The Relationships Among Product Innovativeness, Strategic Orientations And Innovative Performance

Product innovation is one of the key driving forces behind economic development. It is also vitally important to the development and sustainment of competitive advantages of firms. The strategic orientation settings of a firm drive its new product development team to develop products with different innovativeness qualities, and different level of product innovativeness will in turn bring about different level of performance. The performance implication of matching strategic orientation to product innovativeness is therefore a major theme of product innovation management research.Based on the literature review of product innovativeness measurement and the strategic orientation-product innovativeness-innovation performance correlation chain, this thesis has postulated a product innovativeness construct that comprises of continuity and discontinuity constructs, and use the construct to build a strategic orientation-product innovativeness-innovation performance correlation chain. An empirical study using questionnaire survey was designed and conducted on a panel of Chinese machine-tools manufacturing firms. Survey results were statistically analysis to assess the correlation between elements of strategic orientation, product innovativeness and innovation performance.Firstly, the concept of discontinuity was applied to the definition of product innovativeness to generate a product innovativeness construct that comprise of discontinuousness, discontinuous advantage, continuousness, and continuous advantage. Using the construct, this thesis proposed a correlation model that comprise of market orientation and customer orientation as antecedents, the four product innovation elements as mediating factors, and product innovation as consequence. Working definitions of the factors in the model were specified to enable empirical analysis.Questionnaire was designed following the factor definitions to collect machine-tools product development project data. Structural Equation Modelling was used to calculate the magnitude and direction of correlation between factor pairs. Analysis results show that discontinuousness, discontinuous advantage, continuousness, and continuous advantage are independent and interrelated elements of product innovativeness. The interrelations are independent of firm size and ownership.Statistical analysis of the survey data confirmed that discontinuousness and continuousness have positive effect on discontinuous advantage and continuous advantage respectively. Continuous advantage positively affected innovation performance, while discontinuous advantage had no effect. Discontinuousness positively affected continuousness and continuous advantage, which implied that with the presence of continuous innovation, discontinuous innovation can enhance performance. The analysis also confirmed that customer orientation positively affect discontinuousness, while market orientation has no effect on any constituent factor of product innovativeness.Hiarchical regression analysis of the survey data confirmed that both technology turbulence and the customer turbulence element of market turbulence negatively moderate the discontinuous advantage-performance correlation.