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A study of success and failure in product innovation: The case of the U.S. electronics industry
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1984
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Innovation ManagementProduct ManagementProduct DevelopmentManagementProduct InnovationU.s. Industrial InnovationNew Product DevelopmentU.s. Electronics IndustryTechnological InnovationTechnology TransferStrategic ManagementInnovationMarketingConsumer-driven Product DevelopmentIndustrial DesignInnovation StudyBusinessNew Product SuccessBusiness StrategyStanford Innovation ProjectTechnology
The Stanford Innovation Project investigates the challenges of creating new systems in the U.S. electronics industry, highlighting the inherent difficulty and uncertainty of product innovation. The study employed two surveys—an open‑ended survey of 158 new electronics products followed by a structured survey of 118—using pairwise comparison to assess innovation processes. The research identified eight key success factors for high‑technology product development—market knowledge, planning, marketing emphasis, management support, contribution margin, early entry, and alignment with existing strengths—and proposed a preliminary new‑product process model.
This paper summarizes the first phase of the Stanford Innovation Project, a long-term study of U.S. industrial innovation. As part of this initial phase, begun in 1982, two surveys were conducted: 1) an open-ended survey of 158 new products in the electronics industry, followed by 2) a structured survey of 118 of the original products. Both surveys used a pairwise comparison methodology. Our research identified eight broad areas that appear to be important for new product success in a high-technology environment: 1) market knowledge gained through frequent and intense customer interaction, which leads to high benefit-to-cost products; 2) and 3) planning and coordination of the new product process, especially the R&D phase; 4) emphasis on marketing and sales; 5) management support for the product throughout the development and launch stages; 6) the contribution margin of the product; 7) early market entry; 8) proximity of the new product technologies and markets to the existing strengths of the developing unit. Based on these results, a preliminary model of the new product process is proposed in the concluding section. There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system. Niccolo Machiavelli.