A Value Cocreation Strategy Model For

A value cocreation strategy model for
improving product development performance

Yen Hsu
Department of Industrial Design, Tatung University, Taipei, Taiwan
Abstract
Purpose – The purpose of this study is to propose a model of a value cocreation strategy (VCS) for analyzing how enterprises adopt innovative,
marketing, and design strategies to achieve their performance goals through cocreation.
Design/methodology/approach – In the present study, a case study was conducted to establish a preliminary model. Subsequently, 1,000 NPD
project managers in information and communications technology industries were approached to complete a two-stage questionnaire survey. The first
survey investigated the VCSs they adopted for their marketing, innovation and design activities (valid questionnaires recovered⫽283). The valid
respondents completed a second survey measuring their NPD performance 18 months after launching a new product (valid questionnaires
recovered⫽247).
Findings – A conceptual was constructed to explain the effects of innovation marketing and design cocreation strategies on NPD performance. A
partial least squares method was used to test the model showing a good fit between the model and the survey data, indicating the applicability
of the proposed model. The innovation marketing and design cocreation strategies of the enterprises affected their NPD performance. Enterprises
adopting diverse cocreation strategies improved their NPD performance. The cocreation strategies in the model were independent and mediating
variables to NPD performance. A qualitative comparative analysis was performed to examine which strategy configurations affected NPD
performance and to explore any regular patterns in them. Finally, a cluster analysis was conducted to investigate four cocreation strategies: market
development, technology improvement, cost direction and customer service.
Research limitations/implications – Whether different industry categories involve different characteristics and whether different corporate
cultures cause inconsistent result in value cocreation warrants further in-depth investigation. In addition, the two surveys conducted in this study
were separated by 18 months, and thus, only the short-term NPD performance could be presented. Future studies are recommended to conduct an
extensive exploration of different industries, administer long-term surveys, investigate the different levels of influence of various types of enterprise
on the proposed research model or examine the degree of difference in the mechanisms and methods adopted for elevating innovation performance.
Practical implications – Enterprises can reference the proposed approach to optimize their product development and services according to their
organizational resources and market advantages to increase their market coverage.
Originality/value – This study was the first empirical study to examine critical factors, such as product innovation, marketing, design and value
cocreation strategies, and NPD performance by administering two-stage surveys. Enterprises can reference the proposed method according to their
organizational resources and market advantages to develop products and services efficiently and face the ever-changing market.
Keywords Marketing strategy, Innovation strategy, Design strategy, New product development (NPD) performance,
Value cocreation strategy (VCS)
Paper type Research paper
Enterprises endeavoring to create long-term competitive communication channel with consumers through the value
advantage must efficiently allocate their internal resources, cocreation process. In addition, enterprises can increase
pay attention to external stakeholders and create, deliver their market coverage by focusing on developing products
and manage customer value (Brashear et al., 2012; Ramirez, and services through promoting interdepartmental
1999). Ramaswamy and Gouillart (2010a, 2010b collaboration as well as collaboration with internal and
empirically investigated business cases in the USA and external stakeholders (Bhalla, 2010; Camarinha-Matos
determined that during new product development (NPD), et al., 2009a, 2009b; Nataraajan and Angur, 2014).
enterprises tended to emphasize innovative value over From the perspective of R&D, innovation determines an
product or service value. Value is derived from the enterprise n survival capacity when faced with future
outcomes cocreated through forming collaborative
partnerships in the value chain, which provides a
The author would like to thank the anonymous reviewrs for valuable
comments and suggestions during the review process. This study was
The current issue and full text archive of this journal is available on supported by the Minister of Science and Technology (MOST), Taiwan,
Emerald Insight at: www.emeraldinsight.com/0885-8624.htm ROC. The author would also like to thank the graduate students for
assistance data collection in the study process.
Received 10 November 2014

Revised 26 February 2015
Journal of Business & Industrial Marketing 2 July 2015
31/5 (2016) 695–715 10 October 2015
© Emerald Group Publishing Limited [ISSN 0885-8624] 4 February 2016
[DOI 10.1108/JBIM-11-2014-0221] Accepted 8 February 2016
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A value cocreation strategy model Journal of Business & Industrial Marketing
Yen Hsu Volume 31 · Number 5 · 2016 · 695–715
challenges (Gary and Peter, 2001). Consistent innovation is Literature review and framework development
driven by the motivation to maintain competitive advantages
Cocreation strategy
and expand operations (Baxter, 1995; Dittrich and Duysters,
Traditional management scholars have examined value
2007). In particular, during an economic recession, being able
creation according to the precondition that enterprises are the
to rapidly introduce new products to the market enables
creators of value. According to this model, value is created
enterprises to overcome difficulties and reverse adverse
solely by enterprises according to the value of their products
situations (Booz Allen and Hamilton, 1982; Christoph, 2007;
and services. Thus, relevant theories emphasize innovation
Dawes et al., 2007; Pugh, 1991; Ulrich and Eppinger, 2004). and competitiveness over technology, products and
From a marketing perspective, marketing and product design manufacturing processes. Among such perspectives, the value
are closely related (Luchs and Swan, 2011; Souder and Song, chain proposed by Porter (1980) is the most representative
1997; Zhang et al., 2007). When launching a new product, theory. Porter (1980) argued that value-creation activities are
marketing and design departments must continually interact related to production processes (e.g. material feeding and
and exchange information with each other (Conway, 2007; manufacturing) and service processes (e.g. product delivery
Paul and Martin, 2007; Petiot and Grognet, 2006). Effectively and sales). After the 1990s, business operations aimed at
coordinating enterprise marketing and design activities gives creating value tended to emphasize the influence of
impetus to product innovation (Gupta and Wilemon, 1990; stakeholders. For example, Stabell and Fjeldstad (1998)
Sherman et al., 2000). From the perspective of stakeholders, proposed two value operations – pattern of value shop and
marketing and R&D personnel must focus on the challenges value network – in addition to value chains. They indicated
posed by market dynamics, respond to the movements of that relevant parties participating in such activities are creating
competitors and integrate appropriate product design value. When consumers and stakeholders gain knowledge,
strategies according to interdepartmental goals established to value is created during the service provision process by using
guide the development of new products (Girard et al., 2007; the products. Such processes have been referred to as value
Luchs and Swan, 2011; Naidoo and Wu, 2014; Chhatpar, coproduction (Ramirez, 1999) and value cocreation (Prahalad
2007; Tsai, 2006). and Ramaswamy, 2004), which involves multiple actors
A considerable volume of research has investigated methods engaging in value coproduction activities (Ramirez, 1999).
for jointly developing products and services, efficiently To emphasize service science concepts, enterprises have
integrating business design processes, and improving business endeavored to increase the value of tangible products and
performance (Andi and Minato, 2003). Several studies have intangible services. In an empirical case in the USA,
suggested that NPD performance can be improved by Ramaswamy and Gouillart (2010a, 2010b) determined that,
controlling enterprise product design processes (Durward to enterprises, innovation value is more critical than product
et al., 1998; Olson, 1994; Song et al., 1997). Product design is or service value when developing new products. The value
a critical value cocreation activity for enterprises and a crucial originates from the outcomes of collaboration and the
mechanism for integrating product development functions. experience gained by all partners in the value chain. Thus,
Moreover, design is a critical component of the entire value enterprises continually communicate with consumers through
chain (Aydin et al., 2007; Baxter, 1995; Fujimoto, 1991; Ge the process of value cocreation and develop products and
and Wang, 2007; Mozota, 2006; Olins, 1990; Renee et al., services through collaboration with various departments to
2007). Although Landwehr et al. (2013) and Griffith and increase market share (Bhalla, 2010; Camarinha-Matos et al.,
Rubera (2014) proposed a relational model that illustrates the 2009a, 2009b). Based on Camarinha-Matos et al. (2009a,
2009b, Bhalla (2010), Komulainen (2014), Leticia
strategies for and implementations of design, marketing, and
Santos-Vijande et al. (2013), Prahalad and Ramaswamy
innovation activities. However, empirical research on
(2004), the current study derived four cocreation dimensions,
relational model and specific practices for marketing,
as follows: emphasized the importance of customer opinions
innovation, design and NPD is scant (Hsu, 2015).
(CS1), applying customer intellectual capital (CS2), customer
Accordingly, this proposed a model of a value cocreation
participation (CS3) and rapidly responding to customers.
strategy (VCS) for analyzing how enterprises adopt
innovative, marketing and design strategies to achieve their NPD performance
performance goals through cocreation. Numerous studies have indicated that value creation can be
In the present study, NPD project managers in information achieved only through positive organizational activities. Jiang
and communications technology (ICT) industries were and Li (2009) reported that enterprises can engage in product
recruited as for two surveys. The ICT industry was selected innovations and process innovations to enhance their
because new products and services have a short life cycle in performance in developing competitive products (Meier,
this industry. The proposed VCS conceptual model was tested 2011). Therefore, an effective organizational structure can
using survey data on the innovation, marketing, design, improve corporate performance and competitiveness
cocreation strategies they adopted and their subsequent NPD (Gattiker, 1990). NPD performance can serve as an indicator
performance. In addition, the proposed VCS model exhibited for evaluating an enterprise’s organizational structure and
a favorable fit to the survey data, and the effects of the VCS strategies (Islam et al., 2013).
model variables on NPD performance were subsequently Excellent NPD performance is the goal of any enterprise
analyzed. Finally, various strategy configurations derived from (Baxter, 1995; Mumin, 2010; Ciriaco et al., 2010), and
the VCS model were summarized, and their effects on NPD various perspectives have been proposed for measuring NPD
performance were compared. performance. Most studies have adopted financial and
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non-financial indicators to objectively measure NPD dimensions: product (MS1), price (MS2), channel (place;
performance (Barczak, 1995; Ciriaco et al., 2010; Hendricks MS3) and promotion (MS4).
et al., 1996; Lee, 1992; Mat and Jantan, 2009; Robert and
Carolyn, 2003). Barczak (1995) suggested that NPD Innovation strategy
performance indicators include sales amount, profitability, Innovation strategies refer to strategies in which enterprises
market share and overall satisfaction with new products. create an environment that is conducive to innovation.
Cooper and Kleinschmidt (1995) proposed a performance Enterprises can differentiate from their competitors by ensure
map for measuring the factors contributing to successful that their products and services are unique (Schuler and
product development including success rate, percentage of Jackson, 1987). Enterprises can use their own resources and
sales from new products, profitability relative to spending, technologies to create diverse configurations of innovation
technical success rating, sales impact, profit impact, meeting strategies as a guide to obtaining, developing, and utilizing
sales objectives, meeting profit objectives, profitability versus innovation, executing business strategies and improving firm
competitors and overall success. performance (Dziura, 2001; Gilbert, 1994; Tidd and Bessant,
Driva et al. (2000) examined the manufacturing industry 2009). In the current study, innovation strategies were
and proposed five NPD performance measurement indicators: classified according to the following three strategic
total project costs and the differences between actual and dimensions:
projected costs, completion time, product launch date and 1 Technological innovation. This dimension includes
project completion date. Leenders and Wierenga (2002) strategies in which enterprises allocate a higher proportion
indicated that NPD performance comprised NPD of R&D expenses to total revenue than their competitors
decision-making speed, NPD decision-making quality, NPD do (Kuczmarski, 1996). Other strategies relevant to this
speed, commitment to NPD decisions converted into actions, dimension are actively investing in applying for
NPD cost efficiency and capacity to respond to new trademarks, copyright and patents; continually
opportunities. Ulrich and Eppinger (2004) and Ciriaco et al. introducing new technologies to improve a product or
(2010) have proposed five dimensions for the performance production processes (Kuczmarski, 1996; Ulrich and
indicators of product development: product quality, Eppinger, 2004); and improving production process
product cost, development time, development cost and efficiency to achieve enterprise goals (Gobeli and Brown,
development ability. In addition, these scholars have 1987).
emphasized non-financial performance indicators including 2 Business model innovation. This dimension includes
enhanced product quality, customer familiarity with strategies in which enterprises propose innovative
products and corporate image. For the present study, the products or services (Johne, 1999; Yoon and Lilien,
discussed NPD performance measurement indicators were 1985); modify, update or extend existing products or
classified into financial and non-financial indicators, from introduce new product lines (Kuczmarski, 1992; Ulrich
which six performance indicators were derived. Financial and Eppinger, 2004); and alter or redefine target
indicators were as follows: sales volume (NP1), sales amount customers (Atuahene-Gima, 1996).
(NP2) and profits (NP3). Non-financial indicators were as 3 Management innovation. This dimension includes
follows: enhanced corporate technology competence (NP4), strategies in which enterprises develop and manage
improved corporate image (NP5) and customer product distribution channels in response to external
evaluations (NP6). environmental changes (Chacko, 1988; Johne, 1999),
solve customer complaints in a timely and effective
manner (Johne, 1999), actively adopt new management
Marketing strategy
methods to improve organizational performance, encourage
Kotler (1997) defined marketing strategies as a series of
employee innovation by offering monetary incentives or
working principles aimed at providing services to customers
welfare systems (Higgins, 1995; Subramanian and
and achieving profit goals. Armstrong and Kotler (2003)
Nilakanta, 1996) and adopt performance measurements to
reported that marketing strategies are formulated to guide
encourage R&D innovation (Gilbert, 1994).
enterprises through allocating resources to meet target
customer needs more effectively and efficiently than Accordingly, in the present study, innovation strategies were
competitors can. Cravens et al. (1999) claimed that marketing divided into technology (IS1), business model (IS2) and
strategies include branding, low-cost, channel and innovation management (IS3) strategy dimensions.
strategies. The term innovation strategy implies a close
relationship between marketing strategies and product Design strategy
innovation. In addition, scholars have proposed various Design strategies are effectively overall business strategy
arguments about which marketing strategies are more guidelines for designing new products (Crawford, 1994).
effective. However, among all research perspectives, the Olson et al. (1998) argued that a product design strategy is a
marketing mix, which comprises the dimensions of product, path to achieving corporate goals by effectively distributing
price, place and promotion, is arguably the most frequently resources and negotiating design strategies. Thus, design and
used tool for explaining marketing strategy types (Kotler, enterprise strategies are mutually dependent (Oakley, 1990).
1997). Following the logic of previous studies (Eleri and Design strategies critically affect an enterprise’s
Robert, 2007; Hughes and Morgan, 2007; Kotler, 1997; competitiveness and effectively establish a communication
Perreault and McCarthy, 2003), the present study classified channel between upstream and downstream partners in the
the marketing mix variables into four primary strategy value chain (Hua et al., 2011). In specifying the goal of design
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strategies, Mozota (2003) cited three fundamental strategies Mozota, 2005). In addition, enterprises must combine their
(i.e. design for cost, design for image and design for focus) innovation strategy goals with their product design activities
based on the competitive strategies proposed by Porter and integrate their innovation resources to develop new
(1980). In addition, Kelley (1992) analyzed successful products through interorganizational communication and
product cases and proposed 12 strategic design factors. Sung negotiation (Claudio and Roberto, 2007; Mozota, 2006; Sari
and You (1999) claimed that design strategies belong to the et al., 2007; Sung and Gilmour, 2002). On the basis of this
actual responses of organizational design innovation activities. close relationship between innovation and design strategies
Integrating the strategic design factors proposed by Kelley (Song et al., 2014), the following hypothesis was proposed:
(1992), they produced ten product design factors and defined
product design strategies as decision-making processes aimed H2. The innovation strategy of an enterprise considerably
at achieving product design goals and deriving unique influences design strategy: enterprises integrate
competitive advantages in design. Thus, design strategies resources and combine innovation strategy goals with
effectively provide a pathway to achieving product innovation design processes to develop new products and services;
goals. When customer needs and competitor influences are in this process, innovation strategies correlate
analyzed in combination with an enterprise’s core R&D significantly with design strategies.
abilities, design teams can execute design strategies to achieve Relationship between marketing and design strategies
the performance goals of the enterprise (Hill et al., 2014; Marketing and product design are closely related (Luchs and
Simoni et al., 2014). In the current study, the design strategy Swan, 2011; Roy and Bruce, 1984; Souder and Moenaert,
perspectives of Mozota (2003) and Kelley (1992) were 1992; Souder and Song, 1997; Zhang et al., 2007). When
adopted to divide product design strategies into the following launching a new product, marketing and design departments
dimensions: strengthen R&D capacity (DS1), reduce must continually interact and exchange information with each
production costs (DS2), ensure product quality (DS3) and other (Conway, 2007; Paul and Martin, 2007; Petiot and
promote enterprise image (DS4). Grognet, 2006). Effectively linking enterprise marketing
and design activities stimulates product innovation (Gupta
Research framework and hypotheses and Wilemon, 1990; Sherman et al., 2000). Several studies
Relationship between innovation and marketing strategies have claimed that design activities can be a critical integration
Berends et al. (2014) asserted that innovation processes and resource of enterprises, representing a crucial mechanism for
outcomes can be differentiated by combining marketing and integrating product development functions. In addition,
innovation strategies. Specifically, marketing strategies can be design is a series of segments in the entire enterprise value
used to guide product innovation toward a correct direction. chain (Aydin et al., 2007; Baxter, 1995; Bruce and Jevnaker,
When launching a new product, R&D and marketing 1998; Fujimoto, 1991; Ge and Wang, 2007; Olins, 1990;
departments must continually exchange information Twigg, 1998). Thus, enterprises must combine their
(Conway, 2007; Paul and Martin, 2007; Petiot and Grognet, marketing and product design strategy goals and integrate
2006). Effectively connecting marketing and design activities their resources to develop new products through
gives impetus to product innovation (Gupta and Wilemon, interorganizational communication and negotiation (Bloch,
1990; Sherman et al., 2000). Thus, enterprises that adopt 2011; Luchs and Swan, 2011; Souder and Song, 1997).
appropriate innovation and marketing strategies can enhance Accordingly, the current study proposed the following
their competitiveness and provide added value to customers hypothesis:
(Berends et al., 2014). Accordingly, the following hypothesis
was proposed: H3. The marketing strategy of an enterprise considerably
influences design strategy: enterprises integrate their
H1. The innovation strategy of an enterprise considerably resources and combine marketing strategy goals with
influences marketing strategy: enterprises effectively design processes to develop new products and services;
utilizing their innovation and marketing strategies can in this process, marketing strategies correlate
provide customers with added value, wherein significantly with design strategies.
innovation strategies correlate significantly with
marketing strategies. Cocreation strategies and new product development performance
The interaction between an enterprise’s external environment
Relationship between innovation and design strategies and its organizational structure shows that these two factors
Effective product innovation or service development is not are closely associated. Specifically, enterprises invariably
only crucial to enterprise survival but also a driver for interact with their external environment and cannot exist
maintaining competitive advantages (Driva et al., 2000; Jamie independent of other organizations; thus, the environment in
and Costas, 2007; Mozota, 2003; Pawar and Driva, 1999; which an enterprise is situated is a crucial factor influencing its
Veryzer and Mozota, 2005). Enterprises must integrate operational performance (Scott and Westbrook, 1991;
innovation strategy goals with relevant product design Wilding et al., 2012). Daft et al. (1988) indicated that
activities to develop new products (Dell’Era and Verganti, responding to the environment is imperative for organizational
2007; Mozota, 2006; Sari et al., 2007; Sung and Gilmour, survival; in other words, enterprise survival and external
2002). When an enterprise innovates one of its products, all environmental changes are inseparable. Unpredictable
strategic levels of the enterprise must be coordinated to changes in the external environment can passively influence
implement the overall strategy of the enterprise (Marxt and the value chain in an enterprise’s entire organizational
Hacklin, 2005; Renee et al., 2007; Silbiger, 2005; Veryzer and structure. Therefore, enterprises must possess the following to
698
respond to changes in the environment: managerial flexibility integrating R&D and marketing activities. Gupta and
and responsiveness, an effective VCS, an ongoing Wilemon (1990) investigated interactions between R&D and
understanding of customer perceived value and the capacity to marketing departments and determined that product
implement innovation and change (Ahuja and Carley, 1999; innovation in high-technology industries relies on close
Ulkuniemi et al., 2011; Singh et al., 2012). cooperation between these departments. Liu and Yang (2014)
Enterprises can improve their NPD performance by and Kinchen (2010) have indicated that product design
performing appropriate development processes (Song et al., activities can guide marketing strategies and realize the
1997; Olson, 1994; Durward et al., 1998). When enterprises development of physical products. Sherman et al. (2000)
create innovative products, all strategic levels must collaborate claimed that integrating the functions of product development
in the cocreation process to ensure that the overall strategy of and marketing departments has a crucial influence on the
the enterprise is executed (Mozota, 2006; Renee et al., 2007). product development cycle, and many previous studies have
Ritala et al. (2013) and Ritala and Huizingh (2014) have shown that enterprises can improve their NPD performance
claimed that a VCS can be utilized to integrate innovation, by integrating their product development processes (Carlsson,
marketing and design strategies to achieve enterprise 1991; Durward et al., 1998; Gupta et al., 1985; Griffin and
performance goals. Thus, enterprises can effectively develop Hauser, 1996; Lau et al., 2007; Olson, 1994; Pinto et al.,
innovative products by applying a VCS, which benefits both 1993; Ruekert and Walker, 1987; Rusinko, 1997; Song et al.,
customers and enterprises by enhancing customer satisfaction 1997). Accordingly, the present study proposed the following
and enterprise brand value. Accordingly, the present study hypothesis:
proposed the following hypotheses:
H7. The marketing strategy of an enterprise considerably
H4. The marketing strategy of an enterprise considerably influences NPD performance: enterprises adopt
influences value cocreation: in response to the external marketing strategies to develop innovative products and
environment and market competition, enterprises services and enhance customer satisfaction;
integrate their resources and adopt cocreation accordingly, marking strategies correlate significantly
processes to fulfill marketing strategy goals and develop with NPD performance.
new products and services; accordingly, marketing
Design strategies and new product development performance
strategies correlate significantly with cocreation
Product design strategies and NPD performance are closely
strategies.
related (Cooper and Kleinschmidt, 1987; Souder and Song,
H5. The innovation strategy of an enterprise considerably 1997; Ulrich and Person, 1998). An enterprise’s investment in
influences value cocreation: in response to the external product design can be evaluated according to its NPD
environment and market competition, enterprises performance (Driva et al., 2000; Pawar and Driva, 1999). In
integrate their resources and adopt cocreation addition, maximizing NPD performance is a critical goal for
processes to fulfill innovation strategy goals and enterprises (Baxter, 1995; Ciriaco et al., 2010; Mumin, 2010).
develop new products and services; accordingly, Vickery et al. (2013) indicated that enterprises exhibiting
innovation strategies correlate significantly with diverse design strategy types demonstrated different financial
cocreation strategies. and non-financial performance levels. Accordingly, the
current study proposed the following hypothesis:
H6. The design strategy of an enterprise considerably
influences value cocreation: in response to the external H8. The design strategy of an enterprise considerably
environment and market competition, enterprises influences NPD performance: enterprises adopt design
integrate resources and adopt the cocreation process to strategies to develop innovative products and services;
fulfill the proposed design strategy goals and develop accordingly, design strategies correlate significantly
new products and services; accordingly, design with NPD performance.
strategies correlate significantly with cocreation Innovation strategies and new product development performance
strategies. Innovation strategies can be deployed to rapidly introduce
H9. The value cocreation of an enterprise considerably new products into the market, which can assist enterprises in
influences NPD performance: in response to the overcoming difficulties and reversing adverse situations (Booz
external environment and market competition, Allen and Hamilton, 1982; Christoph, 2007; Pugh, 1991;
enterprises adopt cocreation strategies to develop Ulrich and Eppinger, 2004). Enterprises must combine their
innovative products and services and enhance customer innovation strategy goals with their product design tasks and
satisfaction; accordingly, cocreation strategies correlate integrate their innovation resources to develop new products
significantly with NPD performance. through interorganizational communication and negotiation
(Sung and Gilmour, 2002; Mozota, 2006; Claudio and
Marketing strategies and new product development performance Roberto, 2007; Sari et al., 2007). Numerous studies have
Souder and Song (1997) asserted that marketing strategies are suggested that NPD performance can be improved by
closely related to product development. Marketing strategies efficiently integrating the enterprise innovation process and
can be used as a guide to improve product quality (Jeremy capacity (Andi and Minato, 2003; Carlsson, 1991; Durward
et al., 2005) and implementing product R&D processes et al., 1998; Griffin and Hauser, 1996; Gupta et al., 1985;
(Luchs and Swan, 2011). Souder and Moenaert (1992) Handfield et al., 1999; Olson, 1994; Pinto et al., 1993; Pullen
reported that successful technology application entails et al., 2012; Ruekert and Walker, 1987; Rusinko, 1997; Song
699
et al., 1997; Zhao et al., 2014). However, Roger et al. (2006) Formal questionnaire survey
indicated that the effect of innovation strategies on NPD From the TEEMA database, 1,000 enterprises were randomly
performance is mediated by various factors. Accordingly, the sampled for the two formal surveys. After repeated follow-up
present study proposed the following hypothesis: tracks, valid questionnaires were retrieved from 283
enterprises for the first survey. After a new product launch
H10. The innovation strategy of an enterprise considerably period of 18 months, the enterprises that responded to the first
influences NPD performance: enterprises adopt survey were surveyed a second time to obtain data on their
innovation strategies to develop innovative products and NP, from which 247 valid questionnaires were recovered,
services and enhance customer satisfaction; accordingly, yielding a 24.7 per cent effective recovery rate.
innovation strategies correlated significantly with NPD This study adopted the partial least squares (PLS) method,
performance. which is an analysis technique for constructing and examining
predictive models, particularly causal relationships between
Figure 1 depicts the VCS conceptual model and research
latent variables. The PLS method is superior to common
hypotheses (H1-H10) derived from the literature.
linear structural relations models and widely used in the fields
of management and marketing (Chen and Su, 2011; Dawes
Research methods et al., 2007; Law and Ngai, 2008; Qureshi and Compeau,
Sample and data collection 2009; Real et al., 2006; Wetzels et al., 2009).
Pretest questionnaire survey The PLS method was adopted because:
To develop a pre-test questionnaire, a focus group interview ● it can include multiple dependent and multiple
was conducted to determine the research participants, scope independent variables;
and relationship among the proposed research dimensions. ● it can be used to control multicollinearity among
Seven experts (four product design managers and three design independent variables;
scholars) were invited to discuss some relevant preliminary ● it maintains robustness, even with noisy or missing data;
cases and the structure of the proposed conceptual model. ● it can be used to perform strong predictions for
The experts ascertained that the measurement variables independent latent variables based on response variables;
extracted from the literature were suitable for the current ● it allows for reflective and formative latent variables;
study, and the pre-test questionnaires were administered. ● it can be applied to small samples; and
Respondents indicated their level of agreement with each item ● it is not subject to distributional constraints (Pirouz,
in the questionnaire by using a five-point Likert scale ranging 2006).
from 1 (Never or do not agree at all) to 5 (Always or totally agree). Bootstrapping was performed 1,000 times on the
For the pre-test questionnaire survey, 200 NPD project questionnaire data to estimate and infer the parameters.
managers were randomly selected from the Taiwan Electrical
and Electronic Manufacturers’ Association (TEEMA)
database, and 42 questionnaires were recovered. A factor Qualitative comparative analysis
analysis and reliability analysis were conducted to verify the After the VCS conceptual model was verified, the strategy
construct validity and questionnaire reliability. The results configurations contributing to high and low NPD
showed that the meaning of all the variables could be fully performance were investigated to identify any regular patterns
explained according to the extracted factors, indicating that in them. Accordingly, following Fiss (2007, 2011), a fuzzy set
the constructs were valid. The cocreation strategy (CS), qualitative comparative analysis (QCA) was conducted to
marketing strategy (MS), innovation strategy (IS) and design explore the relationships among the strategy configurations by
strategy (DS) variables significantly and positively correlated using fsQCA Version 2.0 (Drass and Ragin, 1999). In
with NPD performance (NP; Pearson correlation coefficient addition, Boolean algebra was employed to refine the strategy
⫽ 0.878, p ⬍ 0.01). In addition, all items attained Cronbach’s configurations and adopted set relations and logical
␣ values higher than 0.8, demonstrating adequate reliability. computation rules among the set to enable investigating the
Accordingly, a formal questionnaire survey was conducted strategy configurations (Ordanini et al., 2014).
using the validated questionnaire constructs (see Appendix). Development of set-membership measures
To implement the fuzzy set QCA method, the variables were
transformed into sets calibrated according to three thresholds:
Figure 1 VCS conceptual model
fully-in membership; fully-out membership; and neither
fully-in nor fully-out membership (Ragin, 2008). After the
thresholds were confirmed, fsQCA was employed to confirm
calibration completion.
In this study, a five-point Likert scale was employed to
measure the independent variables following the method for
treating continuous variables proposed by Fiss (2007) and
Ragin (2008); subsequently, the responses of 1 (Never or do not
agree at all), 3 (Maybe) and 5 (Always or totally agree) were
recoded as “fully out” (membership ⫽ 0), “neither fully in nor
fully out” (membership ⫽ 3) and “fully in” (membership ⫽
1), respectively.
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Property space Table III shows the standardized loading, composite reliability
QCA starts by defining the property space, which consists of and AVE of all factor dimensions. The composite reliability
all of the possible configurations of conditions leading to an values of all the primary dimensions are 0.895 (MS), 0.868
outcome of interest. Because the property space delimits the (IS), 0.912 (DS), 0.899 (CS) and 0.904 (NP). The overall
potential explanations of the outcome, the conditions should composite relatability is 0.896, which is higher than the
be carefully chosen and theoretically grounded (Ordanini standard value of 0.70 recommended by Hulland (1999),
et al., 2014). To analyze the relationships and influences of indicating that the model demonstrates adequate internal
firm size (FS) and business type (BT) in each configuration, consistency. In addition, the AVEs of the primary dimensions
the present study investigated the following six conditions and are 0.871 (MS), 0.864 (IS), 0.901 (DS), 0.878 (CS) and
outcomes of NPD performance: IS, MS, DS, CS, FS and BT. 0.893 (NP). The overall AVE is 0.881, which is higher than
A total of 64 combinations of the condition variables were the 0.5 standard value recommended by Fornell and Larcker
obtained (i.e. 26 ⫽ 64 combinations). Following the methods (1981).
employed by Fiss (2011) and Ragin (2008), the present study The direct and indirect relationships between each strategy
excluded the combinations involving fewer than three samples were determined according to the conceptual model shown in
and with a raw consist smaller than 0.8. Finally, Table I shows Figure 2. The standardized loading of the model reached the
the 15 combinations and 181 samples that were obtained level of statistical significance, and the standardized path
through this process. In the table, the strategy configurations coefficient also achieved statistical significance. Moreover, the
are presented as rows. individual standardized loading is higher than that of the other
factors. In general, the reliability and validity of the model
were acceptable, and the R2 values were used to determine the
Data analysis and results explanatory effect.
Data accuracy analysis
Table II lists the means, standard deviations (SDs), average Hypothesis tests
variance extracted (AVE) squared and a correlation matrix of As depicted in Figure 2, IS directly affected MS, DS, CS and
the primary dimensions (i.e. MS, IS, DS, CS, NP, FS and NP. The direct effect value of IS on MS is 0.513 (␤ ⫽ 0.513,
BT). p ⬍ 0.01), whereas the indirect effect value is 0.347, reaching
Table I Truth table indicating NPD performance results generated by conditions

MS IS DS CS FS BT NP Cases (%) Raw consist Sym consist
1 1 0 1 1 1 1 23 9.58 0.915 0.782
1 1 0 1 1 1 1 5 2.08 0.915 0.782
1 1 0 0 1 1 1 31 12.92 0.913 0.773
1 0 1 1 1 1 1 38 15.83 0.892 0.795
1 1 1 1 1 1 1 12 5.00 0.876 0.792
0 1 0 1 1 1 1 5 2.08 0.869 0.758
0 1 1 0 1 0 1 4 1.67 0.867 0.796
0 1 1 1 0 0 1 27 11.25 0.866 0.784
1 1 1 0 1 1 1 5 2.08 0.861 0.807
1 0 1 0 0 1 1 3 1.25 0.854 0.801
0 0 0 0 0 1 1 6 2.50 0.847 0.863
1 0 0 1 1 0 1 10 4.17 0.846 0.756
1 0 0 0 1 0 1 4 1.67 0.841 0.785
0 0 1 0 1 0 1 3 1.25 0.835 0.836
0 0 0 1 1 1 1 5 2.08 0.828 0.804
Table II A correlation matrix and AVE squared for all items

Mean SD MS IS DS CS NP FS BT
MS 4.505 0.236 (0.758)
IS 3.683 0.513 0.834 (0.746)
DS 4.382 0.216 0.792 0.823 (0.811)
CS 3.916 0.389 0.773 0.851 0.873 (0.771)
NP 4.139 0.413 0.836 0.901 0.818 0.852 (0.797)
FS 3.374 0.321 0.785 0.841 0.793 0.802 0.813 (0.803)
BT 4.019 0.265 0.716 0.867 0.861 0.799 0.810 0.771 (0.754)
Notes: MS ⫽ marketing strategy; IS ⫽ innovation strategy; DC ⫽ design strategy; CS ⫽ co-creating strategy; NP ⫽ new product development
performance; ( ) ⫽ AVE2; SI ⫽ size; BT ⫽ business type
701
Table III Accuracy analysis statistics

Core constructs Item CLMS CLIS CLDS CLCS CLNP Alpha SL CR AVE
MS MS1 0.916 0.883 0.875 0.821 0.851 0.901 0.903 0.895 0.871
MS2 0.923 0.868 0.882 0.813 0.845
MS3 0.912 0.899 0.837 0.797 0.861
MS4 0.862 0.854 0.846 0.793 0.827
IS IS1 0.837 0.905 0.841 0.823 0.856 0.858 0.875 0.868 0.864
IS2 0.852 0.861 0.804 0.816 0.835
IS3 0.849 0.859 0.832 0.813 0.798
DS DS1 0.918 0.948 0.967 0.916 0.931 0.894 0.965 0.912 0.901
DS2 0.924 0.916 0.972 0.907 0.941
DS3 0.924 0.936 0.953 0.903 0.918
DS4 0.927 0.931 0.969 0.912 0.944
CS CS1 0.813 0.847 0.849 0.851 0.787 0.883 0.844 0.899 0.878
CS2 0.785 0.827 0.793 0.841 0.823
CS3 0.833 0.819 0.788 0.837 0.798
CS4 0.825 0.833 0.796 0.847 0.781
NP NP1 0.951 0.963 0.927 0.943 0.983 0.872 0.969 0.904 0.893
NP2 0.944 0.948 0.965 0.941 0.977
NP3 0.943 0.931 0.924 0.938 0.951
NP4 0.944 0.929 0.962 0.967 0.975
NP5 0.925 0.958 0.918 0.915 0.963
NP6 0.941 0.912 0.953 0.945 0.963
Notes: CL ⫽ cross-loadings; SL ⫽ standardized loading; CR ⫽ composite reliability; AVE ⫽ average variance extracted; italic data ⫽ main cross-
loadings of core construct
Figure 2 PLS model for VCS
702
the level of significance. The overall effect is 0.860, and the is 0.651 (␤ ⫽ 0.651, p ⬍ 0.01), whereas the indirect effect
explanatory power reached 92.6 per cent. Thus, H1 is value is 0.163, reaching the level of significance. The overall
supported. effect is 0.814, and the explanatory power achieved 90.1 per
The direct effect value of IS on DS is 0.507 (␤ ⫽ 0.507, p ⬍ cent. These results support H8. The direct effect value of CS
0.05), whereas the indirect effect value is 0.351, reaching the on NP is 0.404 (␤ ⫽ 0.404, p ⬍ 0.05), reaching the level of
level of significance. The overall effect is 0.858, and the significance. Thus, H9 is partially supported.
explanatory power reached 87.8 per cent. These results In general, all the hypotheses are supported, except for H6
support H2. The direct effect value of IS on CS is 0.687 (␤ ⫽ and H9, which are partially supported.
0.687, p ⬍ 0.05), whereas the indirect effect value is 0.328,
achieving statistical significance. The overall effect is 0.891, Strategy configuration for achieving high new product
and the explanatory power reached 89.1 per cent. Thus, H5 is development performance
supported. The direct effect value of IS on NP is 0.601 (␤ ⫽ To examine which strategy configurations produce high NP,
0.601, p ⬍ 0.01), whereas the indirect effect value is 0.330, this study followed the notation method of Ragin and Fiss
which was statistically significant. The overall effect is 0.931, (2008). The results shown in Table I were obtained using
and the explanatory power reached 93.1 per cent. These Boolean algebra. The black circles (“”) represent the presence
results support H10. of a causal condition, the hollow circles with a cross in the center
Figure 2 illustrates the direct correlation effect of marketing (“”) represent the absence of a causal condition, and the blank
on DS, CS and NP. The direct effect value of MS on DS is spaces indicate that a causal condition may exist but has no
0.684 (␤ ⫽ 0.684, p ⬍ 0.05), reaching the level of significance, significant effect on the result. In addition, the large and small
and the explanatory power reached 87.8 per cent. Thus, H3 is font sizes indicate core and peripheral conditions, respectively.
supported. The direct effect value of marketing on cocreation Table IV provides the results.
is 0.440 (␤ ⫽ 0.440, p ⬍ 0.05), whereas the indirect effect Table IV presents the six types of casual path configurations
value is 0.276, achieving statistical significance. The overall (1, 2, 3a, 3b, 4, 5), with a solution coverage of 0.445, thus
effect is 0.716, and the explanatory power attained 89.1 per indicating that these casual paths account for 44.5 per cent of
cent. These results support H4. The direct effect value of MS the research sample.
on NP is 0.556 (␤ ⫽ 0.556, p ⬍ 0.05), whereas the indirect Following is a summary of the analysis of the causal paths in
effect value is 0.178, reaching the level of statistical Table IV:
significance. The overall effect is 0.734, and the explanatory ● MS contributed to high NP in Configurations 1, 2, 3b, and
power achieved 90.1 per cent. Thus, H7 is supported. 5. When MS is employed to elevate NP, the other
The direct effect value of DS on CS is 0.403 (␤ ⫽ 0.403, measures must be coordinated with the MS. For example,
p ⬍ 0.01), reaching the level of statistical significance. Thus, in Configurations 1, 2, and 3b, both IS and DS must be
H6 is partially supported. The direct effect value of DS on NS present. This finding is similar to the viewpoints suggested
Table IV High NP configurations

Solution
Configurations 1 2 3a 3b 4 5
Marketing strategy
Innovation strategy
Design strategy
Cocreation strategy
Firm size
Business type
Raw coverage 0.283 0.291 0.264 0.217 0.278 0.286

Unique coverage 0.021 0.016 0.007 0.035 0.021 0.019
Consistency 0.811 0.802 0.800 0.805 0.813 0.807
Solution coverage 0.445
Solution consistency 0.803
703
by Armstrong and Kotler (2003), whom indicated that collaboration among various departments, suppliers,
MSs guide enterprises to use their resources efficiently, employees, and other interested parties is necessary to
under the assumption that they can satisfy market improve market coverage.
demands more effectively than their competitors can, ● Neither FS nor BT contributed significantly to high NP.
thereby achieving their marketing objectives. FS is present only in Configurations 3a and 3b, and BT is
● IS contributed significantly to high NP. Among the six present only in Configurations 1, 2, and 5.
configurations, IS is absent only from Configuration 5.
Adopting IS to elevate NP in Configurations 1, 2, 3a, 3b,
and 4 would require DS and IS objectives to be Strategy configurations leading to low new product
coordinated. This finding indicates that to successfully development performance
develop new products, an enterprise must coordinate its IS This study adopted the method proposed by Ragin and Fiss
and DS objectives (Dell’Era and Verganti, 2007; Mozota, (2008) to examine which strategy configurations resulted in
2006; Sari et al., 2007; Sung and Gilmour, 2002). low NP. The results in Table I were processed using Boolean
● DS contributed significantly to high NP and is present in algebra, yielding results as shown in Table V, which presents
all six configurations, indicating that DS and NP are the five types of casual path configurations (i.e. 1, 2a, 2b, 3, 4).
closely related (Cooper and Kleinschmidt, 1987; Souder The solution coverage of 0.421 indicates that these five
and Song, 1997; Ulrich and Person, 1998) and that the configurations account for 42.1 per cent of the research
extent an enterprise invests in product design may be sample.
reflected in its NP (Pawar and Driva, 1999; Driva et al., Following is a summary of the analysis of the causal paths in
2000). For Configurations 2, 3a, 3b, and 4, if an enterprise Table V:
sought to elevate its NP through executing a DS, then its ● MS was limited in its contribution to low NP and is
IS and CS objectives must be coordinated with its DS present only in Configurations 3 and 4.
objectives. ● IS contributed significantly to low NP and is present in
● CS was limited in its contribution to high NP. Among the Configurations 1, 2a, 2b and 3. This finding suggests that
six configurations, CS is present in Combinations 2, 3a, the appropriateness of IS planning and execution is a
3b, and 4. If an enterprise employed a CS to elevate its NP critical factor contributing to low NP.
under Configurations 2, 3a, 3b, and 4, then its IS and DS ● DS was limited in its contribution to low NP and is present
objectives must be coordinated with its CS objectives. This in Configurations 1a and 3.
finding is in agreement with the viewpoints proposed by ● CS contributed significantly to low NP and is present in all
Camarinha-Matos et al. (2009a, 2009b) and Bhalla five configurations, indicating that the appropriateness of
(2010), whom indicated that value is cocreated through CS execution (e.g. emphasize the importance of customer
collaborative partnerships in the value chain. In addition, opinions, applying customer intellectual capital, enhancing
Table V Low NP configurations

Solution
Configurations 1a 2a 2b 3 4
Marketing strategy
Innovation strategy
Design strategy
Cocreation strategy
Firm size
Business type
Raw coverage 0.280 0.233 0.241 0.212 0.204

Unique coverage 0.017 0.026 0.008 0.014 0.020
Consistency 0.807 0.801 0.811 0.803 0.806
Solution coverage 0.421
Solution consistency 0.800
704
customer participation and rapidly responding to SPR ⫽ 6.01). The second stage employed the K-means
customers) was the main cause of low NPD performance. method in a non-hierarchical cluster analysis. The center
● FS contributed significantly to low NP and is present in of the four clusters was used as the starting point.
Configurations 1, 2a and 2b, thus implying that the Subsequently, the samples were reassigned to their nearest
appropriateness of FS-related factors was the primary center. Finally, the sample was divided into four strategic
cause of low NP. Such factors include the number of types: Type A (n ⫽ 54; 21.86 per cent), Type B (n ⫽ 69; 27.94
employees, amount of capital and business revenue. per cent), Type C (n ⫽ 41; 16.60 per cent) and Type D (n ⫽
● BT contributed significantly to low NP and is present in 83; 33.60 per cent).
Configurations 2a, 2b, 3 and 4, indicating that whether To determine how various strategic types differ in terms of
appropriate BS-based MS (using own-brand products or dimensions and the features of the strategic types, a one-way
products produced under original equipment manufacturer
multivariate analysis of variance was conducted using the
[OEM] license) is selected was the influential factors
seven types of dimensions as independent variables (i.e. MS,
contributing to low NP.
IS, DS, CS, NP, FS and BT) and four strategic types (i.e.
Types A to D) as dependent variables. The results indicated
Cluster analysis
that the Wilks’s lambda statistic achieved the level of
A total of 21 major strategic dimensions, involving marketing
significance at 0.01, suggesting that the four strategic types
(MS1-4), innovation (IS1-3), design (DS1-4), cocreation
(CS1-4) and NPD performance (NP1-5), were employed as differed significantly among the dimensions and variables.
the basis for clustering the questionnaire samples into strategic Analysis and clustering were further implemented according
groups to typify the features of the samples. This study to the average scores of the dimensions of the four strategic
employed a two-stage cluster analysis method (Anderberg, types (Table VI).
1973; Punj and Stewart, 1983). In the first stage, Ward’s As shown in Table VI, Type A enterprise scored the highest
method was employed. When variables were inputted, the in the dimensions of promotion (MS4), management (IS3)
data were normalized to obtain common units. Subsequently, and quality assurance (DS3). They also ranked highly in
the R2 values and spatial pattern regions (SPRs) were adopted capital (FS2) and focused operations in own brand markets
to determine the optimal number of clusters. The optimal (BT1). These strategic features indicated that Type A
number of clusters for the 247 samples was four (R2 ⫽ l.68, enterprise attempted to employ flexible MS and IS to
Table VI Single-factor ANOVA for all factors in each strategy type

Average factor score in each factor
Strategy Dimensions Type A Type B Type C Type D F p-Value
MS MS1 – Product ⫺0.254 (2) ⫺0.966 (3) ⫺1.202 (4) 0.613 (1) 17.352 0.00ⴱ
MS2 – Price ⫺0.257 (2) ⫺0.693 (4) 0.413 (1) ⫺0.463 (3) 15.019 0.00ⴱ
MS3 – Channel ⫺0.259 (2) ⫺0.486 (3) ⫺0.769 (4) 0.650 (1) 16.718 0.00ⴱ
MS4 – Promotion 0.591 (1) ⫺0.482 (3) ⫺0.442 (4) ⫺0.236 (2) 12.195 0.00ⴱ
IS IS1 – Technique 0.068 (2) 0.751 (1) ⫺0.433 (3) ⫺0.482 (4) 27.336 0.00ⴱ
IS2 – Commerce 0.149 (2) ⫺0.676 (4) ⫺0.274 (3) 0.765 (1) 15.686 0.00ⴱ
IS3 – Management 0.381 (1) ⫺0.853 (4) 0.199 (2) ⫺0.614 (3) 13.684 0.00ⴱ
DS DS1 – R&D ⫺0.675 (3) 0.419 (1) ⫺0.938 (4) 0.219 (2) 14.876 0.00ⴱ
DS2 – Cost ⫺0.371 (3) ⫺0.331 (4) 0.480 (1) ⫺0.125 (2) 25.458 0.00ⴱ
DS3 – Quality 0.864 (1) ⫺0.513 (4) 0.088 (2) ⫺0.466 (3) 13.416 0.00ⴱ
DS4 – Image ⫺0.286 (2) ⫺1.027 (3) ⫺1.258 (4) 0.635 (1) 17.614 0.00ⴱ
CS CS1 – Satisfy customer needs ⫺0.475 (3) ⫺0.758 (4) ⫺0.248 (2) 0.648 (1) 20.517 0.00ⴱ
CS2 – Increase operation efficiency ⫺0.361 (3) ⫺0.773 (4) 0.571 (1) ⫺0.336 (2) 21.346 0.00ⴱ
CS3 – Continue service innovation ⫺0.267 (2) ⫺0.512 (3) ⫺0.597 (4) 0.642 (1) 28.511 0.00ⴱ
CS4 – Rapidly respond to the market ⫺0.412 (3) ⫺0.472 (4) 0.601 (1) ⫺0.246 (2) 11.895 0.00ⴱ
NP NP1 – Sales volume 0.603 (1) ⫺1.212 (4) ⫺0.264 (2) ⫺0.976 (3) 19.352 0.00ⴱ
NP2 – Sales amount 0.419 (1) ⫺0.675 (3) 0.219 (2) ⫺0.938 (4) 14.876 0.00ⴱ
NP3 – Profit ⫺0.336 (2) ⫺0.773 (4) ⫺0.361 (3) 0.571 (1) 21.346 0.00ⴱ
NP4 – Technical promotion ⫺0.784 (4) 0.582 (1) ⫺0.347 (2) ⫺0.372 (3) 13.721 0.00ⴱ
NP5 – Image promotion 0.088 (2) ⫺0.466 (3) ⫺0.513 (4) 0.864 (1) 14.116 0.00ⴱ
NP6 – Customer appraisal 0.765 (1) ⫺0.676 (4) 0.149 (2) ⫺0.274 (3) 15.816 0.00ⴱ
FS FS1 – Employee Number ⫺0.276 (3) 0.147 (2) ⫺0.675 (4) 0.764 (1) 13.861 0.00ⴱ
FS2 – Capital 0.580 (1) ⫺0.131 (4) ⫺0.072 (3) 0.225 (2) 23.508 0.00ⴱ
FS3 – Revenue ⫺0.259 (2) 0.415 (1) ⫺0.465 (3) ⫺0.695 (4) 17.037 0.00ⴱ
BT BT1 – OBM 0.433 (1) ⫺0.363 (3) ⫺0.675 (4) ⫺0.257 (2) 14.019 0.00ⴱ
BT2 – OEM ⫺0.593 (4) ⫺0.265 (2) 0.641 (1) ⫺0.511 (3) 25.213 0.00ⴱ
Notes: ⴱ Represents reaching significance level of 0.01; number in parentheses represents the ranking order of the cluster average in each factor
705
emphasize the quality and service features of its products, promoting their corporate image (NP5) and are typically large
thereby expanding its share of the market. enterprises. Type D enterprises are ranked low in the
In addition, Type A enterprises are ranked second for product dimension of technique innovation (IS1); however, they
(MS1), price (MS2), channel (MS3), technique innovation emphasize the importance of other dimensions compared with
(IS1), commerce innovation (IS2), corporate image elevation the other typologies, indicating that this type of enterprise
(DS4) and continual service innovation (CS3). These results focuses on new service designs to rapidly launch new
indicate that such enterprise actively seek out market innovative products, and they adopt appropriate product
opportunities, strengthen their product price competitiveness design strategies to enhance the reliability and quality of their
and corporate image, continually innovate their services to products and services. Compared with the other typologies,
expand sales channels and actively seek innovations and this type of enterprise is a pioneer in new business markets. In
breakthroughs in production and sales techniques. These addition to the short-term objectives of sales growth, market
methods enable Type A enterprises to attain outstanding share and cost reduction, this type of enterprise emphasizes
results in the NP dimensions of sales volume (NP1), sales improving both corporate and product image and continually
amount (NP2) and customer appraisals (NP6). On the basis providing innovative products to customers. According to the
of the aforementioned strategic features, this study categorized aforementioned strategic features, this type of enterprise was
Type A enterprises a market development typology.
categorized as a customer service typology.
Type B enterprises are ranked the highest in the dimensions
Following the concept of the configuration school proposed
of technique (IS1), R&D strengthening (DS1) and technical
by Mintzberg et al. (2005), the present study considered that
competence promotion (NP4) for the enterprise NP; have
strategies and organizations can be divided into several
high revenues (FS3); and focus mainly on managing OEM
specific typologies, and that strategic actions are equivalent to
licenses. However, Type B enterprises are ranked low in price
the process of transformation from one typology to another
(MS2), commerce innovation (IS2), management innovation
(IS3), production cost reduction (DS2), customer needs typology (strategy formation as a process of transformation;
satisfaction (CS1), the increase of operation efficiency (CS2) Hausman et al., 2005; Rich et al., 2010). These four enterprise
and rapid response to the market (CS4). Therefore, compared typologies were divided into two dimensions, namely,
with the other typologies, Type B enterprises focus more on technology-oriented and business-oriented dimensions, to
product technique innovation, investing in the designing and form a strategy typology map (Figure 3). From an industrial
R&D of product production techniques and functions and perspective, enterprises in the market development typology
delivering these products to specific target markets through have a critical influence on business and technology industries,
appropriate marketing channels. In addition, Type B tend to employ innovative methods to offer products and
enterprises tend to be more competitive, can satisfy market services, actively expand their market coverage and increase
demands, leverage their business experiences, employ design the competitiveness of the industry. Enterprises in the
methods that add value to products and can offer the most technology improvement typology utilize technologies to drive
timely and high-quality services to customers. On the basis of product innovation and frequently achieve breakthroughs and
the aforementioned strategic features, Type B enterprises were usage innovations in product function. Enterprises in the cost
categorized as a technology improvement typology. direction typology emphasize supply chain integration,
Type C enterprises are ranked the highest in the dimensions employing designs that reduce costs and adopting moderate
of price (MS2), production cost reduction (DS2), increase of innovations for business models or technological techniques to
operational efficiency (CS2) and rapid response to the market achieve the most favorable R&D elasticity and responsiveness
(CS4). They also have fewer employees (FS1), are small- and to market strain. Enterprises in the customer service typology
medium-sized enterprises and focus mainly on OEM. tend to focus on actively innovating business activities;
Furthermore, these enterprises are ranked low in the following satisfying customer needs and values; and employing
dimensions: product (MS1), channel (MS3), promotion innovative business models to create, sell and deliver products
(MS4), strengthening of R&D capability (DS1), corporate and services with added value for customers.
image elevation (DS4) and continual service innovation
(CS3). Thus, enterprise of this type emphasize actively Figure 3 VCS type map
enhancing their operational efficiency and reducing
production costs, pay close attention to market dynamics and
customer demands to ensure that the products and services
they offer have the most favorable price competitiveness. Such
enterprise also actively employ adequate IS and adopt
appropriate considerations for designing products that
improve the reliability and quality of products and services.
On the basis of the aforementioned strategic features, Type C
enterprises were categorized as a cost direction typology.
Type D enterprises were ranked the highest in the
dimensions of product (MS1), channel (MS3), commerce
innovation (IS2), corporate image elevation (DS4), customer
needs satisfaction (CS1) and continual service innovation
(CS3). They also have favorable profits (NP3), focus on
706
Conclusion enterprises were ranked highest in their non-financial

performance indicators (enhanced technologies, image and
Previous studies have considered design activities and
customer evaluations). From the perspective of overall NP,
strategies as the integrated resources of enterprises and a
the enterprises in the market development typology exhibited
product integration mechanism in the entire innovation value
the highest level of performance, followed by those in the
chain (Baxter, 1995; Bruce and Jevnaker, 1998; Fujimoto,
customer value typology, then those in the cost direction
1991; Olins, 1990; Twigg, 1998; Wheelwright and Clark,
typology and finally those in the technology improvement
1992). However, most of these studies were cases or
typology.
individual conceptual interpretations that were not adequately
A total six types of causal path configurations resulted in
grounded in theory. The current study validated the
high NP, accounting for 44.5 per cent of the sample. Among
relationships among these matters, particularly among MS,
the various configurations, the effects of MS, IS and DS were
IS, DS and CS. The survey respondents were NPD project
statistically significant; in contrast, the effects of CS, FS and
managers that had rapidly launched new products or services
to replace existing products or services. Based on the IS, MS, BT were non-significant. These findings accord with the
DS, CS and NP data, this study proposed a VCS model. In viewpoints suggested by Camarinha-Matos et al. (2009a,
addition, survey data achieved a favorable fit to the VCS 2009b and Bhalla (2010), whom indicated that cocreated
model, validating the applicability of the proposed model. value derives from forming collaborative partnerships in the
The statistical analysis indicated that given the number of value chain. In addition, collaborations among various
surveys, this study satisfied the construct validity of the corporate departments (e.g. marketing, R&D and design
questionnaire. Specifically, the convergent validity and departments), suppliers, employees and other interested
discriminant validity of each variable reached the statistical parties were necessary conditions for increasing market
requirements. The PLS analysis results showed that the survey coverage.
data fit the proposed conceptual model, supporting the Five types of causal path configurations contributed to low
various hypotheses of this study. NP, accounting for 42.1 per cent of the sample. Among the
IS, MS, DS and CS influenced NP. Moreover, these various configurations, IS, CS, FS and BT had significant
strategies influenced NP through CS. In the VCS model, CS effects; in contrast, no significant effect was exerted by MS or
was an independent variable and mediated the relationship DS. These findings indicate that whether the following
between IS and NP. On the basis of the VCS model, the 15 methods were appropriately executed was an influential factor
primary dimensions of MS (MS1-4), IS (IS1-3), DS (DS1-4) contributing to low NP: satisfying customer needs, increasing
and CS (CS1-4) were used as the basis for a cluster analysis operation efficiency, continuing service innovation and
examining the cocreation strategies enterprises used. A responding rapidly to market changes.
two-stage cluster analysis was conducted to divide the samples Moreover, CS influenced NP through IS, MS and DS;
into four VCS typologies: market expansion, technology simultaneously, these strategic methods influenced NP
development, cost-oriented and customer value. through implementing an appropriate CS. Regarding the
To plot the VCS map in Figure 3, the four VCS typologies influences of the VCS model variables on NP, CS was both an
were distinguished along two dimensions: technology- and independent variable and a mediating variable. Based on the
business-oriented strategies. Enterprises employing a market VCS mode, 21 major strategic dimensions in marketing
expansion strategy had a considerable influence on the (MS1-4), innovation (IS1-3), design (DS1-4), cocreation
commercial and technological aspects of the industry. (CS1-4) and NPD performance (NP1-5) were employed as
Providing products and services and actively expanding their the basis to categorizing the samples into typologies. A
market coverage by employing completely novel methods two-stage cluster analysis was conducted to divide the sample
changed the industrial competitive environment substantially. into four typologies: market development, technology
Enterprises in the technology development typology inspire improvement, cost direction and customer service.
technological product innovation, and the products they These four typologies can be divided into two dimensions,
develop characteristically achieve breakthroughs in technology-oriented and business-oriented, to form a strategy
functionality and application. Enterprises in the cost-oriented typology map (Figure 3). For the industry, enterprises in the
typology typically employ innovative business models and market development typology have a substantial influence on
technologies featuring few innovations. Such enterprises seek business and technology industries. They also employ
to optimize their R&D flexibility and market contingency innovative methods to develop new products and services,
speed by focusing on supply chain integration and using actively expand their market coverage and are highly
design to reduce their costs. Enterprises in the competitive in their industry. Enterprises in the technology
customer-oriented typology emphasize using active business improvement typology typically utilize technology to drive
innovation to meeting customer needs and adding customer product innovation and frequently achieve breakthroughs in
value and create, sell and transmit customer value through product function and applications. Enterprises in the cost
innovative business models. direction typology emphasize supply chain integration,
Enterprises adopting diverse strategies demonstrated employ design approaches to reduce costs and adopt
varying levels of NP. Regarding the financial performance moderately innovative business models and technological
dimensions of sales volume and sales amount, the enterprises techniques to achieve optimally flexible R&D and rapidly
in market development typology outperformed those in the respond to market demands. Enterprises in the customer
other typologies. The enterprises in the customer value service typology focus on actively innovating business
typology were the most profitable. Furthermore, these activities and satisfying customer needs and values as well as
707
employ innovative business model to develop and sell customers contemplate and perceive the interactive
products and to deliver customer value. relationship between products/services and profits/losses,
This present study adopted the method proposed by Fiss thereby revealing the processes customers adopt when
(2011) and the perspectives on strategic typologies proposed evaluating product functions, services, relationship benefits,
by Miles et al. (1978). The findings indicate that enterprises monetary benefits and non-financial losses (Blocker and Flint,
can play the following four typological roles when selecting 2007; Rundh, 2011; Flint, 2004). Accordingly, to derive
strategies: prospector, analyzer, defender and reactor. competitive advantages, enterprises must first focus on
According to Miles and Snow, enterprises inevitably customer value perspectives and subsequently develop a series
demonstrate one of the four typologies during strategy of customer value activities.
selection. However, the present study found that the resources The findings of this study can enhance the results of
in most enterprises were less abundant than those in large previous studies (Claudio and Roberto, 2007; Gupta et al.,
enterprises, and that every decision has a critical role in an 1985; Souder, 1987; Li and Atuahene-Gima, 2001; Maidique
enterprise’s development track. Therefore, this type of static and Zirger, 1984; Mozota, 2006; Ritala et al., 2013; Ritala and
strategy classification method could easily overlook cases Huizingh, 2014; Sari et al., 2007; Sung and Gilmour, 2002).
where during the dynamic processes of enterprises, corporate Enterprises can combine MS or IS goals with product design
strategy typology can change according to market coverage activities. Enterprises can use the VCS to increase the
and product expansion, progress in technological innovation, efficiency of overall resource integration and facilitate
shifts in R&D focus and service innovation trends. interorganizational collaboration to develop innovative
In addition to proposing the concept of service cocreation products. As indicated by Christensen (1997), listening to
integration, the current study adopted four types of CS to customer opinions can have a negative influence on
explain how enterprises adopt IS, MS and DS to achieve technological innovation and prevent ongoing organizational
corporate performance objectives and the influences of various growth, resulting in the innovator’s dilemma (Cheng and
strategic methods on NP. Furthermore, specific strategic Chen, 2013; Woodside, 2006). Therefore, for enterprises
recommendations were provided for enterprises facing launching a new product, determining whether customer
dynamic markets. feedback and customer interaction interfere with NPD
decisions and thus influence innovation performance is a topic
Managerial implications warranting in-depth research in the future. The concept of
When confronted with market competition, enterprises can value cocreation proposed in this study differs from that
implement a VCS to connect innovative research and indicated in previous studies, which typically focus on value
development, marketing and design activities to promote cocreation solely from the perspective of enterprises, resulting
innovation and launch new products. To survive in a rapidly in customer value being evaluated from a one-sided
changing market environment, enterprises must improve their perspective. The concept of value cocreation places emphasis
managerial flexibility and responsiveness, adopt effective on organizations only interacting with their customers, but
VCSs, possess an ongoing understanding of customer also encouraging them to participate in the process of
perceived value and enhance their capacity to implement enterprise value creation to derive long-term and real benefits
innovation and change (Ahuja and Carley, 1999; for the organization. The empirical results of the present study
Groenewegen and Moser, 2014; Pels et al., 2009). The results suggest that value cocreation plays a crucial moderating role.
indicate that the cocreation strategies influenced and mediated Furthermore, in the business management domain,
its relationship with NPD performance and that different strategic management is a particularly unique field of
combinations of casual paths lead to different NPD discipline. At all decision-making levels, strategic
performance outcomes, indicating that when enterprises management incorporates all functional areas of a business.
support and adopt a VCS, their innovation, marketing and Ideally, decisions and actions in these areas must be
design activities have an increasingly significant influence on coordinated with an enterprise’s strategic direction, with
their NPD performance. Therefore, an enterprise’s capacity strategic decisions serving as the highest guiding principle.
for product innovation, marketing and design can elevate its During the strategic decision-making process, enterprises
NPD performance; in addition, adequately incorporating the must understand the external environment to ensure
following core perspectives of value cocreation can improve organizational survival, and they must build consensus and
NPD performance substantially: customer opinions, customer internal strength through efficient resource allocation to satisfy
interaction and customer participation. the personal goals of individual organizational members,
We determined that value cocreation was a crucial factor thereby promoting their willingness to continue contributing
influencing the relationship between enterprise internal to the organization. Through the process of our research
resources and profit performance. From the perspective of analysis, we determined that strategic decisions involve
customer value theory, enterprises must understand the numerous factors; nevertheless, the various strategic
characteristics of the products and services that customers viewpoints shared one common premise: the personal goals of
truly need by examining their customers’ views and values, as decision-makers are basically consistent with the
well as the ultimate goals for and outcomes of their products organizational goals. Under an open economic system,
and services. Enterprises can create value by the process of satisfying customers should be the top priority of enterprises.
learning, creating and delivering customer value (Brashear Similar to the concept of the power school proposed by
et al., 2012; Hakola, 2013; Ulkuniemi et al., 2011; Woodruff, Mintzberg et al. (2005), perhaps the decisions on resource
1997). Customer value perspectives can elucidate how allocation in an organization are derived from integrating and
708
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714
Appendix Innovation Strategy

IS1: Technology
IS1-1 Our R&D investment expenses account for a higher proportion of our total revenue compared with
our competitors.
Measurement Items
IS1-2 Our firm actively applies for trademarks, copyrights, and patents.
Please rate your perceptions about the described cocreation and new product development performance,
IS1-3 Our firm frequently introduces new technologies to improve products or manufacturing processes.
according to the following scale:
Never or do not Disagree Maybe Agree Always or totally IS1-4 Our firm continually seeks to improve production process efficiency.
agree at all agree IS2: Commerce
1 2 3 4 5 IS2-1 Our firm develops innovative products and services.
1. Co-creation Strategy IS2-2 Our firm improves, updates, and extends its product lines.
CS1: emphasize the importance of customer opinions IS2-3 Our firm reassesses its target customers and market segmentation strategy in a timely manner.
CS1-1 Customers are satisfied with our products and services. IS3: Management
CS1-2 During product development, our firm values customer feedback and considers such feedback IS3-1 Our firm adopts appropriate strategies corresponding to changes in the external environment.
when designing products. IS3-2 Our firm effectively solves customer complaints in a timely manner.
CS2: applying customer intellectual capital IS3-3 Our firm actively employs new management strategies to enhance organizational performance.
CS2-1 Our firm organizes created knowledge and information into a corporate system and process. IS3-4 Our firm increases employee salary or uses corporate welfare systems to encourage employee
CS2-2 Our firm emphasizes actively enhancing operational efficiency. innovation.
CS3: enhancing customer participation Design strategy
CS3-1 Our firm will continue to invite customers to participate in product R&D and design. DS1: Strengthen the R&D capacity
CS3-2 Our firm will continue to develop new creative services and knowledge. DS1-1 Our firm possess sufficient professional knowledge and competence in NPD to strengthen the
CS4: responding rapidly to customers efficiency of product design and development.
CS4-1 Our firm values customer feedback and considers such feedback when designing products.
DS1-2 Our firm designs new products by appropriating techniques from and collaborating with foreign
CS4-2 Our firm provides a platform for customers to obtain information and our platforms is updated
and domestic manufacturers.
regularly.
DS1-3 Our firm adjusts the ratio of R&D and design expenses to total sales amount to enhance its R&D
2. NPD Performance
capacity for product design.
NP1: Sales volume
DS2: Reduce production costs
NP1-1 Our products have achieved sales volume targets.
DS2-1 Our firm reduces overall product production cost by carefully selecting components and materials
NP2: Sales amount
NP2-1 Our products have achieved sales amount targets.
used in production.
NP3: Profits DS2-2 Our firm integrates product parts by adopting modular and standardized designs to manufacture
NP3-1 Our products have achieved profit targets. products that are easy to assemble and maintain.
NP4: Enhance corporate technology competence DS2-3 Our firm possesses adequate understanding of changes in the external environment and leverages
NP4-1 New products enhance corporate technology competence. our ability in designing products to respond to such changes.
NP5: Improve corporate image DS3: ensure product quality
NP5-1 New products improve corporate image. DS3-1 Our firm improves product reliability, durability, and maintenance to enhance the overall quality
NP6: Customer evaluation regarding the products of products.
NP6-1 Customers have provided positive evaluation on our new products. DS3-2 Our products adhere to all safety regulations and standards.
3. Marketing Strategy DS4: Promote enterprise image
MS1: Product DS4-1 Our firm develops products that feature unique aesthetics and style to create and enhance
MS1-1 Our products have high brand awareness. corporate, product, and brand image and value.
MS1-2 Our products are high quality. DS4-2 Our firm adopts design skills to enhance the other functions and values of a product under cost
MS1-3 Our product range is diverse. constraints.
MS2: Price FI: Firm size
MS2-1 Our products have competitive prices. FI1: The number of employees.
MS2-2 Our firm offers preferential discounts on products. FI2: Our total capital.
MS2-3 Customers can use various payment methods when purchasing our products. FI3: Our revenue.
MS3: Channel (place) BT: Business type
MS3-1 Our purchase mechanisms are safe and secure. BT1: Our products are mostly OBM products.
MS3-2 Purchasing our products is easy. BT2: Our products are mostly OEM products.
MS3-3 Customers can easily purchase our products through various marketing channels.
MS4: Promotion
MS4-1 Our product information is updated regularly.
MS4-2 Our firm occasionally offers discounts on products to customers.
MS4-3 Our firm frequently launches new promotions.
(continued)
715
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A value cocreation strategy model for

improving product development performance

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Table I Truth table indicating NPD performance results generated by conditions

Table II A correlation matrix and AVE squared for all items

Table III Accuracy analysis statistics

Figure 2 PLS model for VCS

Table IV High NP configurations

Raw coverage 0.283 0.291 0.264 0.217 0.278 0.286

Table V Low NP configurations

Raw coverage 0.280 0.233 0.241 0.212 0.204

Table VI Single-factor ANOVA for all factors in each strategy type

Conclusion enterprises were ranked highest in their non-financial

compromising on various personal ideas and benefits; in References

electronics industry”, IEEE Transactions on Engineering manufacturing environment”, International Journal of

Appendix Innovation Strategy

NP5: Improve corporate image DS3: ensure product quality

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