The Structure of Absorptive Capacity in Three Product Development Strategies

Abstract

This study develops and tests theory about different forms of absorptive capacity that support radical, differentiation and imitation product development strategies. Absorptive capacity theory provides a generalized explanation for how firms exploit their embeddedness in relationships with buyers and suppliers. We develop and test theory that relates combinations of four components of absorptive capacity (R&D capability, product development capability, cooperative embeddedness, and competitive embeddedness) to success rates in three product development strategies. We used data from the American pharmaceutical industry to estimate generalized linear mixed models. Our results confirm known relationships between R&D capability, alliance network position, and the development of radically new products, but reveal different sets of factors that influence differentiation and imitation. We describe a previously undetected influence of competitive embeddedness on the development of radically new products, a contrasting absorptive capacity structure for generic product development, and a mixed structure for differentiated product development. This is a postprint of the published article.

This is the peer reviewed version of the following article: Skilton, P.F., Bernardes, E., Li, M. and Creek, S.A. (2020), The Structure of Absorptive Capacity in Three Product Development Strategies. J Supply Chain Manag, 56: 47-65 e12223. https://doi.org/10.1111/jscm.12223 which has been published in final form at https://doi.org/10.1111/jscm.12223 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited.