Technovation 22 (2002) 301–312
www.elsevier.com/locate/technovation
Product development process in Spanish SMEs: an empirical
research
Isidre March-Chordà a, A. Gunasekaran
b
b,*
, Begoña Lloria-Aramburo
a
a
Department of Business Administration, University of Valencia, 46022 Valencia, Spain
Department of Management, University of Massachusetts, North Dartmouth, MA 02747-2300, USA
Received 20 December 2000; accepted 12 January 2001
Abstract
Rapid product development has been treated as a competitive strategy in a global market environment. It is essential to improve
the product development process with the objective of reducing product development cycle time and hence to reach the market as
quickly as possible. Large-scale companies have adopted new strategies and technologies to reduce the product development cycle
time, taking into account various market and innovation barriers. However, small and medium enterprises (SMEs) have not received
adequate attention from researchers for their product development process. In this paper, an attempt has been made to analyze the
critical success factors for the product development process with the help of an empirical research in SMEs. The research is based
on a sample of 65 SMEs located in a medium developed region (Valencia) of Spain. The main objective of this research is to
identify the major determinants that confront the product development. The cost of product development projects that discourages
commitment to new product development and the uncertainty of the market acceptance were found to be the major factors. Contrary
to what the theoretical studies recommend, the most frequent sequence for the process of development and promotion of new
products is rather simple and short, with an average time for new product development of around 6 months, although largely
depending on the sector. According to the study reported in this paper, the fulfilment of the key success factors as suggested by
the literature is, in general, low.  2002 Elsevier Science Ltd. All rights reserved.
Keywords: Product development process; Theoretical framework; Empirical research; Spanish SMEs
1. Introduction
Product development success in terms of time and
innovation has contributed significantly to a firm’s competitiveness. There is a lot of literature available that
deals with the product development process in largescale industries. However, there is a lack of empirical
studies to identify the critical success factors (CSF) for
product development in small and medium size
enterprises (SMEs). Nevertheless, the role of SMEs in
the national economy and in providing employment
opportunities is understood. This particular study makes
an attempt to search for enough evidence about the
explanatory factors for the success in the new product
development process. The aim here is to test the degree
* Corresponding author. Tel.: +1-508-999-9187; fax: +1-508-9998776.
E-mail address: agunasekaran@umassd.edu (A. Gunasekaran).
of fulfilment of a list of success factors in a sample of
SMEs located in a medium developed region, as well as
to identify bottlenecks in the product development process. This is a topic in which we can find a lot of focused
literature on product development. For instance, among
the authors who have inspired this area of research is
Wilson (1995), who develops a framework for superior
product development and managing the process for
innovative products.
In the recent literature we can find several models
based on the lessons and recipes for success in the product development process. Several authors including
Wilson (1995), Bobrow (1997), Bowen et al. (1994),
McGrath (1996), Rosenau and Moran (1993) and Smith
et al. (1995) have highlighted several common critical
elements of product development projects. Speed to market, quality management, multifunctional teamwork,
sense of commitment and a systems approach, are put
forward by most of these studies as key requirements
for success in new product development.
0166-4972/02/$ - see front matter  2002 Elsevier Science Ltd. All rights reserved.
PII: S 0 1 6 6 - 4 9 7 2 ( 0 1 ) 0 0 0 2 1 - 9
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Wilson (1995) developed a product development process model based on the lessons learned by firms whose
timely products have been critical for market success. In
the same line, Bobrow (1997) provides a list of success
factors for new products, including a clear strategic
direction, a corporate culture aligned behind new products, a sensible allocation policy of resources and
people, and a cross-functional team dedicated to the new
product development process.
On the other hand, Bowen et al. (1994) highlights
seven critical elements that any outstanding product
development project should have in common: (1) recognize and nurture the firm’s core capabilities, (2) a guiding vision shared by all members in the cross-functional
team, (3) project leadership and organization, (4) ability
to instill the team with a sense of ownership and commitment, (5) ability to rapidly learn and to reduce mistakes
and misunderstandings, (6) ability to push forward the
company’s performances, and (7) ability to integrate
within projects following a systems approach.
McGrath (1996) provides a guide to product and
cycle-time excellence by setting and implementing a
process called ‘PACE’. The need to reduce development
time is highlighted by several studies. Smith et al. (1995)
stress the ability to cut down development time by using
economic models for a new product, the management of
motivational issues and the proper management of risk.
Rosenau and Moran (1993) furnish a guide for success
with project management tools to the product development process, emphasizing speed to market, quality management and multifunctional teamwork. Similarly, the
study by Himmelfarb (1992), shows how companies are
able to attain faster product development by setting up
parallel marketing, R&D, manufacturing, engineering
and finance teams.
Patrick (1997) focuses on how to maintain a firm’s
understanding of a project through its development and
how to forecast and ensure the successful launch of a
project. Focused on the launch phase, Bruce and Biemans (1995) cover in their study the interface between
design and marketing networks and relationships, as well
as an assessment of success and failures of launch strategies, based on an empirical analysis. Kuczmarski
(1992) provides recipes for success after reviewing the
way 200 companies have increased their new product
success.
As indicated earlier, there is a need to identify the
critical success factors for the product development process in SMEs considering their role in the economy and
the potential for employment. Most of the studies have
discussed a generic framework for identifying CSFs in
the product development process without any special reference to the size and nature of the industries. In this
paper, we have made an attempt to find out some of the
CSFs for the product development process in SMEs,
with the help of an empirical study. This study is con-
ducted with SMEs in Valencia, Spain. The organization
of the paper is as follows: this section highlights the role
of SMEs and the importance and issues of a successful
product development process in SMEs. Section 2
reviews the literature available on CSFs in the product
development process, considering three major determinants: (a) top management support, (b) product development planning and process, and (c) analysis of market
requirements. The details of the research methodology
incorporating research objectives, questions, data collection methods, and profiles of the companies participating
in the study are presented in Section 3. Details of the
empirical results and analysis are presented in Section
4. Finally, a summary of the findings and conclusions
are given in Section 5.
2. Critical success factors in product development
In this section, a list of critical success factors for the
new product development process, based on the analysis
of existing literature, is identified. Product innovation
can be defined as the commercialization of a technologically distinct product, including new products whose
design characteristics change to improve the service to
users (Dougherty, 1992; Kuczmarski, 1992). Nowadays
there is an agreement among the analysts in considering
that a need for radical innovation of products arises when
the properties, characteristics, uses, attributes, design
properties and use of materials and components differ
significantly from the pre-existing products. Such innovations usually rely on the introduction of new technologies or new applications of prior technologies. On the
other hand, incremental innovation of a product is
related to improvements to the existing product properties or functioning. This indicates that the development
process of an existing product has been improved in a
significant manner (Zirger and Maidique, 1990). The
major critical factors for the success of product development and innovation are classified into three groups: (i)
top management support, (ii) product development planning, and (iii) analysis of market requirements. This
classification is based on the nature and importance of
the role of different determinants on product innovation
and development. We have grouped a range of obstacles
under each major classification criteria to discuss the
findings of the proposed empirical study (Cooper and
Kleinschmidt, 1987). The literature has been briefly
reviewed using this classification scheme and details are
given in the following sections.
2.1. Top management support
This group includes a list of factors such as clear strategic direction, shared industrial vision, and human and
financial support. Top management support is essential
I. March-Chordà et al. / Technovation 22 (2002) 301–312
in the provision of human and financial resources allocated to the product team. This support from the top of
the organization is important to attract members for the
project team, to supply the necessary funding to facilitate
development, and to guarantee the continuation of the
project. Moreover, top management has the role of providing a clear strategic direction, which includes an
adequate management of technology and innovation.
This factor suggests that each firm should build its own
technological strategy, closely linked to its corporate
strategy, as an indispensable element to guarantee a
flexible and continuous development of product innovation.
McGrath (1994) analyzed a formulation of new product strategies including factors such as time, technological change, globalization, product differentiation,
price and marketing, as well as types of strategies. Along
these lines, the recent study by Markides (1997) offers
the following ways to develop an innovation on a strategic level: redefine the business, redefine potential
users, redefine the distinct capacities of the firm, which
user needs will be satisfied and how. Another success
factor associated with top management is to create a
shared entrepreneurial vision, which consists of
developing and communicating with clarity the entrepreneurial aim, in a way that extends quickly and reaches
all the levels of the organization. Also, delimiting the
range of tasks and responsibilities of each member of the
organization. The creation of this task is an obligation of
the top management and must be constructed fundamentally of three elements. The first two, clarity and straightforwardness, and continuity of purpose, imply that
despite the changes business goes through the same strategic objectives and values. The third element, coherence
of application, is proposed with the intention that every
member of the organization shares the same vision
(Barnett and Ghoshal, 1991).
2.2. Product development planning and process
This group of factors, which as suggested by the
literature is like good planning, overlapping in product
development, the cross-functional team and technologies, refers to the process of innovation itself. As factors of success associated with the process of development of innovation, the necessity of making ordered and
formal plans for product development is important. This
factor usually has a dubious acceptance among
enterprises, at least from the results of empirical studies,
which suggest a development process much less planned
and formalized than the literature recommend in this
field. So a study made in Spain (Vázquez and Santos,
1998)1 outlines that out of 13 phases in the product
1
This sample from Spain included 52 electronics and telecommunication firms and manufacturers of hardware equipment. The study was
implemented between May and June 1995.
303
development process set up by Cooper (1994), only 11%
of firms implement all of them, while 54% implement
nine or less.
The comparative study of Martinez and Navarro
(1991) between Spanish and Canadian businesses2
shows that in both cases the number of firms that
implement all the activities for the development of a new
product is very low, the majority of them performing
between seven and nine activities out of the proposed
13 of Cooper and Kleinschmidt (1987). In addition to
elaborating on an extensive plan, the development of
overlapping stages is recommended. The simultaneous
execution of the various stages of product development
in no way improves the result of the process as compared
to sequential planning (Nonaka and Tackeuchi, 1995).
In the sequential approach, the new product development process is made sequentially, with a group of functional specialists that transfer the final result of their
work to the next group. The functions are classified
according to the division of the work. One of the main
drawbacks of this approach resides in the length of time
necessary to develop the product. In the case of an overlapping process or rugby style process, the product
development process requires constant interaction of a
multidisciplinary team whose members work together
throughout the process. The overlapping model works
better in ambitious companies that want to develop new
products quickly and flexibly. Directly related to the previous factor is the multifunctional and self-regulated
team composition.
Various empirical studies support the idea that multifunctionality is associated with a higher ‘performance’,
like Dougherty (1992) and Zirger and Maidique (1990).
A multifunctional team can be defined as a group that
develops a common project and where members are
from more than one functional area, generally from the
areas of marketing, R&D, engineering and production.
This diversity of functions enriches the volume and variety of information and knowledge within the group. The
dialogue and proximity of the members when developing
the project help to accelerate the process of development
of new products, thereby overcoming problems more
quickly. Also the integration inside the team should be
developed.
An important element in the composition of teams
apart from multifunctionality is the presence of Gatekeepers, or individuals that frequently obtain external information and share them with team members. Similarly, a
multifunctional team affects the performance, by
increasing the quality and variety of available infor2
This second study was conducted in 1986 Aragón (Spain) and
included 56 firms of which 82% were SMEs. The sectors pertaining
to the study were basically mechanical, electrical and electronics. The
study carried out in Canada, with which some of the results are compared, can be found in Cooper and Kleinschmidt (1987).
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I. March-Chordà et al. / Technovation 22 (2002) 301–312
mation. Brown and Eisenhardt (1995) argue that
although the team will be capable of self-regulation, top
management should closely monitor with what is known
as ‘subtle control’. The underlying idea of this concept
rests on the members of the distinct project teams
enjoying sufficient freedom to work autonomously. They
have the ability to solve their problems creatively, while
simultaneously exercising sufficient control to ensure
that the product or result adjusts to the vision and strategy of the firm.
2.3. Analysis of market requirements
This group of success factors includes identification
of target markets and potential customers. They are
based on the necessity of implementing a profound
analysis to determine the real needs of the market. A
detailed analysis on the needs of a potential user is vital
in adjusting the process of creativity and development
of the new product to the real user needs that are insufficiently covered by existing products. Secondly, the
need for a rigorous and realistic analysis of the time
needed to distribute the product to the market should
be analyzed. A shallow optimistic analysis of the time
necessary to achieve a broad distribution of the new product will reduce the profit by increasing the wastage of
resources and level of debts. Finally, this group of factors requires a reliable estimate of the size of the potential market for the new product.
In the context of increasing competition in global markets, the firm that manages to accelerate the period of
development of new products or processes will place
themselves ahead of the competition. The study by
Gupta and Wilemon (1990) offers a wide range of
explicit reasons for the success of new products, deduced
from interviews conducted with high technological
firms, that allow a more rapid advance in the process
(Smith et al., 1995; McGrath, 1996): (i) an increase in
competitive pressures which force an anticipation of the
development of new products if profit levels are to be
met, (ii) rapid or sudden technological changes that
make obsolete the existing technologies, (iii) variations
in consumer demand, (iv) growth objectives, (v) necessity of obtaining a market share, (vi) shortening of product life cycle, (vii) pressures from top management, and
(viii) facility for the taking up of new ideas.
Interestingly, Wilson (1995), Bobrow (1997) and
Bowen et al. (1994) have provided models or frameworks to cope up with the challenges in the development
of products and promotion of innovation. These studies
are intended to shed lights on the increasing complexity
of the business environment and its implications on the
new product development process. Dougherty (1992)
identified barriers to successful product innovation in
large firms. In the same line of research, there are several
research papers to deal with innovation and product
development in large-scale firms (Bowen et al., 1994;
Bruce and Biemans, 1995; Gupta and Wilemon, 1990;
McGrath, 1994; Smith et al., 1995; Vázquez and Santos,
1998). It appears that there are no specific studies that
deal with the innovation and new product development
process in SMEs. However, considering the role of
SMEs, an attempt has been made to develop a conceptual model based on the literature survey and validate
the model with an empirical study in Spanish SMEs.
We have developed a conceptual model based on the
classification criteria of literature on new product development (see Fig. 1). The purpose of the model is to highlight the key critical success factors in new product
development and adopt the same for analyzing the product development process in SMEs with the help of an
empirical analysis.
The model presented in Fig. 1 focuses on top management support, product development planning, and the
process of analysis of market requirements for the product development process. The reasons for selecting
these three major CSFs are: (i) the obstacles to various
innovation and product development processes can be
overcome by these factors, and (ii) these can be easily
understood and stay focused to improve the product
development process. The model lists various factors
that come under the three major CSFs, taking into
account the barriers for innovation and the product
development process in SMEs (Zirger and Maidique,
1990; Dougherty, 1992; Rosenau and Moran, 1993;
McGrath, 1994).
Considering the lack of empirical studies available in
the literature to identify the CSFs for the product development process in SMEs, the list of CSFs as highlighted
by the conceptual model has been analyzed with reference to the data collected from Valencian SMEs in
Spain. We seek to find out evidence on the degree of
fulfilment of the success factors highlighted by the literature, by focusing on the presence of obstacles to new
product development in manufacturing SMEs. This
approach, focusing on the obstacles, is original compared with existing methods.
The level of influence of different obstacles on the
innovation and product development processes varies
from sector to sector. This has been considered when we
study the implications of various obstacles in a range of
industries. The purpose of this analysis is to highlight
the major obstacles to innovation and product development and bring to the fore the reasons for differences
based on the characteristics of sectors. Also, a comparison on the behaviour of industries with reference to each
variable is presented.
3. Research methodology
Given the importance of developing new products in
any firm, the empirical study presented here aims to
I. March-Chordà et al. / Technovation 22 (2002) 301–312
Fig. 1.
A conceptual model for the critical success factors of product development planning and processing in SMEs.
identify the major factors that act as barriers in the
innovative process of the enterprise, as well as in the
process of development and promotion of new products.
We incorporate in our research an approach by sectors
of activity. A detailed questionnaire3 has been used for
collecting data by interviews.
(iii)
3.1. Research objectives and questions
(vi)
The first objective is to identify enough evidence on
the above mentioned success factors in the new product
development process. The second objective lies in establishing the influence of obstacles and the impact of failure on the development of new products on a sectorial
level in a region of medium development such as exists
in Valencia, Spain. The main aim here is to obtain a
sectoralized profile of the firms’ performance in the
development of new products in order to reveal intersectorial divergences. Finally, an attempt has been made
to distinguish the degree of accomplishment of the three
groups of factors as well as determining new factors that
are little recognized in the literature, but which seem to
influence the process of development significantly. The
following questions will be addressed through the
empirical study:
(i)
(ii)
3
305
What are the major determinants of innovation
and new product development in SMEs?
How are the barriers for innovation and product
development grouped based on the above
major determinants?
The questionnaire is available from the authors upon request.
(iv)
(v)
How does each barrier/obstacle influence a
range of sectors for innovation in SMEs?
How is each sector affected by the set of
obstacles for innovation?
How does each barrier/obstacle influence a
range of sectors for product development planning in SMEs?
How is each sector affected by the set of
obstacles for product development planning?
These questions are addressed with the data collected
from Valencian Industrial Network.
The criteria considered to address these three research
questions include determining the level of presence of
some factors that stand in the way of innovation in the
surveyed firms. A low incidence of setback factors is
equivalent to a high degree of accomplishment in the
associated success factors. This form of inverse research,
demonstrating the fulfilment of success factors from a
negation of the opposite situation to that which we want
to contrast, seems to be more reliable than the direct
question.
3.2. Data collection
Each of the 65 firms was visited and the interviews
were conducted with the top managers and sometimes
with the production managers. An open questionnaire
was used to collect the data, which means some questions were directly asked and received answers. Other
answers were derived after asking indirect questions or
observing the way the company operates, the culture,
and other indirect indicators. This type of data collection
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I. March-Chordà et al. / Technovation 22 (2002) 301–312
is justified as the questions to be addressed are qualitative in nature.
Since the research methodology includes a personal
interview with a manager, an approach based on direct
questions about the degree of accomplishment of the
success factors could have provoked a defensive attitude,
with positive answers to all the questions, as managers
are reluctant to recognize openly their own limitations.
Therefore, it was agreed to go for the approach based
on obstacles as the most appropriate means of analyzing
the process of development and innovation in the Valencian Industrial Network.
Once the factors or variables were identified under
analysis, the interviewer was responsible for assigning
the scores for each of the variables. These variables were
not scored directly by the interviewed person, but by the
interviewer, once all the explanations and perceptions
declared by the manager during the interview had been
analyzed. The scales ranged from a minimum of 1 to a
top score of 5. A score of 1 means absolute lack of
fulfilment of that variable, whereas 5 implies a total
fulfilment or the presence of that variable.
istry and plastics), and strong demand sectors (four sectors: machinery, metal mechanics, electronics and
optics), although over half of the companies surveyed
fall within the weak demand groups (36 firms). (iii)
Medium sized firms in the Spanish context: all firms
with between 50 and 500 employees. The only exceptions to be included in the sample were two firms with
fewer employees. In terms of turnover, practically all
firms exceed US$8 million and only one company is
over US$100 million. (iv) Manufacturing companies: all
surveyed firms are basically involved in manufacturing
activities. (v) Proved dynamism within their activity segment: firms displaying a clear willingness to grow and
consolidate in the markets were prioritized. (vi) Outward
looking inclination: surveyed firms should account for
good records in foreign markets or at least have
attempted to sell abroad. These six selection criteria
seemed the most suitable to obtain a sample of firms
sufficiently diverse and rich, illustrative of the Valencian
industrial base. That goal incited us to leave out any
other firm below a minimum size or with a very backward business strategy.
3.3. Profile of the companies participating in the
study
3.4. Analysis of results
In total, 65 SMEs in the Valencian Industrial Network
were considered for this empirical study. Details of the
industries participating in each sector are presented in
Table 1. Some sectors are represented by more firms
than others. The number of firms in each sector has been
chosen on the approximate weight that the sector holds
in the province of Valencia.
Selection criteria to be met in order for the firms to
take part in the survey were as follows. (i) Diversity of
sectors, including the most representative sectors of the
Valencian manufacturing industry and a couple of
emerging sectors still a minority in the region
(electronics and optics). (ii) Diverging demand prospects
in international markets. The plan was to cover activities
pertaining to a range of sectors: weak demand sectors
(six sectors: food 1, food 2, food 3, furniture, textiles
and paper), medium demand sectors (two sectors: chem-
The model developed highlights the major critical success factor groups and the detailed obstacles considered
under each group are presented in Table 2. The empirical
data has been collected based on a set of predetermined
variables that act as barriers to innovation and product
development. However, the overall conclusions are
based on the three major CSFs of innovation and product development.
There is some overlapping between variables that act
as barriers to innovation and the product development
process. These variables have been studied with reference to sectors and factors that have implications on the
new product development process.
4. Empirical results and analysis
The results relative to obstacles to innovation and to
the process of product development, including the analysis of their corresponding items, are described below.
Table 1
Sectors and number of companies participating in the empirical study
Sector
Number of firms
Sector
Number of firms
Food 1: Beverages including juices, wines,
liquors, preserved vegetables and dairies
Food 2: Perishable food including rice,
cookies, chocolates, biscuits and coffee, etc.
Food 3: Fish and meat processing
Chemical
Plastics
Paper
7
Textiles
8
5
Metallurgy
9
4
5
6
9
Machinery
Optics
Furniture and wood
4
2
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I. March-Chordà et al. / Technovation 22 (2002) 301–312
307
Table 2
Obstacles for innovation and product development under the major CSFs
CSFs group
Barriers/obstacles
Top management support
Excessive cost associated with the projects of innovation; lack of top management support; fear of
failure due to previous attempts by other firms; failure rate of product innovation (lack of clear
strategic direction)
Technical uncertainty; multidisciplinary team; overlapping approach; problems associated with the
failure of the product innovation; process development of new products; period of development of
new products related to the most significant innovation of the firm in the last 15 years
Conservative attitude of the market; uncertainty of market acceptance; period of useful product life
before undergoing modification or significant improvements; duration of the product total life cycle
until definitive replacement
Product development planning and
process
Analysis of market
requirements/demand
4.1. Obstacles to innovation
The obstacles considered in this study for innovation
are listed in Table 3. Apart from these six possible
motives (variables A1–A6), other possible motives not
set out in the questionnaire are also considered. The
managers consulted mainly outlined the fear of rapid
imitation by competitors together with the uncertainty
about the period of development of innovation. More
frequently mentioned factors were non-supportive top
management (A3) and previous failed attempts by other
firms (A4). Other factors that were sporadically mentioned by some firms include industrial cutbacks and
rationalization (in the food sector) and the necessity of
being authorized by public administration (in some firms
in the chemical sector).
Besides determining the main obstacles to innovation,
the impact of hypothetical failure in innovation on the
trajectory of the firm is also considered. The other two
factors (A7 and A8) deal with the failure rate of product
innovation with the following options and problems
associated with the failure of the product innovation (that
have caused or could cause), respectively. All the results
for variables A1–A8 are presented in Table 4.
Table 3
Obstacles to innovation — variables
Variables
Description
A1
A2
Technical uncertainty
Excessive cost associated with the projects of
innovation
Lack of top management support
Fear of failure due to previous attempts by other
firms
Conservative attitude of the market
Uncertainty of market acceptance
Failure rate of product innovation
Problems associated with the failure of the
product innovation
A3
A4
A5
A6
A7
A8
4.1.1. The obstacle-wise analysis of sectors
In this section, the obstacles for innovation are analyzed with reference to each sector (Table 4). At first
glance by column, factor A2 (excessive cost of product
innovation implementation, 3.69) and A6 (uncertainty of
market acceptance, 2.93) are particularly highlighted.
Therefore, we can assert that the cost of development
of the innovation and the possibility of receiving less
acceptance than expected in the market, are two primary
bottlenecks in innovation activity for the group of analyzed firms.
With a score over 4, the optics, electronics, ceramics,
paper, chemical and metallurgic sectors are especially
geared to A2. Only the textile and food 1 industries give
a secondary relevance to this factor with a score under
3. These are sectors with little inclination to promote
new products and models, usually implementing lowcost minor changes in design. Problems related to market
acceptance (A6) affect primarily the electronics sector
but also have influence on mature sectors. The textile
sector and in particular the confectionery industry fear
this factor given the importance of fashion and design
as clues for the acceptance of new models. Finally, the
relatively high concern towards market acceptance in the
plastics sector responds more to the conservative character of their regular clients, usually being industrial firms
or service and distribution firms.
Technical uncertainty (A1) reaches an average of
2.25. The firms whose products have a higher technological content are those more inclined to cite this factor
as an obstacle to innovation. The electronics and optics
sectors, clearly intensive in technology, assign a score
of over 3 to this factor. Following them we find the
chemical and textile industries, whose technical uncertainty is more associated with changes occurring in the
production process related to new product needs. Rather
than the lack of projects with technological content, the
strong self-confidence in technological issues probably
lies behind the little importance that a highly technological sector such as machinery assigns to this factor. The
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I. March-Chordà et al. / Technovation 22 (2002) 301–312
Table 4
Obstacles to innovationa (variables A1–A8)
Food 1
Food 2
Food 3
Chemical
Machinery
Plastics
Furniture
Textiles
Paper
Metallurgical
Electronics
Optics
Average
a
b
c
d
A1
A2
A3
A4
A5
A6
A7
A8
Average
1.86b
2.2
2.25
2.6
1.5
2
1.78
2.38
1.67
2.33
3.67
3
2.25d
2.71
3.6
3.75
4.2
3.5
3.67
3
2
4.33
4.11
4.33
4.5
3.69
1.57
1
1.5
1
1.25
1.33
1.22
1.75
2
1.44
1.33
1
1.39
1.71
1.2
1.5
1
1.25
1.33
1.33
1.63
1.33
1.56
1.33
1
1.37
2.43
2.4
2.25
2
2
1.33
2.33
2.63
1.33
1.67
1.33
1
1.87
3.14
3.4
3
2.8
2.75
3.17
2.56
3.13
1.67
2.78
4.33
3
2.93
1.86
1.4
2.75
2.4
2.25
2.33
2
2.63
1.67
1.44
3
3.5
2.27
2.57
3
2.75
2
2.25
2.67
2
3.13
1.67
2.11
3
3.5
2.59
2.23c
2.27
2.47
2.25
2.09
2.23
2.03
2.41
1.96
2.18
2.79
2.56
2.30
Each firm was scored for each variable using a scale of 1–5 (1 means total lack of fulfilment; 5 means total presence of that variable).
For food 1, the score 1.86 for A1 means that seven firms of this sector have obtained an average score of 1.86 in this variable.
Average score in each sector considering variables A1–A8.
Average score for the 65 firms in each variable.
furniture sector, given its traditional character and products with its standardized raw materials and production
processes, together with the plastics sector, show a subcontracting nature and technological dependency on the
suppliers of raw materials. The food sectors assign less
relevance to technological uncertainty as a setback factor
to innovation. Variables A3 and A4 have no score over
2 in any sectors. As can be seen in Table 4, the variable
A5 is also not especially significant with an average
score below 2.
The more intensive the involvement of the sector in
advanced technologies, the higher the failure rate in the
innovation of products (A7 and A8). This is the case for
electronics and optics. Also high is the failure rate in
other sectors subjected to changes in fashion like the
textile sector. In contrast, the food 1 and 2, metallurgical
and paper sectors are hardly affected by the failure in
innovation because of their subcontracting nature. Low
tendency towards innovation offers a reasonable explanation for this behaviour.
Variable A8 tends to gauge the scope of the problems
associated with failure in product innovation including
those that have been caused or could be caused. Again
the optics, electronics and textile sectors recognize their
greater exposure to failure with new products, which in
turn has a higher impact on the trajectory of the firm.
Conversely, the sectors more immune to failure problems in innovation are the ones showing a lower rate of
product innovation: paper, furniture and chemical sectors.
4.1.2. The sector-wise analysis of obstacles
On examining the rows of Table 4 we are able to analyze it sectorially. The sectors with a higher average
score are electronics and optics, with scores slightly over
2.5. From these results, it can be concluded that more
pioneering firms in the development and promotion of
new products are more exposed to obstacles to innovation.
The electronics sector has an average close to 3
because of the high score assigned to variables A2
(excessive cost associated with the project of innovation
and technological uncertainties) and A6 (uncertainty of
market acceptance). For their part, the two optics firms
assigned the maximum score to variable A2, medium
importance to variables A6 and A1 (technological
uncertainty) and finally, a minimum score of 1 to the
other three factors. Moreover, innovation failures in this
sector hold a high incidence in the trajectory of the firm
(A7 and A8).
The average scores of food 3 and textiles come next,
with a similar pattern between them. The food 3 sector
(meat and fish segments) express their fear of the cost
of the project (A2), the market acceptance, and to some
degree, the technological uncertainty and conservative
attitude of the market. In general, the overall food sector
(in each of three subsectors), together with the textile
and furniture sectors, is where the conservative attitudes
of the market (A5) acquire certain relevance as a discouragement factor in the promotion of novelties.
In the textile sector, the low impact of the cost of
innovation projects (A2) with a score of 2, is attributed
to the lack of authentic innovation projects. Innovation
in this sector is more inclined towards changes in modeling and design. Major changes in aspects other than
design and combination of weaves, are very unusual.
The average in textiles, slightly higher than the mean, is
due to a great extent to the failure in product innovation
and problems associated with such failure (A7 and A8).
This is because the firms’ results are dependent on the
I. March-Chordà et al. / Technovation 22 (2002) 301–312
market acceptance of new catalogue products throughout
the seasons.
The paper, furniture and machinery sectors are the
least exposed to the obstacles of innovation with an average score of around 2. Nevertheless, the motives of this
low incidence show a disparity. The low impact in the
machinery sector is associated with a high level of control of technologies that reduce the technological uncertainty and which together with its subcontracting nature,
reduce the obstacles related to market acceptance. The
low impact on the paper sector is associated with its poor
innovative potential, its technological dependency on the
suppliers, and its subcontracting nature in the majority
of cases. Finally, the furniture sector is a rather stable
and traditional sector with a low potential for product
innovation, not going further than simple design modifications. Also the high rate of segmentation in this sector makes it difficult to penetrate new segments through
the development of new products.
4.2. Development and launch of new products
The problems surrounding the development and
launch of new products in the sample of firms under
study are considered. Table 5 presents the variables considered for the development and launch of new products.
Sectorially, the results obtained for variables A9–A12
are summarized in Table 6.
4.2.1. The development-wise analysis of sectors
The promotion of new products (A9), varies between
a minimum value of 1, for those products that are promoted almost immediately following the initial idea with
almost no development process, up to the maximum
value of 5, which indicates a lengthy procedure involving the teams of all the firms’ departments in the development and promotion of the product. The average value
achieved by this variable is around 3.5, which indicates
that the most used sequence between the surveyed firms
is ‘Original idea–brief development–prototype–fabrication’. This result corresponds to the results obtained
for other studies (Martinez and Navarro, 1991; Vázquez
and Santos, 1998). In all three cases the process of proTable 5
Product development planning — variables
Variables
Description
A9
A10
Process development of new products
Period of development of new products related to
the most significant innovation of the firm in the
last 5 years
Period of useful product life before undergoing
modification or significant improvements
Duration of the product total life cycle until
definitive replacement
A11
A12
309
duct development is quite simple, not covering several
of the phases proposed in the more complete models. On
a sectorial level we find a wider divergence. The firms
using the more advanced technology such as electronics,
optics and machinery, achieve a higher score equal to or
over 4, which denotes a more complex process of product promotion with more phases and with the participation of various agents. In contrast, the paper sector
shows, with a score of 2, a simple and shorter process
of product development with less phases.
The average score for the period of development of
new products (A10) is 2.62. This value represents a duration of between 2–6 months and 6 months–1 year,
which can be considered a short to medium duration
term, associated with a rather low complexity in the
development of new products. Only the food 2, machinery and electronics sectors take a year to obtain new
products. The unexpectedly long duration of product
development in a traditional sector like food 2 is
explained by the incidence of some expensive projects
implemented by a couple of larger firms represented in
such a sector. On the other hand, in the other two sectors,
longer product development time is due to the need for
continuing technological development activities. In contrast, paper, furniture and food 3 are those sectors which
require less time for new product development, for the
most part due to the continuity of their product range.
The firms in the paper sector are compelled to follow the
wishes of their clients with a minimum variation index in
their orders. The rapid development of new products in
the furniture sector only requires the participation of
design activities. Food 3 (meat and fish), by virtue of its
frozen or fresh condition, is subject to minimum product
elaboration which mainly represents new combinations
of ingredients.
The variable A11 refers to the period of the product’s
useful life before undergoing any modification or significant improvements. The average is quite high (3.67),
which represents a useful life closer to 3–5 years than
to 1–3 years, a period that can be considered fairly long
in the actual context of rapid obsolescence and shortening of the life cycle of products. In some sectors this
period is rather lengthy, without the implication of damaging innovate activity, but by being unnecessary to
modify the products in order to maintain a competitive
place in the market — as is the case for the paper and
food sectors. Conversely, in other sectors products
remain unchanged probably for longer than they should
(as in the case of furniture and optics). Without doubt,
the sector with the most rapid introduction of changes
in its products is textiles, with a much higher frequency
than the rest due to higher influence of temporal
fashions. Next, with a modification period a little shorter
than the average, the electronics and metallurgical firms,
which are subject to rapid technological progress that
leaves products obsolete a short time after having been
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Table 6
Product development planninga (variables A9–A12)
Food 1
Food 2
Food 3
Chemical
Machinery
Plastics
Furniture
Textiles
Paper
Metallurgical
Electronics
Optics
Average
a
b
c
d
A9
A10
A11
A12
Average
3.43b
3
3.75
3.6
4
3.17
3.22
3
2
3.56
4.33
4
3.42d
2.71
3.4
2.25
2.6
3.25
2.5
2.22
2.63
2
2.33
3
2.5
2.62
4.14
4.8
3.5
3.6
3.5
3.83
3.67
2.38
4.67
3
3
4
3.67
4.43
4.6
4
4
4
3.5
3.67
2.13
4.67
3.22
3
4
3.77
3.68c
3.95
3.37
3.45
3.69
3.25
3.19
2.53
3.33
3.03
3.33
4
3.37
Each firm was scored for each variable using a scale of 1–5 (1 means total lack of fulfilment; 5 means total presence of that variable).
For Food 1, the score 3.43 for A9 means that the firms of this sector have obtained an average score of 3.43 in this variable.
Average score in each sector considering variables A9–A12.
Average score for the 65 firms in each variable.
launched (Martinez and Navarro, 1991; Vázquez and
Santos, 1998).
Finally, the total life cycle of products up to definitive
replacement is defined by variable A12. The parallelism
between variables A12 and A11 is clear, having a value
of around 4, which represents a life cycle close to an
average of 5 years. The conclusions obtained for variable
A11 follow the same line as those for variable A12.
which manufactures typical seasonal products, thus the
rapidity of product development coexists with a life
cycle normally limited to the year. The scores for the
metallurgical, furniture and plastics sectors come next
with scores slightly over 3. In each of these there is a
relatively short period of new product development with
reference to the global average cycle time.
4.2.2. The sector-wise analysis of development
A second sectorial level analysis by rows (Table 4)
gives rise to the following conclusions: optics, food 1,
food 2 and machinery achieve scores clearly above the
general average. These are sectors with a long product
life cycle and are subject to few modifications. Food 2
shows a long development period of new products with
a score of 3.4, the highest among all the sectors in this
variable, as well as a lengthy period of useful life without undergoing modification (a score of 4.8, also the
highest). If these results meet with some justification in
the food sectors because of the long life cycle and the
mild pressure of demand to renew the product portfolio,
conversely, in the machinery and optics sectors, the
maintenance of long life cycles represents, in our opinion, an uncertain strategic decision, as these sectors are
faced with an uncertain technological and market
environment. With scores around the average are chemical, food 3, paper and electronics. The electronics sector
outlines the complexity of the new product development
process, with an outstanding score of 4.3. The paper sector shows results very similar to the general average in
the four variables, whereas food 3 deserves to be highlighted due to the low value achieved by variable A10
(period of new product development). The lowest scores
for variables A9–A12 correspond to the textile sector,
5. Summary of findings and conclusions
The present study firstly analyzes, by sector, the principal obstacles to innovation. Secondly, analysis of the
empirical results highlights the development process and
the launch of new products in 65 medium-sized manufacturing companies located in the Valencian region of
Spain.
The most common obstacles to innovation among all
the sectors are the excessive cost of maintaining the project of innovation (mainly for the optics, electronics,
paper, chemical and metallurgic sectors and only textile
and food 1 do not attach much significance to this factor)
and the uncertainty of market acceptance (mainly for the
electronics sector in first place, followed by the paper
sector and the three food sectors).
The excessive cost associated with innovation projects
is especially feared by the optics, electronics, paper,
chemical and metallurgic sectors. With the exception of
the paper sector, clearly subcontractors with a medium–
low level of technological development, the remaining
sectors are characterized by the use of medium and
advanced technologies, especially optics, electronics and
metallurgy. The cost of innovation becomes a serious
deterrent to new product development, especially in
those manufacturing sectors that are more advanced
I. March-Chordà et al. / Technovation 22 (2002) 301–312
technologically. The uncertainty about foreseeable market acceptance constitutes the second major obstacle to
innovation in all surveyed firms, although with a wide
disparity in incidence according to the sector. In this
second obstacle, electronics is the most affected sector,
followed by food, textiles and plastics. Finally, as
expected, technological uncertainty (factor A1) has little
incidence in the sectors, except for those sectors with
greater technological content in their products such as
electronics and optics.
With reference to the process of development and promotion of new products, contrary to what the theoretical
studies recommend, the most frequent sequence is rather
simple and short: ‘original idea–brief development–
prototype–fabrication’. The average new product development time is around 6 months, categorized between
short and medium term and with low complexity. On the
other hand, the high standard deviation obtained shows
the wide degree of variation in the development time,
depending on sectors, and even across firms within the
same sector.
The sector that introduces the most rapid changes in
its products is, as expected, the textile sector, due to its
seasonal character and strong fashion dependence. Next
are the electronics and metallurgical sectors, facing rapid
technological obsolescence of their products. In the
remaining sectors, products are maintained without
changes for longer periods, around 3 years as a general
rule. The definitive replacement of products occurs, on
average, 5 years after their launch, which indicates a
long life in the current competitive context. The longest
cycle corresponds to the paper sector followed by segments of the food sector. In comparison to this is the
rapid replacement of products in the textile sector, as a
consequence of the products’ seasonal character.
Following the empirical analysis with a sample of 65
firms, the following conclusions can be derived with reference to the three groups of success factors for the
development of products.
Top management support. Support given by top management to the development process, which seems to
have been satisfactorily fulfilled. This positive result
must be clarified in the sense that the managers, who
have evaluated top management as a setback factor
or as a revitalizing force in the development process
of new products, display a clear tendency to overvalue their contribution in the process of product
innovation. A more impartial reading from the criteria
suggests a lower degree of fulfilment in this first
group of success factors. In this empirical study, the
project cost clearly appears to be the main factor that
discourages commitment to new product development
projects. This factor is directly linked to the firm’s
general strategy, the system of priorities and the
investment policy defined by top management. From
311
this perspective, the defined posture of top management decisively influences the possibilities of product
development innovation.
Product development planning. This second group of
factors related to the process of development shows
a relatively low level of achievement in accordance
with the reduced time that the majority of firms dedicate to the conception, development and final launch
of new products. Very few companies follow a formalized and ordered plan in such processes, which
is somewhat distant from the postulated theories that
support a process having more than 10 phases. On
the other hand, most of the surveyed companies, as
recommended by the consulted studies, seem to support the interaction between participating agents in the
development process to the detriment of sequential
models. Therefore, the multifunctionality, autonomy
and capacity for self-regulation fail to reach the levels
suggested by the reviewed literature. However, technical factors seem to have an influence on the success
or failure of new products, probably greater than
recognized in the consulted studies.
Analysis of market requirements/demand. The third
group of factors related to demand and the market
appear to be the most difficult to achieve, becoming
the most feared of setbacks to the development process of new products and those which explain more
directly the failure of product innovation. Effectively,
uncertainty over market acceptance reaches the
second highest score after the cost of innovation.
Finally, the conclusions obtained are in accordance
with the results proposed by the majority of empirical
studies consulted, although our study indicates a
greater emphasis on the cost of new product development even ahead of fears over market response.
Remarkably, the tendency of the trajectory of the
company, and to prolong the product’s life cycle for
longer than desirable, were especially prevalent in
sectors of low or medium demand.
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Dr Isidre March-Chordà is a senior lecturer at the Department of Business Administration, University of Valencia. In 1991, he was awarded an
MSc in Technology and Innovation Management at the SPRU and a Doctorate in 1994. Dr March-Chordà is the editor of several books on innovation and technological diagnosis. Since 1996, he has conducted several
research projects on innovation audits at the sectoral level in the Spanish
region of Valencia. Dr March-Chorda is the author of several articles in
international journals about NTBFs, technopoles and science parks, innovative entrepreneurs and the process of product innovation. Also, he is the
head of the research line “Innovation Management” at the University of
Valencia.
A. Gunasekaran is an associate professor of
operations management in the Department of
Management at the University of Massachusetts,
Dartmouth. Prior to this, Dr. Gunasekaran has
held academic positions at Brunel University
(UK), Monash University (Australia), the University of Vassa (Finland), the University of
Madras (India), the University of Toronto, Laval
University, and Concordia University (Canada).
He received his PhD (in industrial engineering
and operations research) in 1987 from the Indian
Institute of Technology (Bombay). He teaches
courses in operations management and operations research. Dr Gunasekaran has had over 150 articles published in journals such as the International
Journal of Production Research, International Journal of Operations and
Production Management, Computers in Industrial Engineering: An International Journal, European Journal of Operational Research, Management
Decision, International Journal of Production Economics, Journal of Operational Research Society, International Journal of Technology Management, Technovation and Computers in Industry: An International Journal.
He has presented over 50 papers at conferences and given a number of
invited talks in more than 20 countries. Dr Gunasekaran is on the editorial
board of over 20 prestigious journals that include the International Journal
of Productions Planning and Control, International Journal of Systems
Science, Computers in Industry: An International Journal, Technovation,
Journal of Product and Process Development, Logistics Information Management, Business Process Management Journal, Journal of Operations
Management, Supply Chain Management: An International Journal, International Journal of Quality and Reliability Management, He has edited
special issues for a number of highly reputed journals which include the
International Journal of Production Economics, Journal of Operational
Research Society, International Journal of Operations and Production
Management and International Journal of Computer-Integrated Manufacturing. He reviews papers for over 25 journals. Dr Gunasekaran is involved
in several national and international collaborative projects that are funded
by private and government agencies. He has supervised more than 30 dissertations and several industrial projects. Most of the projects are based on
industrial applications. He is the editor of Benchamrking: An International
Journal and an associate editor of Integrated Manufacturing: The International Journal of Manufacturing Technology Management. Dr Gunasekaran is currently interested in researching agile manufacturing, concurrent
engineering, management information systems, technology management,
supply chain management, computer-integrated manufacturing, and total
quality management.
Begoña Lloria-Aramburo is an assistant lecturer at the Department of Business Administration. She is just about to complete her PhD
in knowledge management assessment, and she
has authored several articles in specialized
Spanish journals. She is a key member of the
research line conducted by Isidre MarchChordá, participating in several research projects in the innovation management field.