Successful new product development by optimizing development process effectiveness in highly regulated sectors: the case of the Spanish medical devices sector

Rapid development and commercialization of new products is of vital importance for small and medium sized enterprises (SME) in regulated sectors. Due to strict regulations, competitive advantage can hardly be achieved through the effectiveness of product concepts only. If an SME in a highly regulated sector wants to excell in new product development (NPD) performance, the company should focus on the flexibility, speed, and productivity of its NPD function: i.e. the development process effectiveness. Our main research goals are first to explore if SMEs should focus on their their development process effectiveness rather than on their product concept effectiveness to achieve high NPD performance; and second, to explore whether a shared pattern in the organization of the NPD function can be recognized to affect NPD performance positively. The medical devices sector in Spain is used as an example of a\ud highly regulated sector. A structured survey among 11 SMEs, of which 2 were studied also as in in-depth case studies, led to the following results. First of all, indeed the companies in the dataset which focused on the effectiveness of their development process, stood out in NPD performance. Further, the higher performing companies did have a number of commonalities in the organisation of their NPD function: 1) The majority of the higher performing firms had an NPD strategy characterized by a predominantly incremental project portfolio.\ud 2) a) Successful firms with an incremental project portfolio combined this with a functional team structure b) Successful firms with a radical project portfolio combined this with a heavyweight or autonomous team structure.\ud 3) A negative reciprocal relationship exists between formalization of the NPD processes and the climate of the NPD function, in that a formalized NPD process and an innovative climate do not seem to reinforce each other. Innovative climate combined with an informal NPD process does however contribute positively to NPD performance. This effect was stronger in combination with a radical project portfolio. The highest NPD performance was measured for companies focusing mainly on incremental innovation. It is argued that in highly regulated sectors, companies with an incremental product portfolio would benefit from employing a functional structure. Those companies who choose for a more radical project portfolio in highly regulated sectors should be aware\ud that they are likely to excell only in the longer term by focusing on strategic flexibility. In their NPD organization, they might be well advised to combine informal innovation processes with an innovative climate

Measuring new product and service portfolio advantage

The current study introduces the concept of new product and service portfolio (NPSP) advantage by creating and validating a three-dimensional measurement method that reflects novelty, meaningfulness and superiority – the three characteristics of NPSP advantage. Based on industry-wide homogeneous generalizable quantitative data from 108 manufacturing companies, the results indicate that these three characteristics of NPSP – novelty, meaningfulness and superiority – are distinct characteristics that together constitute NPSP advantage. This paper contributes to the literature on new product development, as its findings suggest that when measuring the concept of NPSP advantage, the three-dimensional construct that includes the three aforementioned characteristics has a better fit to the data than the unidimensional structure. Because it considers both new products and services, the current study offers an integrated approach to measure the desired innovation process outcome (NPSP advantage). In this way, this paper bridges the research on new product development with that on new service development.fi=vertaisarvioitu|en=peerReviewed

USER AND 3RD-PARTY INVOLVEMENT IN DEVELOPING MEDICAL EQUIPMENT INNOVATIONS

The development of innovations is increasingly portrayed as a dynamic interplay between two or more actors. This started with the seminal work of von Hippel concerning the role of users during the initial stages of the development cycle. Subsequent studies by numerous academics demonstrated the relevance of continuous interaction between the manufacturer and potential users. Swedish researchers, in particular, elaborated on the concept of manufacturer-user interaction by focusing on networks consisting of a number of different parties linked together by means of interactive relationships. However, most of the work in this area tends to be of a theoretical and conceptual nature. The research presented in this paper was designed especially to remedy this situation by studying the actual functioning of individual firms within such networks. The empirical data provided by the Dutch medical equipment industry describe the distribution of innovation across manufacturers, users and various third parties. The evidence points to the relevance of interacting with both potential users and various third parties. Nevertheless, essential differences exist between the interaction with both types of cooperation partners. A detailed case description furnishes substantial insight into the intricacies and pitfalls of developing industrial innovations within complex networks