How product advantage influences new product performance: an empirical investigation on the nature of product advantage and its’ relationship with new product performance in small and medium-sized enterprises

This research identifies, clarifies, and evaluates the nature of product advantage and its relationship with new product performance in SMEs. Throughout this thesis a number of research objectives were presented and satisfied; the identification of the nature of product advantage in SMEs; an exploration of the nature of new product performance measurement in SMEs; and an assessment of the interrelationship between product advantage and new product performance in SMEs. In the achievement of the research objectives this thesis supports SMEs in their product advantage endeavours in maximising new product development success. A review of literature illustrates that ambiguity surrounds the nature of the product advantage and new product performance constructs in SMEs. This study identified the product advantage characteristics that maximise the level of new product performance in SMEs and provides a descriptive model of the manner in which product advantage can predict new product performance measurement outcomes. The mixed-method methodology adopted for this research employs a structured questionnaire as the quantitative research instrument to test the conceptual model and develop the descriptive model, and case studies as the qualitative research instrument to inform and further explore the research issue. This complementary research approach was selected to alleviate any weaknesses associated with each individual method and to facilitate greater interpretation and understanding of the research issue than would have been achieved in a single method study. The empirical findings demonstrate that product advantage is a heterogeneous construct comprising of; product innovativeness, product superiority and product meaningfulness components and that each component has a unique role in the development of new products. The product advantage strategy chosen by SMEs is influenced by firm size, customers’ level of involvement in the process, price, market uncertainty, technological uncertainty, competitive intensity and resource uncertainty. Additionally, SMEs use multi-dimensional sets of measures when measuring new product performance. These measures vary depending upon project and business strategy. No one measure is useful for all product types, nor across all firms, however it is wise to use objective customer acceptance measures as they are the only measures statistically found to influence new product success. The relationship between product advantage and new product performance is complex and consists of both direct and indirect interactions. Accordingly, the findings of this thesis will enable SMEs to better position themselves to effectively develop their product advantage strategy, and as such the competitive environment with large firms will become more equitable.