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The Journal of Product Innovation Management 19 (2002) 110 —132

A critical look at technological innovation typology and innovativeness


terminology: a literature review
Rosanna Garcia*1, Roger Calantone2
Department of Marketing & Supply Chain Management, Michigan State University, East Lansing, MI, USA

Received 30 September 2001; accepted 20 May 2001

Abstract
A plethora of definitions for innovation types has resulted in an ambiguity in the way the terms ‘innovation’ and ‘innovativeness’ are
operationalized and utilized in the new product development literature. The terms radical, really-new, incremental and discontinuous are
used ubiquitously to identify innovations. One must question, what is the difference between these different classifications? To date
consistent definitions for these innovation types have not emerged from the new product research community. A review of the literature from
the marketing, engineering, and new product development disciplines attempts to put some clarity and continuity to the use of these terms.
This review shows that it is important to consider both a marketing and technological perspective as well as a macrolevel and microlevel
perspective when identifying innovations. Additionally, it is shown when strict classifications from the extant literature are applied, a
significant shortfall appears in empirical work directed toward radical and really new innovations. A method for classifying innovations is
suggested so that practitioners and academics can talk with a common understanding of how a specific innovation type is identified and how
the innovation process may be unique for that particular innovation type. A recommended list of measures based on extant literature is
provided for future empirical research concerning technological innovations and innovativeness. © 2002 PDMA. All rights reserved.
“A rose is a rose is a rose. And a rose by any other name would smell just as sweet.”
Gertrude Stein & William Shakespeare

1. Introduction scale items have been used in just 21 empirical studies in the
new product development (NPD) literature that model prod-
Academics generally believe that they have begun to uct innovativeness (see Table 1 and Appendix A). This lack
understand the process of developing innovations and it of consistency in operationalizing ‘innovationativeness’ has
doesn’t matter what they call them; new innovations smell resulted in the interchangeable use of the constructs ‘inno-
just as sweet by any other name. The innovation process has vation’ and ‘innovativeness’ to define innovation types.
been identified for radical, incremental, really new, discon- Although this may seem to be an insignificant point, this has
tinuous, and imitative innovations, as well as for architec- led to incongruent categorizations of innovation typology
tural, modular, improving, and evolutionary innovations. and widespread confusion as to what empirical studies are
Based on solid empirical research, normative strategies actually reporting. An innovation that one researcher may
have been suggested for each of these different types of term ‘really new’ is termed ‘radical’ or ‘discontinuous’ by
innovations. Yet, one has to ask, what is the difference another researcher. Additionally, there is no consistent de-
between a radical innovation, a really new product innova- lineation on what is considered ‘high’, ‘moderate’ and ‘low’
tion, and a discontinuous innovation? What is the difference degree of innovativeness and if that correlates to the cate-
between an incremental innovation and an imitative inno- gorizations of ‘radical’, ‘really new’, and ‘incremental’ in-
vation? Just as important, does it matter how innovations are novations or some other typology.
labeled? Although this lack of conformance in defining ‘innova-
No less than fifteen constructs and at least 51 distinct tion’ and ‘innovativeness’ has been recognized [7,21,25,27,
36] there has been no embracement of any consistent di-
mensions of these constructs. This may be due to the fact
* Corresponding author. Tel.: ⫹1-517-353-6381; fax: ⫹1-517-432-1112. that innovations are researched from many scholastic com-
E-mail address: garciar8@msu.edu (R. Garcia). munities and address each community’s select audience.

0737-6782/02/$ – see front matter © 2002 PDMA. All rights reserved.


PII: S 0 7 3 7 - 6 7 8 2 ( 0 1 ) 0 0 1 3 2 - 1
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 111

Table 1 stead it just relabels/redefines/reiterates findings from pre-


Constructs used to model product innovation/innovativeness vious studies with different labeling of innovations. Find-
Construct Study* ings from other fields (organizational behavior, engineering,
strategic management) are often overlooked because they
䡠 Product innovativeness 2, 6, 7, 9, 12, 13, 15, 17
䡠 Radicalness (discontinuous) 11, 14, 16, 18, 20, 21 emphasize a ‘different’ type of innovation. A recent meta-
䡠 Newness to firm 1, 6, 10, 13, 19 analysis by Henard & Szymanski [26] emphasizes this point
䡠 Technical content 4, 8 as it may exclude the findings from other disciplines be-
䡠 Newness to market 19 cause of this identification crisis.
䡠 Newness of technology 19
In empirical research, hypothesis building regarding in-
䡠 Newness to customer 10
䡠 Product uniqueness 1 novation types has also discounted relevant prior research
䡠 Product (superiority) 1 that does not use the same terminology as the research being
䡠 Synergy (fit) 1 undertaken. This leads to ‘new’ findings that are in fact
䡠 Product/market fit 6 rehashes of previous work. Additionally, this lack of con-
䡠 Marketing task similarity 3
sistency can lead to the reversal of causal notions in hy-
䡠 Product complexity 3
䡠 Development complexity 3 pothesis building. Where innovativeness may be modeled as
䡠 Product type 5 the cause it may be more appropriately modeled as the
effect. The identification of innovation types and their in-
* Some studies used more than one construct.
1. Cooper (1979) fluence on the market place is really a problem as old as
2. Lawton & Parasuraman (1980) classical economics [51]! To ignore these distinctions is to
3. More (1982) turn one’s back, literally, on sixty-five years of research on
4. Maidique & Zirger (1984) the innovation process.
5. Yoon & Lilien (1985)
Because new product researchers have not found consis-
6. Cooper & de Brentani (1991)
7. Kleinschmidt & Cooper (1991) tency in labeling and identifying innovations, we cannot
8. Lee & Na (1994) expect practitioners to have learned from our research en-
9. Ali, Krapfel, & LaBahn (1995) deavors. Managers looking for an understanding of how to
10. Atuahene-Gima (1995) address the idiosyncratic problems associated with radical
11. Green, Gavin, & Aiman-Smith (1995)
innovations will have difficulties finding the holy grail from
12. Olson, Walker & Ruekert (1995)
13. Mishra, Kim, & Lee (1996) our research efforts. Managers see more conflict in empir-
14. Souder & Song (1997) ical results than is factually true, natural, or even possible in
15. Schmidt & Calantone (1998) empirical research. Thus, they make choices of which re-
16. Colarelli O’Connor (1998) search finding is ‘relevant’ based on the presentation style,
17. Song & Montoya-Weiss (1998)
the ‘hot topic’ of the meeting, or whatever supports their
18. Veryzer (1998)
19. Goldenberg, Lehman, & Mazursky (1999) personal motivations or that of their current consultant. One
20. Kessler & Chakrabarti (1999) cannot expect managers to embrace confusing conflicting
21. Chandy & Tellis (2000) results. For example, a manager assigned to a new product
team must first discern if he/she is working with a radical,
really new, discontinuous, disruptive, incremental, or imi-
However, a large proportion of significant findings regard- tative innovation. Upon making this distinction (if even
ing innovations have originated in the last 15 years from the possible), he/she will then disregard a substantial and sig-
research of the Journal of Product Innovation Management nificant amount of research findings that may have helped
with its diverse base of engineers, marketers, product man- advance the NPD project.
agers, and R&D team members [8]. For this reason, it is For empirical research to have an impact on practice, it
important that a consistent set of working definitions evolve should be focused, clear and report ‘true’ differences, not
from this community of researchers. results biased by mis-defined outcomes. For these reasons,
Why is it necessary to have a consistent typology for we believe that this literature review can be useful for
identifying innovations? It is only possible to advance our facilitating future advancements in the NPD process. The
knowledge of innovations by understanding what is the purpose of this article is to delineate the domain of the
difference between a radical innovation, a really new inno- constructs ‘innovation’ and ‘innovativeness’, to provide an
vation, and an incremental innovation. This literature re- operational definition, and to introduce a comprehensive
view will demonstrate how inconsistencies in labeling in- framework for directing future research. We draw on new
novations have significantly contributed to a lack of product literature in marketing, management, and engineer-
academic advancements regarding the NPD process of dif- ing to provide a candid review of the usage of the termi-
ferent types of innovations. NPD researchers have identified nology technological ‘innovation’ and ‘innovativeness’. In-
various innovation types on an ad hoc basis, and this has stead of inventing yet another original typology, we will
resulted in research myopia. More bluntly, researchers often synthesize a categorization that provides a parsimonious
believe that their work is ‘new’ and ‘important’ when in- conceptualization of the overarching factors of interest to
112 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

new product researchers and practitioners concerning new “A basic idea underlying the proposed model of product
product/process/service innovations. innovation is that products will be developed over time in a
predictable manner with initial emphasis on product perfor-
mance, then emphasis on product variety and later emphasis
2. Inovation and innovativeness explicated on product standardization and costs” [p. 642]. This itera-
tive nature results in a variety of different innovation types,
2.1. ‘Innovation’ defined. typically called ‘radical innovations’ for products at the
early stages of diffusion and adoption and ‘incremental
In order to begin to identify innovation types, it is first innovations’ at the advanced stages of the product life cycle.
important to define a ‘technological innovation’. Engineer- Innovations do not occur just during the production devel-
ing, marketing, management and even economics provide opment phases but also may occur during the diffusion
unique spins as to what is considered an innovation. A process in which a product or process may undergo contin-
review of this literature reveals that the 1991 OECD [44] ual improvements and upgrades. “Diffusion is seldom, if
study on technological innovations best captures the essence ever, a simple process of replication by unimaginative im-
of innovations from an overall perspective: ‘Innovation’ is itators” [18 p. 305].
an iterative process initiated by the perception of a new A clarification of the differentiation between process
market and/or new service opportunity for a technology- innovations and the innovation process is also worthwhile.
based invention which leads to development, production, “A production process [innovation] is the system of process
and marketing tasks striving for the commercial success of equipment, work force, task specification, material inputs,
the invention. work and information flows, and so forth that are employed
This definition addresses two important distinctions: [1] to produce a product or service” [60 p. 641]. Once the
the ‘innovation’ process comprises the technological devel- production process has become standardized for product
opment of an invention combined with the market introduc- innovations, process innovations will evolve to improve the
tion of that invention to end-users through adoption and output productivity. Classic examples of process innova-
diffusion, and [2] the innovation process is iterative in tions are the float glass process for flat-sheet glass manu-
nature and thus, automatically includes the first introduction facturing and the Bessemer process for converting iron to
of a new innovation and the reintroduction of an improved steel, which revolutionized the steel industry. The primary
innovation. This iterative process implies varying degrees focus of ‘process innovations’ is the efficiency improve-
of innovativeness and thus, necessitates a typology to de- ment of the production process for ‘product innovations’
scribe different types of innovations. As pointed out by an [59]. What is not evident and can lead to confusion between
anonymous reviewer, the OECD definition also references distinguishing between process innovations and the innova-
‘technology-based inventions’. Technological innovations tion process is that process innovations can lead to new
are those innovations that embody inventions from the in- product innovations.
dustrial arts, engineering, applied sciences and/or pure sci-
ences. Examples include innovations from the electronics, 2.2. ‘Innovativeness’ defined
aerospace, pharmaceuticals, and information systems indus-
tries. ‘Innovativeness’ is most frequently used as a measure of
It is important to elucidate that an invention does not the degree of ‘newness’ of an innovation. ‘Highly innova-
become an innovation until it has processed through pro- tive’ products are seen as having a high degree of newness
duction and marketing tasks and is diffused into the mar- and ‘low innovative’ products sit at the opposite extreme of
ketplace [19,34,53]. “The solution to a basic scientific puz- the continuum. However, little continuity exists in the new
zle or the invention of a new “product” only in a laboratory product literature regarding from whose perspective this
setting makes no direct economic contribution. Innovation degree of newness is viewed and what is new. Although the
includes not only basic and applied research but also prod- majority of research takes a firm’s perspective toward new-
uct development, manufacturing, marketing, distribution, ness, others look at new to the world [54], new to the
servicing, and later product adaptation and upgrading” [53 adopting unit [15], new to the industry [10], new to the
p. 1]. A discovery that goes no further than the laboratory market [31,38], and new to the consumer [4], (see Table 2).
remains an invention. A discovery that moves from the lab This relative nature of defining innovativeness has contrib-
into production, and adds economic value to the firm (even uted to the lack of advancement in understanding the NPD
if only cost savings) would be considered an innovation. process as studies cannot be compared across different units
Thus, an innovation differs from an invention in that it of analysis. The bouncing point of view of newness, creates
provides economic value and is diffused to other parties distinctive, unique studies that never achieve the status of
beyond the discoverers. “re”-search.
The continual evolution of innovations is the iterative Despite the varying perspectives for ‘innovativeness’ a
nature referenced in the OECD definition. Utterback and single consistency does exist; it is always modeled as the
Abernathy [60] describe the iterative process of innovation. degree of discontinuity in marketing and/or technological
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 113

Table 2
Newness factors

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

New to:
New to the world x x x x
New to the industry x x x x
New to scientific community x x
New to the market(place) x x x x x x x x x
New to the firm x x x x x x x x
New to the customer x x
New what:
New technology x x x x x x x x x x x x x x x
New product line x x x x x x x x x x
New product benefits/features x x x x
New product design x x x x x x
New process x x x x x x x
New service x
New competition x x x x x
New customers x x x x
New customer need x x
New consumption patterns x x x
New uses x x x
New improvements/changes x x x x
New development skills x x
New marketing/sales/ x x x x x x
distribution skills
New managerial skills x
New learning/experience/ x x x
knowledge
New quality/benefits x x x

1. Cooper (1979)
2. Lawton & Parasuraman (1980)
3. More (1982)
4. Maidique & Zirger (1984)
5. Yoon & Lilien (1985)
6. Cooper & de Brentani (1991)
7. Kleinschmidt & Cooper (1991)
8. Lee & Na (1994)
9. Ali, Krapfel, & LaBahn (1995)
10. Atuahene-Gima (1995)
11. Green, Gavin, & Aiman-Smith (1995)
12. Olson, Walker & Ruekert (1995)
13. Mishra, Kim, & Lee (1996)
14. Souder & Song (1997)
15. Schmidt & Calantone (1998)
16. Colarelli O’Connor (1998)
17. Song & Montoya-Weiss (1998)
18. Veryzer (1998)
19. Goldenberg, Lehman, & Mazursky (1999)
20. Kessler & Chakrabarti (1999)
21. Chandy & Tellis (2000)

factors, (see Table 3). We thus maintain that product inno- egy. In the next section we will demonstrate how many
vativeness is a measure of the potential discontinuity a researchers have labeled varying degrees of product inno-
product (process or service) can generate in the marketing vativeness as different typologies.
and/or technological process. From a macro perspective, First, it must be emphasized that product innovativeness
‘innovativeness’ is the capacity of a new innovation to does not equate to firm innovativeness. Firm or organiza-
create a paradigm shift in the science and technology and/or tional innovativeness has been defined as the propensity for
market structure in an industry. From a micro perspective, a firm to innovate or develop new products [16]. It has also
‘innovativeness’ is the capacity of a new innovation to been defined as the propensity for a firm to adopt innova-
influence the firm’s existing marketing resources, techno- tions [13,48]. In either case, the innovativeness of a product
logical resources, skills, knowledge, capabilities, or strat- that a firm markets or adopts is not a measure of organiza-
114
Table 3
Summary of constructs and factors in empirical research

Author Construct name Factors # of Alpha Variance Scale Categories # of Dependent


items or R explained products/ variable
projects

Cooper (1979) Product innovativeness Newness to the firm 8 NR 10.10% 0–10 Continuum 195 New product
Likert success
Product uniqueness 6 2.20% 0–10
(Pioneer) Likert

R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132
Product uniqueness/ 3 9.00% 0–10
superiority Likert
Lawton & Parasuraman Product innovativeness Change in 1 NR 1–7 High/Medium/ 107 Adoption of mktg
(1980) behavioral patterns Likert Low concept
Product newness 1 1–7 High/Medium/
Likert Low
More (1982) Marketing task similarity 10 NR NR Continuum 43 Accept/reject
decision
Production complexity 5 NR NR
Distribution difficulty 5 NR NR
Development complexity 5 NR NR
Maidique & Zirger Degree of technical content NR NR NR Radical Survey I n ⫽ Success/failure
(1984) breakthrough/ 78 Survey II n
significant ⫽ 58
technical
change/
incremental
change
Innovation type — — NR True/adoption
Yoon & Lilien (1985) Product type — — NR Original new 112 New product
products/ performance
reformulated
new products
Cooper & de Brentani Synergy 7 0.837 1–7 Continuum 106 New service
(1991) Likert success
Newness to the firm 7 0.724 1–7
Likert
Innovativeness of service product 3 0.71 1–7
Likert
Product uniqueness and superiority 6 0.75 1–7
Likert
Product/market fit 3 0.712 1–7
Likert
Kleinschmidt & Cooper Product innovativeness 6 NR NR Highly/ 195 New product
(1991) moderately/low performance
innovativeness
McDonough (1993) Product type — — Routine/radical 32 New product
development
speed
Table 3
Summary of constructs and factors in empirical research (cont.)

Author Construct name Factors # of Alpha Variance Scale Categories # of Dependent


items or R explained products/ variable
projects

Lee & Na (1994) Technical innovativeness of product 1 — 1–5 Incrementally 75 Technical


Likert improving/ performance
radical
Ali, Krapfel, & LaBahn Product innovativeness 3 0.77 1–7 Continuum 73 Cycle time

R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132
(1995) Likert
Technical content 3 0.82 1–7
Likert
Green, Gavin, & Radicalness of innovation Technical 6 3% 1–7 Radical 213 None—factor
Aiman-Smith (1995) uncertainty analysis
Technical 3 18% 1–7
inexperience Likert
Technology cost 3 11% 1–7
Likert
Business experience 4 61% 1–7
Likert
Atuahene-Gima (1995) Product newness Newness to 6 0.78 Radical/ 119 Radical New product
customers Incremental performance
Newness to firm 1 103 Incremental
Olson, Walker & Product innovativeness Newness of product 5 0.81 NR 1–5 Radical/ 45 Product and
Ruekert (1995) incremental financial
outcomes
efficiency
outcomes
psychosocial
outcomes
Mishra, Kim & Lee General characteristics Product 1 r ⫽ 0.675 0–10 Continuum 144 New product
(1996) innovativeness Likert success
Customization of 1 r ⫽ 0.629
the product
Technology content 1 r ⫽ 0.621
correlation with DV
Newness to the firm 8 NR 0–10 Continuum
Likert
Souder & Song (1997) Radicalness 3 0.74 1–5 Continuum 156 New product
Likert success
Schmidt & Calantone Product innovativeness — — High/ Innovative/ 161 Likelihood of
(1998) low incremental failure/self-
reported
commitment/go/
stop decision
Colarelli O’Connor Source of technology 5 NR Discontinuous 9 Market learning
(1998)
Nature of market needs 4 NR

115
116
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132
Table 3
Summary of constructs and factors in empirical research (cont.)

Author Construct name Factors # of Alpha Variance Scale Categories # of Dependent


items or R explained products/ variable
projects

Song & Montoya- Product innovativeness NR NR Really new/ 163 Really New product
Weiss (1998) incremental new/169 success
incremental
Veryzer (1998) Discontinuity index Discontinuity of NR NR NR High/medium/ 7 Customer input/
product benefits low customer
evaluation
Discontinuity of NR NR NR
technological
capabilities
Discontinuity of NR NR NR
consumption
patterns
Goldenberg, Lehmann Newness Newness to the 1 — 0–2 High/moderate/ 197 New product
& Mazursky(1999) market low success
Newness to the firm 1 — 0–1 New/not new
Newness of the 1 — 0–2 High/moderate/
technology low
Kessler & Chakrabarti Product radicalness 2 NR 1–5 Radical/ 42 radical 33 Innovation speed
(1999) incremental incremental
Chandy & Tellis Radical product Technology 1 — 1–9 Continuum 64 Radical product
(2000) innovation difference innovation
Customer benefits 1 — 1–9

* NR ⫽ not reported.
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 117

tional innovativeness. Many firms have taken an innovation change or radical innovation, I mean change that sweeps
strategy of imitating and improving upon existing products away much of a firm’s existing investment in technical
or technologies. This approach is described by the ‘analyz- skills and knowledge, designs, production technique, plant
er’ strategy suggested by Miles and Snow [39]. This type of and equipment” [p. 200]. From Utterback’s perspective,
firm is very successful at improving upon existing product dislocation or discontinuity at the firm level or in the indus-
designs. Microsoft is a classic example of this type of try accompanies the introduction of radical innovations.
strategy. Even successful analyzers, including Microsoft, Continuous (incremental) innovations give way to standard-
are often viewed by their competitors as great imitators and ization and status quo within the firm or industry.
not highly innovative. Thus, a highly innovative product Rothwell and Gardiner [49] focus on technological dis-
does not automatically imply highly innovative firms. continuity, by emphasizing ‘reinnovations’ or improve-
ments on existing innovations. Their dichotomy of ‘innova-
tions’ and ‘reinnovations’ leads to several subcategories.
3. Innovation typology comparisons ‘Innovations’ are radically new inventions establishing
landmark new products, and as such, create new industries.
There is no question that not all innovations are the same. ‘Reinnovations’ dominate much of the contemporary “real”
Accordingly, they are frequently classified into typologies industrial world. They result in existing technology improv-
as a means of identifying their innovative characteristics or ing upon existing product design (incremental), new tech-
degree of innovativeness. It has been theorized and empir- nology improving existing products (generational), existing
ically tested that the varying degrees of newness and the technology creating new products (new mark products),
discontinuities resulting from highly innovative innovations improved materials improving existing products (improve-
will change the important factors in the NPD process [18, ments), and new technology improving subsystems of ex-
47,54]. This contingency approach to the NPD process has isting products (minor details).
resulted in researchers devising ad hoc typologies to label Another viewpoint, Kleinschmidt and Cooper’s [31] study
degrees of innovativeness. A review of the literature reveals of 195 new products, leads to a triad categorization. Klein-
the following categorizations: schmidt and Cooper’s typology distinguishes between ‘high’,
‘moderate’, and ‘low’ innovativeness. Highly innovative prod-
Y eight categories–reformulated/new parts/remerchan-
ucts include new to the world products and new to the firm
dising/new improvements/new products/new user/
lines, which are also new to the market. Moderately innovative
new market/new customers [29];
products consist of less innovative new lines to the firm and
Y five categories–systematic/major/minor/incremental/
new products to the existing product line. Low innovative
unrecorded [18];
products include modifications, cost reductions, and reposi-
Y tetra-categorization –incremental/modular/architec-
tioning.
tural/radical [27], niche creation/architectural/regular/
A fourth perspective, Abernathy and Clark’s [1] matrix
revolutionary [1], incremental/evolutionary market/
categorization focuses on competitive significance by map-
evolutionary technical/radical [42], incremental/
ping technology competence against market environments.
market breakthrough/technological breakthrough/
The four resulting categories for innovations are ‘niche
radical [7], incremental/architectural/fusion/
creation’, ‘architectural’, ‘regular’ and ‘revolutionary’. In
breakthrough [57];
niche creations, stable and well-specified existing technol-
Y triadic categorization–low innovativeness/moderate
ogy is refined, improved, or changed to support a new
innovativeness/high innovativeness [31], incremental/
market position. These refinements build on established
new generation/radically new [62] and,
technical competence and improve product applicability in
Y dichotomous categorization– discontinuous/continu-
emerging market segments. Architectural innovations forge
ous [3,47], instrumental/ultimate [23], variations/re-
new market linkages with new technology through the cre-
orientations [43], true/adoption [37], original/refor-
ation of new industries or the reformation of existing ones.
mulated [64], innovations/reinnovations [49], radical/
They set the future architecture of the industry. Regular
routine [38], evolutionary/revolutionary [59],
innovations build on established technical and production
sustaining/disruptive [9], really new/incremental [50,
competences targeted to existing markets and customers.
54], breakthrough/incremental [46], and radical/incre-
They often involve incremental improvements in process
mental [5,18,4,30,35,52,56].
technology. Revolutionary innovations disrupt and obsolete
This abundance of typologies has resulted in the same name technical and production competence but target existing
being used for different types of innovations and the same markets and customers.
innovation being classified under different typologies. The A couple of examples will demonstrate how just these four
following review of four different classifications by four different classification approaches can lead to different labeling
groups of researchers will demonstrate this point. of the same innovation. A classic example is the typewriter.
Utterback [59] provides the following definition of a Utterback [59] writes, “Discontinuities were observed between
discontinuous or radical innovation: “By discontinuous the periods of the manual typewriter, electrics, dedicated work
118 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

processors, and personal computers. Of the large manual type- A review of the literature reveals incongruence in the
writer firms of the early twentieth century, none were success- operationalization of product (process/service) innovative-
ful in jumping onto the bandwagon of the electric typewriter; ness at four different levels: [1] modeling from a macro or
it was IBM, an outsider that developed both the product and its microperspective, [2] modeling marketing and/or techno-
market” [p. 201]. Based on this scenario, Utterback would logical discontinuities, [3] modeling a single dimensional or
designate the electric typewriter as a radical innovation be- multifactorial construct, and [4] modeling innovativeness as
cause the new technology brought about industrial discontinu- a categorical or continuous variable. A single theme, how-
ity and new competitors. ever, does underlie all these classifications of innovations:
The Rothwell and Gardiner typology identified an ‘in- innovativeness is a measure of discontinuity in the status
cremental’ design as adding radical new features to improve quo in marketing factors and/or technology factors. This
upon an existing innovation. Thus, Rothwell and Gardiner section focuses on the studies that have reached empirical
would label the electrical technology advancement from conclusions about the moderating or mediating effects of
manual to electric typewriters as an incremental innovation. product innovativeness. We also include studies where
Kleinschmidt and Cooper would label the typewriter tech- product innovativeness is modeled as a dependent variable.
nology evolution a moderate innovation and Abernathy and The unit of analysis considered is the project level for
Clark would call it a revolutionary innovation. products, processes, and services developed for the purpose
Another example is the Canon laser photocopier which of outside-the-firm commercialization. We will not review
produced digital signals that could be electronically digi- studies that have focused on firm innovativeness.
tally processed, stored or transmitted simultaneously to a
number of distant slave printers. The analog system of its 4.1. Macro/microperspective
conventional predecessors were unable to network. The new
technology was the application of a laser and electronic The measurements utilized in the empirical analyses re-
information processing step inserted between the original viewed can be broken into two frameworks; (a) a mac-
optical and print systems. The digital processing subsystem rolevel where the concern is measuring how the character-
allowed the production of a technologically new laser dig- istics of product innovation is new to the world, the market,
ital copier. Utterback would label the movement from ana- or an industry [4,35,37,40,50,64], and (b) a microlevel
log to digital technology a market broadening, competence where product innovativeness is identified as new to the
enhancing, radical innovation. Yet for Rothwell and firm or the customer [41]. In the literature included in this
Gardiner, radical technology embedded in a reinnovation comparison, researchers most frequently used both a macro
does not constitute a radical innovation, instead just a rede- and a microperspective in modeling the construct [2,10,11,
sign on an ‘innovation’. Thus, they would label this inno- 12,31,20,21,45]. The distinction between macro and micro
vation an incremental innovation with a subassembly perspectives is important as it identifies newness of an
change. Kleinschmidt and Cooper would label it a moderate innovation to whom and from whose perspective. Compar-
innovation, and to Abernathy and Clark the copier technol- isons across research findings become more relevant with
ogy evolution is a regular innovation. this delineated perspective.
As these two examples demonstrate, the same innovation From a macro perspective, innovativeness is evaluated
can be labeled on either ends of the scale of innovativeness based on factors exogenous to the firm, such as familiarity
depending on the researcher. This ambiguity in classification of the innovation to the world and industry or creation of
schema makes it impractical, if not impossible, to accurately new competitors from the introduction of new innovations.
compare research studies. With these types of terminology Macro discontinuities are felt worldwide, industry-wide or
irregularities, it is impossible to accumulate knowledge regard- market-wide. The discontinuities that result are not depen-
ing innovation types and how their varying degrees of newness dent upon a firm’s strategy or structure, its competencies, its
alter the NPD process. The next section will review how knowledge base or its availability of resources.
inconsistencies also plague the operationalization of product It must take a highly radically innovative product to
innovativeness in empirical literature. cause discontinuity in the world. Few products have the
inertial forces to accomplish this feat, although they do
exist, for example, the Watt steam engine (circa 1769), the
4. Empirical literature compared telegraph (circa 1840), and the World Wide Web (circa
1980). The steam engine drove the industrial revolution and
As the previous review demonstrated, ad hoc categori- the World Wide Web is a major driving force in the infor-
zations of innovations into degrees of innovativeness has mational revolution. Discontinuities to an industry are more
led to inconsistencies in labeling innovation types. This easily identifiable. The Sony Walkman created a new mar-
becomes evident by examining how product innovativeness ket for mobile entertainment and a new industry for minia-
has been operationalized in the empirical literature. Table 1 turized electronics. The Apple computer instigated new
lists 15 constructs identified and Appendix A lists 51 dis- uses, new customers and new distribution channels for
tinct measures from the extant NPD literature. home computers. Innovations causing discontinuities in the
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 119

marketplace are ubiquitous; examples include, the compact Table 4


disc, antilock brakes, sport utility vehicles, polartec fleece, Factors used to model product innovation/innovativeness
homogenization procedures, nylon material, and the ATM. Construct Study*
The microperspective views product innovativeness as
䡠 Product newness to the firm 1, 2, 3, 5, 8
new to the firm or new to the firm’s customer [11,12,31,41]. 䡠 Product uniqueness (1st to market) 1
Discontinuities can occur in a firm’s marketing or R&D 䡠 Product uniqueness/superiority 1, 6
strategy, in a firm’s supplier or distribution chains, or in its 䡠 Change in behavioral patterns 2, 7
sales approach. However, a product’s innovativeness is con- 䡠 Product newness to customers 3
䡠 Technical uncertainty 4
tingent upon the firm’s capabilities and competencies. For a
䡠 Technical inexperience (newness) 4, 7, 8, 9
electronics manufacturer such as IBM to begin to manufac- 䡠 Technology cost 4
ture and market electric automobiles would be a disruptive 䡠 Business experience 4
and discontinuance endeavor. Yet, for General Motors to 䡠 Product innovativeness 6
design and market the same electric vehicle would not be 䡠 Discontinuity of product benefits 7
䡠 Newness to the market 8
considered discontinuous. Similarly, the same product may
䡠 Customer benefits 9
be defined with varying degrees of innovativeness by a
firm’s customers. * Some studies found more than one factor.
1. Cooper (1979)
2. Lawton & Parasuraman (1980)
4.2. Marketing/technological discontinuities 3. Atuahene-Gima (1995)
4. Green, Gavin, & Aiman-Smith (1995)
5. Olson, Walker & Ruekert (1995)
Technological innovations have two ‘forces’ from which 6. Mishra, Kim, & Lee (1996)
discontinuities may originate –from a marketing direction or 7. Veryzer (1998)
from a technological direction. Product innovation may 8. Goldenberg, Lehman, & Mazursky (1999)
require new marketplaces to evolve, and/or new marketing 9. Chandy & Tellis (2000)
skills for the firm. Similarly, product innovations may re-
quire a paradigm shift in the state of science or technology
embedded in a product, new R&D resources, and/or new identified (Table 4). Of course, only a test of discriminant
production processes for a firm. Some products, of course, validity can verify their distinctiveness.
may require discontinuities in both marketplace and tech-
nological factors. Studies reviewed cover all three of these
4.4. Categorical/continuous measures
scenarios; marketplace discontinuity [4,33,50,64], techno-
logical discontinuity [10,37], and both types of discontinui-
The fourth level showing lack of consensus was in using
ties [2,11,12,21,31,35,40,41,45].
categorical or continuous measures. Those researchers us-
ing categorical measures most frequently summed the scales
4.3. Single/multiple factors and split the sample into groupings of high/low/moderate
innovativeness or some similar categorization [31]. Using
‘Product innovativeness’ was most often modeled as a this method does not allow for external validity as the split
multidimensional reflective variable as opposed to a single in the data is dependent upon the sample of an often-limited
dimensional variable. The single factor operationalization population. Nor does it allow the findings from one study on
varied from measuring one item up to nine items. Even from radical innovations to be compared to another study on
a single dimension viewpoint there was no consistency in radical innovations. For example, one firm may have a
taking a macro or microperspective or both and in taking a
marketing strategy which focuses on incremental improve-
marketing or technological perspective or both. All con-
ments on products. Any divergence from this strategy
structs reported in the studies take these perceptions in
would result in a radical innovation to that firm (recall our
different combinations, that is, a macroperspective of mar-
IBM/General Motors example). However, that product may
keting forces, microperspective of technological forces, and
so forth. not be a radical innovation to the next firm. Thus, findings
The multifactorial operationalization of product innova- for one study cannot be compared to another study as the
tiveness had greater consensus among the studies. The most degree of innovativeness is a factor of the newness of the
commonly employed multidimensional construct used both innovation to a particular firm.
macro and micromeasures to determine discontinuities in ‘Continuous measures’ used a set of 1–5 or 1–7 Likert
both market and technology issues. These multidimensional scale items (ordinal measures) and then often used the
studies comprised on average three factors. The construct summated measures as an independent or dependent vari-
‘newness to the firm’ was used in half of these studies. Of able in the model being evaluated. Overall no consistency
the 21 differently labeled factors identified by researchers exists in the operationalization of innovativeness in terms of
through factor analysis (see Table 3), 12 unique factors were categorical or continuous measurement.
120 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

4.5. Consensus on discontinuities mous classification for identifying innovation type. We be-
lieve that this dichotomy is too simplistic. Radical innova-
Measuring product innovativeness based on marketing tions are rare in occurrence. It has been suggested that only
and/or technological discontinuities was the single level of 10% of all new innovations fall into the category of radical
consensus in the literature reviewed. Highly innovative innovations [6,22,49,63]. Although Rothwell and Gardiner
products were seen to have shallow existing market or have suggested that incremental innovations cover the 90%
technical knowledge bases, whereas low-level innovative of the remaining cases, we do not agree with this conclu-
products did not require new product marketing or techno- sion. We maintain that a third category is necessary in
logical knowledge. classifying innovations. We will use ‘really new’ to identify
This review of the literature clearly demonstrates that this third categorization.
there are few consistencies in the new product development Looking at the two levels previously discussed, macro
literature for operationalizing ‘product innovativeness’. As versus micro and marketing versus technology perspectives,
previously noted, this lack of consistency has resulted in a means for identifying innovation types using Boolean
little accumulated knowledge beyond an ad hoc level con- logic can be devised (see Appendix B). This logic provides
cerning the effects of innovativeness of a product on the unambiguous labels for ‘radical’, ‘really new’, and ‘incre-
NPD process. Many studies result in ‘new’ findings that are mental’ innovations. Radical innovations are innovations
just another way of phrasing the same issue addressed in that cause marketing and technological discontinuities on
another study. In order to propose a method of operation- both a macro and microlevel. Incremental innovations occur
alizing product innovativeness, it is first necessary to build only at a microlevel and cause either a marketing or tech-
a framework for identifying different product innovation nological discontinuity but not both. Really new innova-
types based on their discontinuities. In the next section, we tions cover the combinations in between these two ex-
will propose such a framework and then suggest a means of tremes.
operationalizing ‘product innovativeness’ which will pro- Based on this classification schema, there are eight com-
vide consistency and convergence in modeling this con- binations of innovation types possible. It is impossible to
struct. have an innovation that is discontinuous on a macro level
and not on a microlevel, thus, several combinations are
eliminated. Radical innovations represent 1/8 of these pos-
5. A typogoly for identifying technological innovations sibilities or 12.5% (Table 5). Really new innovations rep-
resent 4 of the 8 combinations or 50% of all types of
Recent new product development literature has eluci- innovations, and incremental innovations represent 37.5%
dated the importance of categorizing innovations into radi- of technological innovations. Our splits are in line with the
cal and incremental [7,38,54,61]. However, as previously Maidique and Zirger [37] breakdown which categorized
demonstrated, ‘radical’ and ‘incremental’ can be defined in 16.7% of all innovations to be ‘radical breakthrough’ prod-
numerous fashions and is dependent upon from whose per- ucts, 58.3% as ‘significant technical change’ products, and
spective innovativeness is being evaluated. “At present, the 25% as ‘incremental change’ products. Kleinschmidt &
literature does not contain a measure of the radicalness of Cooper [31] provided breakdowns of 30% to ‘highly inno-
innovations, yet this is a critical variable in the field of vative’ products, 47% to ‘moderately innovative’ products
innovation and new products” [7 p. 1]. It is our goal in this and 23% to ‘low innovativeness’. Additionally, Griffin [22]
section to provide a typology for classifying innovations found similar results in a more recent study (breakdowns of
based upon the extant literature. We will provide answers to 10%, 42% & 48%). The important distinction is that in a
our questions posed in the introduction; ‘What is the dif- random sample, radical innovations are rare and should be
ference between a radical, really new and discontinuous not account for more than 20% of the sample, likewise,
innovation?’ and ‘What is the difference between an incre- incremental innovations should account for no less than
mental and imitative innovation?’ It is important to empha- 20% of the sample. In this section we describe the charac-
size that this typology is relative –relative to the firm. What teristics of each of these types of innovations.
one firm identifies as a really new innovation, can be labeled
as an incremental innovation by another firm. The important 5.1. Radical innovations
fact remains that the procedures for developing really new
innovations are relevant to the one firm and incremental Radical innovations have been defined as innovations
innovation development procedures are relevant to the other that embody a new technology that results in a new market
firm – even though they are both developing the same in- infrastructure [10,54]. We have also maintained that radical
novation. The end results for the firms will be the same, the innovation introductions result in discontinuities on both a
process of reaching this result will differ significantly. In no macro and micro level. An innovation that causes disconti-
way should this confuse the identification process for de- nuity on a world, industry or market level will automatically
termining the ‘innovativeness’ of a new product. cause discontinuities on the firm and customer level. If a
The new product literature has mainly used a dichoto- new industry results from a radical innovation (i.e., the
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 121

Table 5
Typology for identifying innovations

Innovation type Level Present Examples

Radical innovation • Macro • Steam engine



Marketing discontinuity X • Telegraph

Technology discontinuity X • WWW
• Micro
▪ Marketing discontinuity X
▪ Technology discontinuity X

Really new • Macro • Canon laserjet


▪ Marketing discontinuity • Early fax machines
▪ Technology discontinuity X • Electron microscope
• Micro
▪ Marketing discontinuity X
▪ Technology discontinuity X
Really new • Macro • Sony walkman
▪ Marketing discontinuity X • Early telephone
▪ Technology discontinuity
• Micro
▪ Marketing discontinuity X
▪ Technology discontinuity X
Really new • Macro • Hummer
▪ Marketing discontinuity X • Early commercial jetliner
▪ Technology discontinuity
• Micro
▪ Marketing discontinuity X
▪ Technology discontinuity
Really new • Macro • Diesel locomotive
▪ Marketing discontinuity
▪ Technology discontinuity X
• Micro
▪ Marketing discontinuity
▪ Technology discontinuity X

Incremental • Macro • Super sonic transport


▪ Marketing discontinuity • BMW-M5
▪ Technology discontinuity
• Micro
▪ Marketing discontinuity X
▪ Technology discontinuity X
Incremental • Macro • Digital automotive control systems
▪ Marketing discontinuity
▪ Technology discontinuity
• Micro
▪ Marketing discontinuity
▪ Technology discontinuity X
Incremental • Macro • “Health” foods
▪ Marketing discontinuity
▪ Technology discontinuity
• Micro
▪ Marketing discontinuity X
▪ Technology discontinuity

World Wide Web), new firms and new customers also targets these exact customers. Radical new technology acts
emerge for that innovation. as the catalyst for the emergence of new markets and/or new
Radical innovations often do not address a recognized industries.
demand but instead create a demand previously unrecog- A tool that can aid in the identification of radical inno-
nized by the consumer. This new demand cultivates new vations is the technology S-curve introduced by Foster [17].
industries with new competitors, firms, distribution chan- The S-curve has been used to describe the origin and evo-
nels, and new marketing activities. In the late 1970s most lution of technologically discontinuous/radical innovations
households could not imagine a reason why they would [7,59,60]. This theory suggests that technological product
need a home computer. Today a multibillion dollar market performance moves along an S-curve until technical limi-
122 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

that nimble innovative firms or even serendipity in more


staid firms cannot drive radical innovations, but more to the
point, because of their nature, radical innovations are rare.
Another test for radical innovations is to determine if the
firm’s internal marketing and technology S-curve has been
impacted. Kusunoki [Kusunoki, 1997, 32] writes, “. . . be-
sides technological capabilities, introducing radical product
change to a market often requires a new set of organiza-
tional capabilities embedded in structures, communication
channels, and information processing procedures of organi-
zations, and it is usually quite difficult for established firms
to adjust their organizational capabilities for developing
innovative products” [p. 369]. A failure to find discontinuity
in technology and marketing strategies within a firm, should
automatically exclude the product from being considered
Fig. 1. Technology/Marketing S-Curve Phenomena (adapted from Foster radical. Finding a microlevel shift in the S-curves, is nec-
1986). essary but not sufficient criteria for radical innovativeness
as it also is an indicator of really new innovations.
tations cause research effort, time, and/or resource ineffi-
5.2. Really new innovations
ciencies to result in diminishing returns. New innovations
replace the old technology and a new S-curve is initiated
Although they comprise the majority of innovations, it is
(see Fig. 1). Foster characterized the technology evolution;
surprising that the moderately innovative class of innova-
“early in an R&D program, knowledge bases need to be
tions that lie in between radical and incremental has had so
built, lines of inquiry must be drawn and tested and tech-
little attention in the literature in the last twenty years.
nical problems surfaced. Researchers need to investigate
Kleinschmidt & Cooper define moderately innovative prod-
and discard unworkable approaches. Thus, until this knowl- ucts as “consisting of lines to the firm, but where the
edge has been acquired, the pace of progress toward tech- products were not as innovative (that is not new to the
nological limits is usually slow. But then it picks up, typi- market) and new items in existing product lines for the firm”
cally reaching a maximum when something like half the [p. 243]. We will term the moderately innovative product a
technical potential has been realized. At this point, the ‘really new’ innovation. On a macro level, a really new
technology begins to be constrained by its limits, and the product will result in a market discontinuity or a technolog-
rate of performance improvement begins to slow” [17 p. ical discontinuity but will not incorporate both. (If both do
217]. occur, it should be classified as a radical innovation, if no
Similar analogies can be made for proposing a market discontinuity occurs at the macro level, it should be classi-
S-curve. Early in market formation, knowledge bases need fied as an incremental innovation.) On a microlevel any
to be built, lines of inquiry must be drawn and tested, and combination of marketing and/or technological discontinu-
market-related issues surface. Marketers need to investigate ity can occur in the firm. Really new innovations are easily
and discard unworkable approaches (i.e., the World Wide identifiable by the criteria that a discontinuity must occur on
Web marketplace at this time). New markets evolve that either a marketing or technological macro basis in combi-
support the new technological innovation, new competitors nation with a microlevel discontinuity. They can evolve into
enter the market, and new partners and distribution channels new product lines (e.g., Sony Walkman), product line ex-
emerge to exploit the new technology. Thus, until this tensions with new technology (e.g., Canon Laserjet), or new
market know-how has been acquired, the pace of progress markets with existing technology (e.g., early fax machines).
toward market limits may be slow. Diminishing returns are Frequently ‘really new’ products are misclassified as
experienced when the market place becomes saturated with ‘radical innovations’ and ‘radical innovations’ are misclas-
competitors and me-too products. sified as ‘really new’ products. A case in point is the recent
Thus, a radical innovation can be identified by the initi- research by Kessler & Chakrabarti [30]. They empirically
ation of a new technology and new marketing S-curve. With investigated the array of factors that affect speed of the
this viewpoint it is easy to see that ‘planning’ for radical innovation process. They sorted 75 projects into ‘degree of
innovation requires understanding how to strategically plan change undertaken’ identifying 33 incremental innovations
for both the technological discontinuities and marketplace and 42 radical innovations. Since less than 20% of innova-
discontinuities for the global marketplace. Most firms are tions develop into radically new products, it is unlikely that
unable to alter the inertial forces driving the firm down a these 42 innovations were ‘radical’. Evaluating the innova-
particular path, thus, to plan for major strategic changes tion’s technology and market S-curves is an easy test to
based on macrolevel changes is unlikely. This is not to say determine the appropriate classification.
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 123

Likewise the research by Atuahene-Gima [4] on market 5.4. Incremental innovations


orientation uses ‘degree of product newness’ to classify 103
incremental innovations and 119 radical innovations. The Incremental innovations can easily be defined as prod-
groups were split into product improvements and line ex- ucts that provide new features, benefits, or improvements to
tensions (incremental innovations) and new product lines the existing technology in the existing market. “An incre-
and new to the world products (radical innovations). As mental new product involves the adaptation, refinement, and
radical innovations do not occur more frequently than in- enhancement of existing products and/or production and
cremental innovations, Atuahene-Gima’s ‘radical’ innova- delivery systems” [54], p. 126]. Incremental innovations
tions may more likely have been really new products. New will occur only on a microperspective affecting either the
product lines rarely result in both new marketing and tech- marketing and/or technology S-curve(s). Incremental inno-
nical infrastructures. With this reclassification from radical vations will not result in macro discontinuities which are
innovation to really new product innovations, one must only seen in radical or really new innovations. “Incremental
question whether the destructive radical innovation process innovations are important on two main counts: first as a
is accelerated by concept clarity, champion presence, and competitive weapon in a technologically mature market;
colocations as reported in the Kessler & Chakrabarti find- and second, because streamlined procedures based on ex-
ings or is it the really new product innovation process that isting technology can help alert a business in good times to
is sped to market by these factors? threats and opportunities associated with the shift to a new
Song & Montoya-Weiss [54] classify really new innova- technological plateau” [28]. For many firms, incremental
tions as “as an entirely new product category and/or pro- innovations are the lifeblood of the organization.
duction and delivery system. A really new product is one Incremental innovations evolve from the iterative nature
that: (1) relies on technology never used in the industry of the process of innovation previously discussed. Rothwell
before; (2) has an impact on or causes significant changes in and Gardiner [49] show that incremental innovations can
the whole industry; and (3) is the first of its kind and totally occur at all stages of the new product development process.
new to the market” (pg. 126). By this definition, it is likely At the conceptualization stage, R&D may use existing tech-
that a portion of Song & Montoya-Weiss’ 163 really new nology to improve an existing product design. At the mature
innovations may have been radical innovations. (Their sam- stage of a product’s life, line extensions may result in
ple split was 163 really new innovations and 169 incremen- incremental innovations. Rothwell and Gardiner point out
tal innovations). This classification for radical and really that a ‘borrowed’ technology from a different industry may
new innovation now allows us to differentiate these two be new to a different market. If it does not alter on a
types of innovations from discontinuous innovations. macrolevel either the technology or marketing S-curves or
on a microlevel both curves, this borrowed technology
5.3. Discontinuous innovations would be considered an incremental innovation.

A discontinuous innovation may be either a radical in- 5.5. Imitative innovations


novation or really new innovation dependent upon at which
level (macro/micro) and which S-curve(s) (marketing/tech- As previously noted, the difference between incremental
nology/both) is affected by the introduction of the invention and imitative innovations should be clarified. Grupp [24]
to the marketplace. Frequently discontinuous innovations provides a very succinct definition of imitative innovations.
refer to technological discontinuities [10,58,61]. Rice et al. “Innovation occurs only in the first company to complete
[46] define discontinuous innovations as “ ‘game changers’ industrial R&D which culminates in the launch of the first
which has potential (1) for a 5–10 times improvement in product on the markets. Rival innovations are designated
performance compared to existing products; (2) to create the imitations even if, in intracorporate term, very similar R&D
basis for a 30 –50% reduction in costs; or (3) to have processes are only a short distance from one another chro-
new-to-the world performance features” (pg. 52). Rice et al. nologically. The imitator need not necessarily be aware of
provide examples such as GE’s digital X-ray, TI’s digital or be able to benefit from the first innovator. Imitations can
light projector, GM’s hybrid vehicle, IBM’s silicon germa- thus be just as resource-intensive, especially R&D inten-
nium devices and the Otis bi-directional elevator. These sive, as the first innovation” [p. 20]. Because of their iter-
examples demonstrate new technologies that did not lead to ative nature, imitative products are frequently new to the
discontinuity in the existing market infrastructures. The firm, but not new to the market. Thus, imitative innovations
digital X-ray and the digital light projector are product line usually have low technological innovativeness and low mar-
extensions. The hybrid vehicle, the IBM semiconductor, ket innovativeness.
and the bi-directional elevator are new product lines. Thus, Imitative innovations should not be underrated. Innova-
we contend that most examples of discontinuous innova- tive imitators can significantly alter the market direction. “If
tions are really new innovations since only one of the an innovator does not move quickly, and keep moving, the
S-curves is affected. A discontinuous innovation may in- early imitators can play a major role in ”remaking“ or
deed be a radical innovation if both S-curves are perturbed. ”creatively destroying“ the market. . . Moreover, if they
124 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

equation models and are not so easily represented in other


modeling methodologies. We use the second-order model to
facilitate the discussion that the construct ‘innovativeness’
is comprised of two distinctly different components that
must both be represented in the measures in order to provide
content validity. Radical innovations were previously iden-
tified as innovations that have discontinuities along both
levels (macro/micro) and both sublevels (marketing/tech-
nology). Really new innovations are identified as having
discontinuities along just a single level of the macro level
(macromarketing or macrotechnology) but not both, and at
the sublevel on any dimension-micromarketing and micro-
technology. Incremental innovations have discontinuities
just along the micro level. Failure to include measures that
represent both levels of this construct will result in fatal
Fig. 2. Operationalization of innovativeness. content validity misrepresentation. Thus, regardless of the
methodological techniques employed in an empirical study,
the following discussion is valid for suggesting an opera-
have more resources and already have a large market share, tionalization method for the construct ‘technological inno-
it is their imitative reactions that will have the most impact vativeness’ for NPD studies. Below, we elaborate on this
on changing the market and the rate of change and compet- multilevel factor and develop propositions for operational-
itive dynamics in the market” [14] pg. 69]. Based on our izing this construct.
typology, imitative innovations will most likely be incre-
mental innovations, although on rare occasions they will be 6.1. First order factor
really new innovations.
Using items that measure product innovativeness on a At the first order level, the macro and micro perspectives
macro and microlevel and on marketing and technological are distinct from each other. The most important distinction
discontinuity, it is easy to classify highly innovative prod- to keep in mind is that on a macro level, discontinuities are
ucts as radical innovations, moderately innovative products exogenous to the firm. On either a macro or micro level,
as really new innovations and low innovativeness products product innovativeness must embody a marketing or a tech-
as incremental innovations. As we have noted, other typolo- nology discontinuity. We maintain that the higher the inno-
gies have been utilized but we recognize these as just vativeness in both factors, the greater the impact on product
alternative variations of these three product types. Thus, in innovativeness. If the market discontinuity is low or the
consensus with many researchers, we suggest that the labels technological discontinuity is low, this leads to low product
‘radical’, ‘really new’, and ‘incremental’ are appropriate innovativeness. On the contrary, high discontinuity in both
classifications for signifying diminishing degrees of product factors leads to high product innovativeness. The first factor
innovativeness. Now that we have proposed a classification level allows the split representation on the macro level
schema for product innovations, in the next section we will –from an industry perspective, and on the micro level –from
focus on providing a method of operationalizing product a firm perspective.
innovativeness in future empirical analyses. It may have been noted that we did not model ‘newness
to the world’ or ‘newness to the market’. ‘Newness to the
industry’ automatically implies ’newness to the market’ as
6. Operationalization of ‘product innovativeness’ the marketplace is a subset of the industry, thus, it does not
need to be explicitly modeled. The distinction between the
We previously discussed how product innovativeness marketplace and an industry is that the industry is com-
has been modeled in the extant literature (Tables 1 and 4). prised of several different markets. For example the com-
We also demonstrated how inconsistencies currently exist in puter industry is made up of the mainframe market, the
these operationalizations. We, thus, propose an operation- laptop market, the home computer market, and so forth. If
alization that may provide congruence to this construct an innovation is new to the industry, it is new to the
beyond that obtained to date. As emphasized, product in- marketplace or marketspace.
novativeness must be evaluated upon two dimensions, a ‘New to the world’ has also not been modeled in our
macro/micro and a marketing/technology discontinuity. operationalization. By our definition only radical innova-
This leads to modeling ‘product innovativeness’ as a sec- tions are new to the world. However, all innovations can be
ond-order factor model. Fig. 2 provides a visual conceptu- evaluated based on their newness to the industry and new-
alization for the following discussion. ness to the firm using our conceptualization. New to the
Second-order factors are easily modeled in structural world implies new to the industry and new to the firm. For
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 125

this reason it is not valid to include newness to the world in types. The customer perspective is considered as the firm
determining product innovativeness of different types of evaluates its market strategy of innovative products. Thus,
innovations. Newness to the world could be used as a
P4: A positive relationship exists between product inno-
measure when studying radical innovations alone, but is not
vativeness and newness to the customer.
necessary in order to describe really new or incremental
innovations. Our seven research propositions fit the broad framework
Thus, at the first-order on a macro level for product depicted in Fig. 2. It facilitates parsimonious conceptualiza-
innovativeness of an innovation, tion and, more importantly, offers an operationalization that
may be easily tested. This single construct ‘product inno-
P1a: The greater the discontinuity in the industry’s mar-
vativeness’ for technology-based projects can be utilized as
keting S-curve, the higher the degree of newness of
a mediating or moderating variable or it can also be used to
the innovation.
split innovations into product type categories. We also sug-
P1b: The greater the discontinuity in the industry’s tech-
gest measures for testing this model based on extant litera-
nology S-curve (dissemination curve), the higher
ture (Table 6).
the degree of newness of the innovation.
Likewise at the first-order on a micro level,
7. Conclusions and future research
P2a: The greater the discontinuity in the firm’s market-
ing knowledge, the higher the degree of newness of
Once the ‘name game’ is resolved by allowing studies on
the innovation to the firm.
innovations to be evaluated along common dimensions, it is
P2b: The greater the discontinuity in the firm’s technol-
revealed that few empirical studies have identified the id-
ogy knowledge, the higher the degree of newness
iosyncrasies of the development process for radical and
of the innovation to the firm.
really new innovations. We find considerable anecdotal
evidence that radical innovations require unique and sophis-
6.2. Second-order factor
ticated development strategies, but little empirical evidence
to support these theories. It has been shown empirically that
The second-order factor shows the formative conceptu-
radical products entail greater risk [30,41,45], product
alization of the macro and micro perspective of product
champions are more valuable in the radical development
innovativeness. The greater the newness of the product
process [35,37], and radical innovation are best identified
innovation to the industry, the higher the product innova-
using both a technological and business perspective [22]. It
tiveness. The greater the newness of the product innovation
is just these few studies that have put the ‘radical innova-
to the firm, the higher the product innovativeness. Failure to
tion’ as the primary emphasis. Four additional studies [4,7,
evaluate both of these factors in the modeling of product
30,55] labeled innovations as ’radical’, however, the defi-
innovativeness will result in fatal errors to content validity.
nitions provided for ‘radical innovations’ and the projects
An innovation should never be evaluated for its innovative-
sampled could be considered ‘really new innovations’ as
ness based on only a macro or micro level. Thus,
they have been identified in this review. Thus, it is uncertain
P3a: A positive relationship exists between an innova- if the findings in these four studies are relevant only to
tion’s newness to the industry and its degree of radical innovation or to both radical and really new inno-
product innovativeness. vations.
P3b: A positive relationship exists between an innova- The Journal of Product Innovation Management’s May
tion’s newness to the firm and its degree of product 1998 Special Issue has contributed to half of the existing
innovativeness. empirically supported knowledge regarding really new in-
novations. Song and Montoya-Weiss [54] conducted an
6.3. Newness to the customer extensive study on the key differences in determinants of
new product success between really new and incremental
We have modeled newness to the customer as a reflective products. Really new product successes are positively im-
construct to product innovativeness. A product’s innova- pacted by increasing the proficiency level of strategic plan-
tiveness classification is never dependent upon the view- ning activities, whereas, working to improve proficiency in
point of the customer. This is an error of reversal of causal business and market opportunity analysis is counter produc-
inferences. The goal of identifying innovation typologies is tive for really new products. Other researchers have found
to build an understanding of how the firm must approach the that customer research is critical in the early development
development process of new products. Thus, to use the stages in order to assess the types and degrees of disconti-
customer’s perspective for identifying products would be nuities inherent in really new innovations [61]. Addition-
liken as letting the customer drive the innovative process of ally, managers are more likely to carry a risky NPD project
the firm. This viewpoint is not to be confused with com- through commercialization when the product is really new
pletely ignoring the customer when identifying innovation than when it is less innovative [50]. Although Colarelli
126 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

Table 6
Possible measures to use in empirical analysis

Micro-level/marketing measures Source

1. Customers/clients totally new to the firm • Cooper (1979)


2. New market approach (customer contact, advertising promotion etc.) • Cooper (1979)
3. New competitors for the firm • Cooper (1979)
4. Product use (needs served) new to the firm • Cooper (1979)
5. Class of service/product totally new to the firm • Cooper & de Brentani (1991)
6. Improvements/revisions to existing company products • Cooper & de Brentani (1991)
7. Satisfies clearly identified customer/client need • Cooper & de Brentani (1991)
8. Fit with managerial skills and preferences/expertise/resource capabilities • Cooper & de Brentani (1991)
9. Firm’s prior experience for selling product in this line of business • Green, Gavin, & Aiman-Smith (1995)
10. Product/service was more complex than we have introduced into the same market • Atuahene-Gima (1995)
11. Responds to important changes in customer needs/wants • Cooper & de Brentani (1991)
12. The product technology is new to the customer • Ali, Krapfel, & LaBahn (1995)

Micro-level/technology measures Source


13. Newness of the technology: how large is required technology change in order to develop the product • Goldenberg, Lehman, & Mazursky (1999)
14. Science and technology knowledge base newness to firm’s R&D • Green, Gavin, & Aiman-Smith (1995)
15. Production process new to the firm • Cooper (1979)
16. Product technological newness to the firm • Green, Gavin, & Aiman-Smith (1995)
17. Modification of technology currently in use at the firm • Colarelli O’Connor (1998)
18. Degree of difference for other products in technical characteristics or specifications • Lee & Na (1994)
19. Complexity of manufacturing technology • More (1982)

Macro-level/marketing measures Source


20. New to the world • Atuahene-Gima (1995)
21. Totally new competitive environment • Cooper & de Brentani (1991)
22. Consistent with existing customer values/operating systems • Souder & Song (1997)
23. Existence of potential demand only (no actual demand) • Cooper (1979)
24. Newness to the market • Cooper (1979)

Macro-level/technological measures Source


25. Science & technology (S&T) state of art within general scientific community • Green, Gavin, & Aiman-Smith (1995)
26. Level of S&T knowledge base within the general scientific community • Green, Gavin, & Aiman-Smith (1995)
27. Predictability of progress in S&T knowledge area within general scientific community • Green, Gavin, & Aiman-Smith (1995)
28. Modification of technology used in other industries • Colarelli O’Connor (1998)
29. Improvement/modification of technology in use elsewhere in the industry • Colarelli O’Connor (1998)
30. Innovation incorporates a substantially different core technology relative • Chandy & Tellis (2000)
to the previous product generation

O’Connor [10] used the label ‘discontinuous’, it can be market, but not new to the firm. These varying results
concluded that market learning for really new innovations appear to be symptomatic of the different definitions used
differ drastically from those associated with conventional for moderately innovative products.
new product development processes. We believe that the inconsistencies in labeling and op-
Four additional studies explored the differences between erationalizing innovations in the new product literature may
really new innovations and incremental innovations. Al- have contributed to the slow progression of knowledge in
though the innovations were labeled ‘original new products’ these areas. Using a critical review of the new product
[64], ‘significant innovations’ [37], ‘moderately innovative’ development literature in the marketing, management and
[31], and ‘medium newness to the firm’ [20], all these can engineering disciplines, we have suggested a typology for
be considered really new innovations. These studies reveal labeling innovation types and a method of operationalizing
that really new products are more diversification oriented product innovativeness. Our propositional inventory and
[64], that success can be increased by delaying launch [64], integrative framework represent efforts to build a founda-
and that managerial sponsorship is important for really new tion for the systematic development of a theory-based def-
innovations [37]. Kleinschmidt and Cooper [31] and Gold- inition of product innovativeness. Additional research is
enberg, et al [20] found contradictory results. By the Klein- needed to empirically test this proposed operationalization.
schmidt and Cooper definition, moderately innovative prod- However, we believe a framework is now in place for
ucts are not as successful as highly innovative or low researchers to provide continuity to their definition of prod-
innovative products, (a U-shaped relationship exists be- uct innovativeness.
tween innovativeness and success). Goldenberg, et al report ‘Incremental innovations’ incorporate product improve-
that successful products tend to be moderately new to the ments (features, benefits, price, manufacturing, process)
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 127

into innovations using existing technologies targeted to- ical’ innovations are identified in the new product develop-
wards existing markets. On a macrolevel, ‘really new’ prod- ment literature. Again, many researchers have varying def-
uct innovations result in either market discontinuities or initions of what is considered a technological innovation.
technology discontinuities but not both, and result in both Congruence in understanding what realm of new products
types of discontinuities on a microlevel. Really new prod- should be considered ‘technological’ will also greatly in-
ucts include new technologies to existing markets (product crease our knowledge of the innovation process.
line extensions or new product lines) or existing technolo-
gies to new markets (also new product lines). Most new
product innovations will fall into one of these two catego- Notes
ries. On a rare occasion, a radical innovation will emerge. It 1. Rosanna Garcia is a doctoral candidate in Marketing
will result in discontinuities in both the existing market & Supply Chain at Michigan State University. Her
structure and the existing technology structure. Radical in- research interests are in new product development and
novations result in the creative destruction or envelopment complex systems. Prior to joining academia, she
and suppression of the existing infrastructure. Examples worked as a new product manager in the telecommu-
include the steam engine, the World Wide Web and the nications industry for several years.
Bessemer steel manufacturing process. 2. Roger Calantone is the Eli Broad Professor of Mar-
How innovations are labeled is important if researchers keting and Product Innovation at Michigan State Uni-
want to increase their understanding of the development versity. His research interests include the study of the
process of different types of innovations. Future research is new product development processes, the management
needed to determine how really new product innovations of technology and the manufacturing and engineering
differ from radical innovations in altering the new product interface. He has published in several journals includ-
development process. Because of the rarity of radical inno- ing the Journal of Marketing, the Journal of Marketing
vations, this may be difficult to accomplishment without Research, the Journal of Product Innovation Manage-
reaching back into history. The goal for future researchers ment, Management Science and Marketing Science.
should be to help practitioners identify how the character-
istics of radical new products, compared to really new
products, will alter the new product development process. Acknowledgments
Radical innovations can rarely be planned; it is through the
creativity and genius of innovators and marketers that they The authors would like to acknowledge participants at
evolve into commercialized products. Researchers can help the 1999 PDMA International Conference for comments on
this process by identifying how to take that rare rose and an earlier version of this manuscript. We would also like to
give it a distinct place in the litany of innovations. thank two reviewers, as well as the editor of JPIM, for their
Another area for future research concerns the term ‘tech- helpful comments. Special thanks goes to Paul Rummel for
nology’. Research is needed to determine how ‘technolog- his assistance with modeling Boolean logic.
128 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132
R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132 129
130 R. Garcia, R. Calantone / The Journal of Product Innovation Management 19 (2002) 110 —132

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