Strategic Value Assessment and Explorative Learning Opportunities with Customers

Abstract

This study recognizes that collaboration with customers for new product development may bring important financial benefits to firms, but at the same time may seriously hamper explorative learning. Many firms are approached by customers with requests to develop new products for them. While such requests may strengthen customer relationships and result in short‐term financial gains, it may force a firm in technologically undesirable directions. As a result, many firms struggle with the dilemma of, on the one hand, responding to customer requests, and on the other hand, safeguarding the long‐term competitive position of the firm. Firms with strong customer ties are particularly prone to this dilemma. Drawing on opportunity recognition literature, capability monitoring literature as well as goal setting theory, the authors have developed a framework arguing that Strategic Value Assessment (SVA) can help resolve this. SVA is defined as an a priori business evaluation of the value of a particular innovation collaboration, based on anticipated long‐term strategic benefits. It helps innovative firms to focus on collaboration with customers with lead user status and to develop intense relationships, allowing for more effective knowledge transfer and learning. The framework is tested using data collected from a sample of 136 business‐to‐business firms in the Netherlands. The sampling frame was a panel of small and medium‐sized high‐tech enterprises. The study finds positive direct and indirect effects of SVA on explorative learning. In addition, the findings show that the intense collaboration/learning relationship is positively moderated by customer lead user status, and negatively moderated by customer dependence. The findings suggest that SVA is a useful heuristic for managers to utilize opportunities for innovation involving collaboration with customers.

Foreign and Domestic Collaboration, Product Innovation Novelty, and Firm Growth

“…In regard to collaboration with foreign customers, firms should carefully consider the purpose of collaboration and its long‐term innovation effects. As the literature suggests and as indicated in this study, collaboration can occasionally constrain the exploration of new technological and commercial opportunities (Nijssen et al, ). Firm managers should also consider that collaboration with domestic suppliers appears to be beneficial for incremental innovation while constraining radical innovation.…”

“…For customers, such contributions may differ, however, depending on whether a firm collaborates with lead users or mainstream customers (Herstatt and Hippel, 1992). For instance, collaboration with mainstream customers might push a firm toward unattractive technological paths that focus on improving existing products while neglecting the development of competences that lead to radical product innovation (Chatterji and Fabrizio, 2014;Nijssen, Hillebrand, de Jong, and Kemp, 2012). In contrast, lead users experience needs ahead of the rest of the population, and are often involved in the development of technological solutions aimed at satisfying needs not met by existing products.…”

SMEs and Marketing: A Systematic Literature Review

“…; Nijssen et al . ; Yli‐Renko and Janakiraman ). Finally, some researchers looked into the impact of NPD processes on SMEs’ performance, generally finding a positive relationship between the successful development of new products and the survival and success of the firm (Kumar et al .…”

Innovation with Limited Resources: Management Lessons from theGermanMittelstand

“…Due to their ownership structure and historical links to their mostly rural (or small town) communities, Mittelstand firms pay particular attention to forging ties with key stakeholders in the surrounding community. Across generations, they develop strong "connections," not only with suppliers and customers, as frequently highlighted in family firm and SME research (Ahn, Minshall, and Mortara, 2015; Colombo, Laursen, Magnusson, and Rossi-Lamastra, 2012; Nijssen et al, 2012), but also with research centers, schools, local governments, community banks, and other institutions.…”