The empirical study of the impact of product innovation factors on performance of new products : Radical and incremental product innovation

Abstract

Innovation strategy is an important factor that helps firms to cope with the pressure from several business environments and increase their performance. However, previous studies are limited attention to investigating incremental product innovation, less examination of the different effects of some factors on each type of product innovation, shortage of study of product innovation from a customer perspective, and deficiency in developing measurement items to fit with the definition for each type of product innovation. So, there raise questions for managers who are responsible for developing new products in order to achieve competitive advantage in the market. This study aims to identify what factors impacted each type of product innovation: radical and incremental product innovation. A researcher proposes frameworks that demonstrate product innovation factors, radical and incremental product innovation, and performance which are antecedence, mediator, and consequence, respectively. The population in this study are firms in five industries: agriculture, biotechnological, energy, food, and pharmaceutical. The total sample sizes are 326. Structural Equation Modeling (SEM) is used for data analysis. The empirical results of this study increase the understanding how the product innovation factors impact on a product innovation and the impact of a product innovation on the performance of firms on the context of radical and incremental product innovation from the customer perspective. Further, managers who are involved with the development of new product can achieve benefits from the results of this study by utilizing limited resources to success in developing new products, defining the appropriate strategy to fit with resources within firms, and identifying the effect of product innovation on the performance of new products.