Effect of new product development project portfolio mix on new product development program performance

Abstract

Scope and Method of Study: A review of the previous research on new product development indicates that for a firm to remain successful over the long-term, it needs to be ambidextrous. Though the previous research discusses the importance of ambidexterity, to my knowledge, no research has tried to examine this phenomenon empirically. This dissertation is a step in that direction. This research also integrates new product development literature with strategic alliance literature. This research develops a conceptual framework and empirically tests it using a sample of U.S. firms. More specifically, the study proposes that the proportion of radical new product development (NPD) projects in a firm's new product development project portfolio mix has a positive effect on its NPD program performance. Also, it is proposed that the level of environment turbulence as well as the firm's partnership mix effect this relationship. Research hypotheses are empirically tested by collecting survey data from senior executives of U.S firms.

Findings and Conclusions: The results of the analyses indicate a significant relationship between NPD project portfolio mix and NPD program performance. Also, environmental turbulence has a moderating effect on this relationship. More specifically, when perceived environmental turbulence is high and firms have a greater proportion of radical NPD projects in their portfolio, their NPD program performance is higher compared to when they have smaller proportions of radical NPD projects in the portfolio. It was also proposed that when firms have higher proportion of radical projects in their portfolio, they should form alliances to develop these products to increase their performance. But results of this research failed to support this argument. At the end, theoretical and managerial significance, limitations, and future research directions of the study are discussed.