Technology-based product market entries : managerial resources and decision-making process

Abstract

Entering new product markets on the basis of an existing technological competence is an important possible source of growth for technology intensive companies. The resource-based view explains resource-based growth in general. Diversification research has studied patterns of technology-based new product market entries. More research is, however, needed on managerial and decision-making process factors impacting the success of technology-based product market entries.

The findings of this dissertation contribute to the knowledge on technology-based new product market entries. A framework is developed and tested, which explains the impact of managerial resources and decision-making process characteristics on the success of technology-based product market entries. Hypotheses are derived from the resource-based view and decision-making research. The main research question is: Which levers does the management control that help promote technology-based growth into new product markets? This question is further broken down into the following three questions covering the three hypothesized main levers: Do the managerial resources invested in generating technology-based growth impact the success of technology-based product market entries? What is the impact of operational capabilities on the success of individual technology-based product market entries? What is the impact of decision-making process characteristics on the success of individual technology-based product market entries?

The framework and the underlying hypotheses are examined in the light of data collected with a survey of 63 companies. The framework and the survey questionnaire were developed on the basis of interviews with nine companies as well as a literature review of previous empirical research on diversification and research on new product development. The empirical data support the main arguments of the framework. In order to further examine the conclusions from the analysis of the survey data, five of the survey respondent-companies were engaged in deepening case studies.

Several theoretical contributions are identified and managerial implications are derived. Primarily, this dissertation contributes to the literature on technology-based product market entries by creating a better understanding of the managerial levers for promoting success. Chosen process, management and capability-related factors are studied. The dissertation contributes to diversification research by examining on the project level the process, organizational, and managerial components of diversification. The main contribution related to the resource-based view is further clarification concerning the role and support to the importance of managerial services in resource-based growth. Aspects of successful management of technology-based market entry projects are pointed out. The impact of familiarity with the new product markets on success of the entry receives support. Further insights are generated on the complex social phenomenon of participating in a project team with the challenging task of implementing a technology-based product market entry.

The most important managerial implication is that certain managerial levers are more effective than others in promoting the success of a growth strategy consisting of technology-based product-market entries. The findings give an indication of certain risks and uncertainties related to individual leveraging projects, which managers should take into account.