If It Takes a Village to Foster Innovation, Success Depends on the Neighbors: The Effects of Global and Ego Networks on New Product Launches

Abstract

Launching breakthrough and incremental new products is vital to firm performance; it also resonates with both ego (i.e., directly connected partners) and global (i.e., interconnected ties in an industry) network perspectives. Prior research has listed several ego network-and global network-level factors that affect innovations, but this study goes a step further, to reveal the interactions of these factors as critical product launch mechanisms. An analysis of alliance networks in the consumer packaged goods industry from 1990 to 2010 shows that a central position in a global network represents a double-edged sword: it improves a firm's incremental new product launches but harms its breakthrough new product launches. Furthermore, a firm's ego network (manifested as density and diversity) and R&D capability enable it to leverage its global network position by enhancing the benefits for incremental new products and mitigating its hazards for breakthrough new products. This study's findings thus offer new insights into the role of ego and global networks in facilitating or hindering new product launches.

Research in marketing strategy

“…they do not examine phenomena within the marketing strategy domain delineated in our review framework-even though some of these examine phenomena that are within the general field of strategic marketing. In fact, the largest category of papers published in these journals (36%) contains studies of marketing tactics that examine one or two individual marketing program elements such as advertising (e.g., Fang et al 2016), product and price (e.g., Slotegraaf & Atuahene-Gima 2011;Steiner et al 2016), channel (e.g., Gooner et al 2011;Samaha et al 2011), and selling (e.g., Gonzalez et al 2014;Harmeling et al 2015) without examining or explicitly controlling for the remaining marketing mix elements.…”

Endogeneity bias in marketing research: Problem, causes and remedies

“…GMM approaches applied in marketing research provide further insights regarding controlling for endogeneity in panel data (e.g. Fang, Lee, Palmatier, & Han, 2016;Shah, Kumar, & Kim, 2014).…”

Entrepreneurial networking: a blessing or a curse? Differential effects for low, medium and high performing franchisees

“…An actor's position in a specific network can impose constraints or offer opportunities (Tsai 2001;Zaheer and Bell 2005;Reinholt et al 2011). An important concept reflecting the advantageousness of an actor's network position is betweenness centrality (Freeman 1977(Freeman , 1979Wasserman and Faust 1994;Fang et al 2016;Lai 2016). The higher the betweenness centrality of an actor, the more access it has to other actors and the more influence it has as an intermediary between other actors (Hanneman and Riddle 2005;Reinholt et al 2011).…”

“…The higher the betweenness centrality of an actor, the more access it has to other actors and the more influence it has as an intermediary between other actors (Hanneman and Riddle 2005;Reinholt et al 2011). The main argument is that central actors can act as an information gateway that disseminates and receives relevant information and knowledge throughout the network; as a result, the more central the actor, the greater its access to knowledge and other actors' best practices, which may positively affect this actor's performance (Soh 2010;Reinholt et al 2011;Fang et al 2016).…”