Cavusgil and Zou, 1994; Leonidou et al., 2002).

Overall, prior studies suggest that a standardisation/adaptation strategy is contingent on many factors such as industry and company characteristics, and there is no single optimal strategic position for all firms (Schmid and Kotulla, 2011). In addition, choosing the right strategy is essential for the superior performance of the firm (Katsikeas et al., 2006).

Global product development

Previous studies on global product development have predominantly examined cross-border collaboration and there are several streams of research. One stream concerns the behavioural environment, defined as the firm’s organisational culture and management commitment (de Brentani and Kleinschmidt, 2004). Studies have tested the direct (de Brentani and Kleinschmidt, 2004; Salomo et al., 2010) and indirect (de Brentani et al., 2010; Kleinschmidt et al., 2007) relationships between the behavioural environment (innovation/globalisation culture, resource commitment and top management involvement) and global NPD performance, emphasising the importance of the behavioural environment in facilitating cross-border collaboration.

Also, there are studies exploring the challenges of global NPD teams. By integrating globally dispersed members into a global NPD team, MNCs could leverage talents worldwide and increase cultural sensitivity (Eppinger and Chitkara, 2006; Graber, 1996; Salomo et al., 2010). However, as global NPD team members are culturally diverse, they are likely to lack shared beliefs, experiences and expectations, which diminishes trust (Barczak and McDonough, 2003; Bierly III et al., 2009; McDonough III et al., 2001). Team members may even encounter conflicts as a result (Tavcar et al., 2005). Bierly III et al. (2009) argue that increasing the frequency of face-to-face communication is one approach to enhancing trust, but the team members also need to overcome the communication barrier caused by cultural differences (Hansen and Ahmed-Kristensen, 2011; Jarvenpaa and Leidner, 1999).

Other studies have examined knowledge management in global NPD. MNCs have the advantage of acquiring local knowledge. However, to reap the benefits, dispersed knowledge needs to be integrated, and how to integrate knowledge in NPD is a challenge for MNCs (Söderquist, 2006). Subramaniam (2006) found that the cross-national collaboration climate is the key to integrating knowledge globally. Subramaniam and Venkatraman (2001) argued that increased frequency of communication in project teams is effective for processing tacit overseas information. Tavcar et al. (2005) found that there is an optimum level of communication which fosters creativity, while too much or too little communication reduces creativity.

The development of information and communication technology (ICT) has changed the NPD approach in many aspects. One important aspect is promoting cross-border collaborations (Chang, 2006; Howells, 1995). ICT tools are useful for global knowledge integration, especially when knowledge is not highly tacit. For virtual global teams, videoconferencing makes intense communication possible and when videoconferencing is combined with face-to-face meetings, communication in NPD can be highly effective while maintaining low travel costs (Tavcar et al., 2005). Kleinschmidt et al. (2010) argued that ICT infrastructure can increase the firm’s ability to access, integrate and transform widely dispersed information and skills. They empirically tested the positive relationship between ICT infrastructure and NPD performance. In addition, Nambisan (2003) finds that ICT could influence process management (making the process more comprehensive or flexible) and project management (better resource monitoring and control) of NPD. Ozer (2000) founds that ICT can influence the speed of NPD.

NPD perspective of product strategy

NPD is an important source o...

Table of contents

• Cover
• Halftitle
• Series Editor
• Title
• Copyright
• Dedication
• About the Editors
• List of Contributors
• Introduction — Managing Innovation: Understanding International Innovation
• Part 1 Understanding International Innovation
• Part 2 Lean and Global Innovation
• Index