Impact of Strategic and Entrepreneurial Orientations on New Product Development

Abstract

In current business scenario, success of the business does not only rely upon the profit of the organization. It depends on how much the company is capable for capturing the need of the customer. For catering to the need of the customer is directly dealing with providing new products which have the capability of providing benefits to the end users. It is an inter-linked sequence of information processing tasks where knowledge of customer needs is translated into final product design (Meybodi, 2003). New product development is one of the most powerful but difficult activities in business (Clark and Wheelwright, 1995).The new product development also can be identified as a key indicator of the success of the business organization. Therefore, each and every business firm should have to concentrate highly on the new product development process as it becomes a strategic weapon of the success of the organization. Business managers and marketing academics alike agree that an essential element of an organization’s long-term survival is success in new product development. Therefore, scholars have devoted their required attention to identify the factors affecting new product development and to bring out several factors in their several investigations.

Furthermore, it is widely known that strategic orientation is important as one of determinants to improve company performance. Several studies have been conducted to find the relationship between strategic orientation and the firm performance. However, very little of study consider this factor as one of the contributing factors in improving new product development process.

Entrepreneurial orientation is defined as a firm’s processes, practices and decision-making activities, by which the firm embarks on proactive and aggressive initiatives to alter the competitive scene to its advantage (Atuahene-Gima and Ko, 2001; Zhou et al., 2005). It is clear that entrepreneurial firms are engaging the continuous innovation of new product. As proposed by Lumpkin and Dess (1996), firms adhering to an entrepreneurial orientation focus on grasping new market opportunities and proactively competing with their rivals, thus undertaking greater risks. Entrepreneurial orientation can be considered as one of driving factors in new product development.

Thus this research has to be conducted to find out the effect of strategic orientation and entrepreneurial orientation on new product development in food and beverage sector in Western province. The relationship between strategic orientation and entrepreneurial orientation on new product development will be identified.

Methodology

For the purpose of this study, the listed food and beverage companies have been selected as the population out of twenty listed companies’, tobacco sector has been disregarded because of limitation to collect data. Except tobacco sector, all other nineteen (19) companies have been selected for the data collection process.

Set of questionnaires and telephone conversations have been utilized as the data collection methods. In order to have a better understanding the data have been collected from marketing managers, operation managers and those who have been involving greatly in new product development process. Questionnaires have consisted with five point Likert scale, open ended and close ended questions and it has designed as self-administered questionnaire. Customer orientation, competitor orientation, technological orientation and inter-functional coordination have been selected as the strategic orientation dimensions and innovativeness, pro- activeness and risk taking were the entrepreneurial orientation dimensions. Hypothesizes have been built in order to achieve the established objectives as well. Data analyzing has been done in order to achieve the research objectives and Statistical Package for Social Science (SPSS 16) and Microsoft Office Excel (MS Excel) packages have been used to analyze and interpret the research findings.