Product Development Collaborations: Implications for Marketing Strategy and Innovation

Abstract

High-tech firms are no longer able to rely exclusively on their internal knowledge and technologies to respond effectively to current market dynamics. Instead, they frequently collaborate with external entities to access new technologies and share the costs and risks of the innovation process. However, the effectiveness of such collaborations is questioned by many executives. Yet, as these Product Development Collaborations (PDCs) become crucial for a firm’s growth and success in current times, executives and academics alike are paying growing attention to them. In marketing, PDC is an active research topic since 1999. However, the body of marketing knowledge on the PDC is scattered across several studies over an extended period of more than two decades. In addition, the extant marketing studies report results that are inconsistent on some PDC issues and have overlooked others. In particular, marketing strategy considerations, in terms of firm’s strategic capabilities and objectives, have received somewhat of a short shrift in the literature. My dissertation contributes to our marketing literature with (a) a systematic review study that synthesizes the current state of marketing knowledge on the topic, identifies the research lacunas, and sets a future research agenda; and (b) two theory-driven empirical studies that provide new insights and novel implications to enrich our understanding of PDCs, their relation to the firm’s marketing strategy, and provide clear guidance to practitioners on how to benefit most from their supplier collaborations. v Grounding on several theories, creating and using a unique dataset, and utilizing multiple research and econometric techniques, my dissertation empirically addresses the following two general research questions: RQ1. Can their functional (marketing, technological, and operations) capabilities lead firms into competency traps and hurt their innovation performance? How? Do international PDCs outperform domestic PDCs in combating the competency trap effect? When? RQ2. What is the appropriate PDC governance mechanism (joint ventures, agreements, or licenses) that would enhance innovation performance? How do governance and capabilities simultaneously impact innovation performance? How does the firm’s product positioning strategy (differentiation versus cost-leadership) interact with governance and capabilities to affect innovation outcomes?