Opportunity Identification From NPD Failure

New product development(NPD) is a trial and error process, so many new product developments fail. Yet, when NPD fails, a considerable amount of information flows, and new opportunities often emerge in parallel with such failure. Why do some, not others, identify opportunities from NPD failure? Why do individuals identify different opportunities from the same stimuli? Prior research about the antecedents of opportunity identification mostly focuses on the role of entrepreneurs’ individual characters and behaviors. Little is known about the critical role of team level factors on individuals’ behavior. To fill this gap, we employ information-processing theory to explore the role of entrepreneurs’ regulatory focus on opportunity identification from NPD failure, and particularly explore the moderating role of NPD team’s transactive memory system between regulatory focus and opportunity identification. The results show that the promotion-focused entrepreneurs can identify more and more innovative opportunities from NPD failure, while the prevention-focused ones could hardly identify any opportunities. We also find that there is a positive relationship between specialization and opportunity identification. Additionally, credibility and coordination, yet not specialization, positively moderate the relationship between promotion focus and the number of opportunities identified. Specialization and credibility, yet not coordination, positively moderate the relationship between promotion focus and opportunity innovativeness. Particularly, none of the hypotheses about prevention focus is supported. Theoretical and managerial implications are discussed.