1. 26.1.2016 WHY SOME NEW PRODUCTS ARE MORE SUCCESSFUL THAN OTHERS DAVID H. HENARD DAVID M. SZYMANSKI Max Andersson, Nicolas Dolenc, Timo Itävuo, Samuel Makkonen, Jaakko Rauhala

2. Contents The problem and the Henard & Szymanski study Meta-analysis methods and results How managers benefit from this study and how to implement these findings in practice Comparison, limitations & critique 26.1.2016 2

3. Problem Product innovation is increasingly valued as a key component of the sustainable success of a business's operations. 18 studies (1994) -> 60 studies (2001) - No conclusive study on these findings 26.1.2016 3

4. Henard & Szymanski paper “The purpose of this study is to conduct and present insights from a meta-analysis of the evidence on the determinants of new product performance. “ To help managers and researchers synthesize this growing body of evidence, the authors conducted a meta- analysis of the new product performance literature. Electronic databases, citations, journals, authors.. Keywords: “product innovation”, “new products” e.g.… 26.1.2016 4

5. Meta-analysis results The study is a literature review of conducted studies of the subject A serious amount of doubt regarding validity and relevance arouse in the discussion –Many of the reviewed studies might have been subjective and others objective –Some factors deemed relevant had been studied much less –Firms that have failed are likely not captured in the data pool However the study finds 24 studied characteristics that where deemed relevant which can be grouped in 4 categories… 26.1.2016 5

6. Characteristic Categories Product characteristics - such as price, innovativeness, and managers' perceptions of how well the offering meets customers' needs. Strategy characteristics - Tasks such as timing of launch, allocating recourses to the project, capitalizing on synergies Process - characteristics refer specifically to elements associated with the new product development process and its execution. Marketplace - characteristics capture elements that describe the target market The most studied characteristics are the ones in the process characteristics category 26.1.2016 6

7. Characteristics Of the 24 characteristics, 10 were deemed more relevant than others based on the fact that their correlation couldn’t be a factor of chance. The factors represent all four categories. Market Potential Dedicated human recourses Marketing task proficiency Product meeting customer demands Pre development task proficiency R&D recourses Order of entry Launch proficiency Technological sophistication Technological proficiency Characteristics: Marketplace Strategy Process Product 26.1.2016 7

8. How can company managers benefit from this study? Support from senior managers resulted in better results, even though the managers themselves didn’t recognise this In a less structured organisation, more spontaneity is needed, otherwise risk of the organisation collapsing Integrating more functional diversity in to product development team may not lead to better results –Only in selected contexts and under selected conditions Product, strategies and processes need to be matched to the environmental context Companies should put emphasis on dedicated human resources 26.1.2016 8

9. How to practically implement these findings? Senior managers should be more involved in the conversation regarding the projects –No micro managing  discuss, reward, appreciate, inspire –More spontaneity Taking great care when implementing more functionality in to the new product team –Needs to be carefully specified what kind of diversity is needed Managers should be more objective when making decisions  less innaccuracies –Communication among managers and team members vital 26.1.2016 9

10. Knowledge for the managers According to the article there is a significant difference between 1)What factors the companies regard as high value and which factors are studied the most 2)What factors have the biggest impact on the success of the product  The companies should turn their focus from the less effective factors to more effective ones 26.1.2016 10

11. Things we focus on These are the factors that the companies and the academic world are the most interested in 1. Marketing synergy 2. Market orientation 3. Cross-functional communication 4. Structured approach 5. Product advantage. 8. Dedicated R & D Resources 18. Order of entry 21. Dedicated human resources 23. Product technological sophistication 24. Product meets customer needs Things we should focus on According to the article, these factors have the biggest impact on the success of the product 1. Order of entry 2. Product meets customer needs 3. Product technological sophistication 4. Dedicated R & D Resources 5. Dedicated human resources. 6. Product advantage 13. Market orientation 16. Marketing synergy 20. Structured approach 23. Cross-functional communication 26.1.2016 11

12. Critique Some key factors such as product quality have not been taken in to account in the studied factors The study is from 2001, so it is relatively old. Products and their key factors might have changed after that –For example Nokia 3310 and Uber should be compared with slightly different factors Relatively small sample base (60 studies) The correlation between the different factors and success has not been studied. 26.1.2016 12