HOLDEN AUSTRALIA & NEW PRODUCT SUCCESS
Dr Phyra Sok, QUT
Paper prepared for AMN403, Semester 1, 2014
1)In today’s competitive marketplace where there is an increasing level of competition and decreasing product life cycles, product innovation has been identified as the key to a firm’s success (Slater, Mohr, & Sengupta, In Press).2) By seeking new or better solutions to customer problems, new product development can both transform existing markets and create new ones. 3)Without innovation, incumbents will slowly lose their markets as rivals may innovate past them (Hauser, Tellis, and Griffin, 2006). Miron-Spektor, Erez, and Naveh (2011) 4)further suggest that many firms today face immense pressures to pursue innovation to respond to the constant changes in customer requirements, and in particular to develop radical innovations that will draw the market spotlight, thus capturing more market share.
5)Some scholars suggest that the success of a new product is largely attributed to its quality (Tellis, Yin, and Niraj, 2009). 6)Since product quality is significantly associated with the success and failure of the business, firms invest extensively in product quality initiatives to ensure the superior quality of the products (Molina-Castillo, Munuera-Aleman, and Calantone, 2011). 7)Problematically, while firms (i.e. practitioners) have devoted considerable resources to enhance or ensure the quality of new products, such investment does not always achieve their objectives (Henard and Szymanski, 2001; Rust, Moorman, and Dickson, 2002; Molin-Castillo, Munuera-Aleman, and Calantone, 2011). 8)The failure rates for new products has been increasing at an alarming rate, reported as falling between 40 and 75% by Stevens and Burley (2003) and 50% and 90% by Heidenreich and Spieth (2013). 9)This increase in new product failure rates raises a puzzling question about what separates new product winners from losers (Henard and Szymanski, 2001; Droge, Calantone, and...
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