Thinking Outside the Box: An Absorptive Capacity Approach to the Product Development Process

In high technology markets, the development of new products has received widespread interest among marketing and management scholars. Popular wisdom suggests that a consumer driven approach to the product development process is key to a firm’s competitive success. Organizational learning research however has argued that a narrow focus on customer needs restricts a firm’s ability to search for unconventional product market opportunities. Hence, a greater openness to external ideas that extend beyond the interests of the consumer has been called for. In drawing on concepts of absorptive capacity and strategic alliances, this study develops a conceptual model to examine a firm’s product development process. This conceptual model is examined in the biotechnology industry. Regression analyses show a firm’s absorptive capacity exhibits a positive yet diminishing effect on a firm’s ability to introduce products to the market. Findings also indicate the type of knowledge possessed by a firm yields a distinct moderating effect to the product benefits of alliances