Uncovering the reciprocal complementarity between product and process innovation

Abstract

The purpose of this paper is to provide a starting point in examining the relationship between product and process innovation beyond the industry and company level. This is the first study to integrate perspectives from contingency theory and the resource-based view of the firm to show how differences in resources and capabilities combined with the specific needs of the New Product and Process Development Projects, will influence the type of complementarity between product and process innovation. We develop a classification that defines seven unique complementarities between product and process innovation and illustrate them in a Product-Process Complementarity Map. This helps Product and Process Development Managers to visualize the variety of options companies have in their New Product and Process Development Projects. We advance our argument by identifying three contingency factors: technology trajectories, power of supply chain, potential and realized absorptive capacity. These three discrete, but interrelated resources and capabilities are widely referenced in the context of process industries that are likely to lead to different complementarity types. Finally, these two contributions are brought together in The Complementarity-Capability Matrix, where we propose seven complementarity strategies and resources and capabilities necessary to achieve them. The matrix was designed to contribute to our understanding of complementarities beyond the industry and company level and serve as a useful tool in decision making for managers that are facing New Product and Process Development Projects.

Firms’ innovation benefiting from networking and institutional support: A global analysis of national and firm effects

“…We have here argued for effect on networking quality with respect to firm innovation. As countries will tend to vary in the extent to which their institutional environment supports the quality of collaborative relationships we will therefore expect variations in the extent to which given networking activity of firms in different countries will impact firm innovation, both process innovation and product innovation (Hullova et al, 2016). We state this expectation as Hypotheses 3a and b, Hypothesis 3.…”

“…This correlation is not so high that it calls for viewing innovation as an underlying factor, uni-dimensional with manifestations in processes and products. Instead, process innovation and product innovation are considered distinct and treated separately in the analyses of effects on process and product innovation (Hullova et al, 2016).…”

Innovation as a driver of eco‐innovation in the firm: An approach from the dynamic capabilities theory

“…Doran () points out that the interrelation between capabilities arises as a consequence of the need to develop tasks and the affinity between them. In this sense, Hullova, Trott, and Simms () study interactions among technological innovations and classify them according to two dimensions: first by the order of interaction, which can be simultaneous or sequential; and second, by the degree of interaction, which can be synergistic or complementary. They find that the interaction between process and product innovation may be sequential.…”

Critical capabilities for effective management of complementarity between product and process innovation: Cases from the food and drink industry

“…The trend of favouring product innovation over process innovation in the innovation management literature has derailed towards the recognition that they are equal drivers of innovation activity, and their simultaneous consideration has significant benefits to the company (Damanpour, 2010;Martínez-Ros and Labeaga, 2009). Hullova et al (2016) provided the most recent advancement in the conceptual development of complementarity management and proposed seven different extents of complementarities between product and process innovation in their 'Product-process complementarity map'.…”