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The Impact of Industrial Design Effectiveness on Corporate Financial Performance*
Abstract
Despite the growing recognition of industrial design's value in creating sustainable competitive advantage, few studies have attempted to quantify the contribution that design makes to company financial performance. This article examines the relationship between industrial design and company financial performance in order to assess industrial design's contribution to this performance. Effective industrial design was evaluated by asking a panel of 138 industrial design experts to rank the industrial design effectiveness of publicly traded firms within nine selected manufacturing industries; the ranking process yielded 93 firms. Based on the rankings, firms within each industry were divided into two groups: those judged as exhibiting high design effectiveness versus those judged as low in design effectiveness. Audited financial data reported to the SEC across a seven‐year period from 1995 to 2001 were used to evaluate financial performance.
Using traditional financial ratios senior managers consider essential performance measures, those firms with high design effectiveness were hypothesized to have higher returns on sales, returns on assets, and growth rates of sales, net income, and cash flow than firms with low design effectiveness. High design effectiveness firms further were hypothesized to have higher stock market returns. These comprehensive, corporate financial measures incorporate expenditures made on industrial design (industrial designers' salaries, design consultants' fees, computer‐aided industrial design equipment) and expenditures that designers influence through their design choices (material costs, manufacturing equipment).
This analysis reveals that firms rated as having “good” design were stronger on all measures except growth rate measures. These results provide strong evidence that good industrial design is related to corporate financial performance and stock market performance even after considering expenditures on industrial design. Further, the patterns of financial performance over the seven‐year horizon suggest that these effects are persistent.
... [16] yaptıkları araştırmanın sonuçlarına göre ise inovasyon, üretim sürecini etkileyerek malzeme kullanımında fark edilir azalma ve üretimde enerji tasarrufu sağlayarak, verimliliği büyük ölçüde arttırmıştır [16]. Benzer bir diğer çalışma ise Hertenstein, Platt ve Veryzer'in [17] 4 ayrı endüstriye yönelik 12 farklı firma performans faktörünün irdelendiği çalışmadır. Bu araştırmaya göre, dört sektörde de tasarımın niteliği arttıkça, firmanın verimliliği artmaktadır. ...
... Bu araştırmaya göre, dört sektörde de tasarımın niteliği arttıkça, firmanın verimliliği artmaktadır. Tasarım, verimlilik ve firma performansı ile pozitif bir ilişki içindedir [17]. ...
... Tasarım faktörünün satışları arttırdığını gösteren veriler mevcut olmakla beraber, satışların artması, işletmenin finansal performansını etkileyen bir unsurdur fakat tek başına kârlılığı arttıran bir unsur değildir. Kârlılığın artması için işletmenin satışlarının, işletmenin giderlerine göre daha yüksek olması gerekmektedir [17]. ...
zet Küresel rekabetin hızla arttığı günümüz koşullarında müşteri beklenti ve taleplerini karşılamanın yolu işletmelerin etkin bir tasarım stratejisi oluşturmasından geçmek-tedir. Bu bağlamda endüstri ürünleri tasarımı, işletmelerin rakiplerine karşı rekabet üstünlüğü elde etmesinde stratejik bir öneme sahiptir. Konu ile ilgili olarak yapılan bilimsel çalışmalarda işletme verileri ve rekabet edebilirlik arasındaki ilişkinin ta-sarım aracılığıyla gerçekleştiğine dikkat çekilmektedir. Bu kapsamda yapılan çalış-mada tasarımın mobilya, otomotiv ana/yan sanayi, endüstriyel makine sanayinde faaliyet gösteren firmaların işletme verileri ve rekabet edebilirlikteki rolünün ista-tistiksel analizi yapılmış ve elde edilen bulgular değerlendirilmiştir. Çalışmada elde edilen veriler doğrultusunda endüstriyel tasarımın öneminin işletmelerde genel ola-rak anlaşılır olduğu fakat tasarım yönetimi kabiliyetinin yetersiz olduğu sonucuna varılmıştır.
... Scholars have argued that human-centered design contributes positively to innovation in new product development (Dorst, 2011;Veryzer and de Mozota, 2005). D Design contributes to product differentiation by enhancing product quality and customer experience (Hertenstein et al., 2005), and it also increases its value (Moultrie et al., 2007). Existing research has shown a positive relationship between corporate performance (Moultrie et al., 2007) and design and sales growth (Hertenstein et al., 2005). ...
... D Design contributes to product differentiation by enhancing product quality and customer experience (Hertenstein et al., 2005), and it also increases its value (Moultrie et al., 2007). Existing research has shown a positive relationship between corporate performance (Moultrie et al., 2007) and design and sales growth (Hertenstein et al., 2005). ...
... For example, a large-scale organization may develop innovative functions based on a productive resource base. On the contrary, smaller organizations can be more innovative because of their flexibility (Henderson and Cockburn, 1994;Cohen, 1995). The same applies to the company's history from its founding year to the present. ...
More companies are using design to gain an advantage in today’s highly competitive business market. However, there are few empirical studies on its innovation impact on organizational performance. The purpose of this study is to clarify the relationship between the knowledge resources of companies, moderated by the degree of design activities, and innovation types. Based on the sensemaking organizational model, this study examines how companies’ knowledge resources mediate design activities and influence innovation. This study introduces design activities as a moderator to link the corporate knowledge resources’ (human, social, and organizational knowledge) impact to incremental and radical innovation. The sensemaking organizational model is extended through a human-centered lens. Analysis of 151 companies showed that human, social, and organizational knowledge had a selective impact on incremental and radical innovation. Interestingly, the findings supported the hypothesis that organizational knowledge enhances radical innovation through design activities. This paper bridges the gap between corporate knowledge resources and innovation moderated by design activities enhancing the sensemaking organizational model. It points to the need for design activities for creative problem-setting and enabling the discovery of problems found during the research phase through innovation. Long-term corporate activities increase knowledge resources and reduce the potential for radical innovation. Mechanisms that promote new connections between organizations and leverage corporate knowledge resources benefit radical innovation. This explains the managemental impact on the various knowledge resources in innovation and the role of design activities.
... Firms are increasingly investing in design innovation because of its potential to contribute to a firm's sustainable competitive advantage (Simoni, Cautela, and Zurlo, 2014;Hertenstein, Platt, and Veryzer, 2005;Verganti, 2006Verganti, , 2011bGemser and Leenders, 2001). Traditionally, R&D has been seen as the primary value driver among upstream activities of the value chain with the most potential to create value (Mudambi, 2008). ...
... Several studies show that consumers pay attention to the visual aesthetic value of a product or service and make brand decisions based on it. The industrial design of products plays, therefore, an important role in the marketplace (Chiva and Alegre, 2009;Hertenstein, Platt, and Veryzer, 2005;Verganti, 2003). In order to turn innovations into commercial successes, firms need to 'cross the chasm' that separates technology enthusiasts and early adopters from the majority of consumers (Moore, 1991). ...
... However, research on design innovation, both theoretical and empirical, is remarkably scarce (Chiva and Alegre, 2009;D'Ippolito, 2014;Hertenstein, Platt, and Veryzer, 2005;Verganti, 2011b;D'Ippolito, 2014). De Goey, Hilletofth, and Eriksson (2019) reviewed journal papers and book chapters concerning design innovation from 1982 to 2015, and in their literature pool of 57 papers, only 11 were in the field of management and innovation management. ...
We analyse the international dispersion of inventor networks engaged in design innovation, by studying a dataset of design patents linked to Norway. Specifically, we examine the extent to which the international dispersion of design innovation is sustained by firms´ organisation-based pipelines, innovation capabilities and star designers’ personal linkages. We find that, in traditional design sectors, greater orchestration and innovative capabilities help firms source knowledge globally, while star designers tend to work independently or collaborate locally. Design innovation activities in high-tech sectors show higher international connectedness, largely driven by star designers’ personal connections. Surprisingly, firms with lower innovative capability tend to be connected to inventor networks that are more internationally dispersed. While increasing attention is being given to the value added by design, little is known about international design innovation networks. Our paper opens potential avenues for research on the distribution and orchestration of design innovation across borders.
... Other than that, it has been discussed in previous studies the importance of industrial design in an organization where a study by Hertenstein et al. [20] explained that industrial design is considered as one of the many other critical main areas to new product development together with marketing, purchasing, manufacturing, research and development and others. The study added that new product development contributed by the industrial design through improving the involvement of a product with its customers such as appearance, function and ease of use. ...
... It has been discussed in previous study the importance of industrial design in an organisation where a study by Hertenstein et al. [20] explains that industrial design is considered as one of the many other critical key areas to new product development along with research and development (R&D), manufacturing, purchasing, marketing and others. The study added that industrial design contributes to new product development by improving the involvement of a product with its customers such as appearance, function and ease of use. ...
... However, the measurement, sampling or variable of the previous studies are mostly not suitable as the condition of the scope of this study is different in cultural anthropology and ethnography. A study by Hertenstein et al. [20] mentioned that there are limited researches that tried to measure the influence of good industrial design to improve company performance, but the results were mainly based on anecdotal evidence with perception that good industrial design is profitable. Further findings found that a study by Gemser and Leenders [19] conducted a research investigating how the performance of companies affected by industrial design. ...
Industrial design has long existed in Malaysia from the making of traditional furniture to hand made craft using materials from wood, metal or fabric. Over the time, the influence of industrial design in Malaysia has slowly disappeared in the industry because some of the considerations or perceptions of whether it is able to provide returns to its designers and the perception of some people who are unaware or lack the understanding of its importance and value. Previous studies have shown that there are managers in companies who have problem in understanding whether industrial design has value to the company although there have been many researches that attempted to quantify the contribution of industrial design to improve company performance. This study chooses the Balanced Scorecard framework to explore the industrial design’s value because in order to assess how organisations manage and deliver the value to the stakeholders and customers, the organisation should be evaluated by measuring the performance. based on financial and non-financial performance measures for new product development, this study uses measures such as customer orientation, employees’ orientation, competitiveness orientation and strategic partners’ orientation for non-financial performance and growth, profitability, liquidity, efficiency and revenue for the financial performance.
... Moreover, a well working internal NPD process significantly reduces the time-to-market (Wind and Mahajan, 1997), which directly increases revenues and thus enhances financial success (Ramaswami et al., 2009). These findings are in line with studies by Gemser and Leenders (2001) as well as Hertenstein et al. (2005), which found that industrial design as a major part of the company-internal NPD process has a positive effect on the financial success of firms. Yet, prior studies also suggest that the effect of NPD process efficacy on financial success is more complex than a pure direct relationship and rather characterised by a transformative process in which the effect is delivered by important mediators. ...
... More specifically and in contrast to many existing studies (e.g., Gemser and Leenders, 2001;Hertenstein et al., 2005) we could not confirm a significant direct effect of NPD process on financial success. This result is in accordance with studies by Ramaswami et al. (2009) as well as Wolff and Pett (2006) which also did not find empirical evidence for the link between NPD process efficacy and financial success. ...
... From a theoretical point of view, a general "snapshot" of the dynamic phenomenon of IMCC that evolves through multiple stages has been made at a single point in time due to time as well as cost restrictions leaving room for more dynamic research, for example, a longitudinal study, in the future. From a statistical point of view, implementing longitudinal data could also rule out any concern about reverse causality, even if the causal chain proposed in our model is well grounded in prior literature (Gatignon and Xuereb, 1997;Gemser and Leender, 2001;Hertenstein et al., 2005). While we employed several procedural and statistical remedies to demonstrate the robustness of the results and that potential problems revolving around common method bias are limited, longitudinal data in future studies would also help in this respect and further substantiate our findings by replication. ...
Cross-functional intra-firm cooperation is crucial for a firm’s new product development (NPD) process and innovation success. Nevertheless, neither current innovation nor management control literature does provide empirical evidence on whether and how the cooperation between innovation and management control departments affects outcomes of the NPD process. Thus, this paper intends to close this research gap by studying the effect of innovation-management control cooperation (IMCC) across multiple NPD process stages on NPD process effectiveness and its consequences for a firm’s innovation and financial success. A multiple-informant data set was collected including 109 dyadic data sets from employees at project and top management level and combined with secondary data assessing financial success. The results show that IMCC exerts a positive effect on NPD process effectiveness. More specifically, the effect can be best described as u-shaped, being strongest in the concept development and implementation stage, but weaker in the product development stage of the NPD process. Furthermore, our findings show that innovation success mediates the relationship between NPD process effectiveness and financial success thereby explaining the contradictory findings of past research concerning the link between NPD and financial success.
... Indeed, a recent study by McKinsey suggests that more than 66% of CEOs "…don't fully understand what their senior designers do" (McKinsey Design Index 2018). Accordingly, the purpose of this article is to extend the observation (attributed to IBM president Tom Watson) that "good design is good business" (from Hertenstein, Platt, and Veryzer 2005) by drawing attention to the oddly overlooked relationship between strategic design management and the most important driver of firm competitiveness and nancial performance: Pricing power. Pricing power is defined as "...the ability to increase or maintain prices without losing demand" (Liozu 2019), which appears to be a decent depiction of design's role in organizational strategy. ...
... More specifically, this paper provides context to the common view in research that the mere ownership of design -based resources and capabilities within an organization leads to higher performance (Hertenstein, Platt, and Veryzer 2005;Erichsen and Christensen 2013). What has been missing in most discussions is a clear description of how design leads to performance-What concrete mechanisms explain the broadly-observed phenomenon (e.g., Verganti 2003) that "designdriven" rms tend to outcompete their rivals? ...
The belief that strategic design leads to improved firm competitiveness is broadly recognised in contemporary research. However, much less is understood about the precise , concrete mechanisms by which organizations translate their design-based resources and capabilities into higher performance. This paper provides context to this relationship by introducing the variable of pricing power as a potential element of unobserved "dark matter" that clarifies how design-based differentiation results in product performance. Pricing power is described by Stephan Liozu (2019) as "the ability to increase prices without losing demand". Remarkably, nowhere in the vast literature on pricing is design mentioned, while in parallel pricing has not appeared to be of particular interest to strategic design researchers. In an effort to spur further interest in this variable a case study is provided, illustrating the process footwear and apparel brand Nike employed to leverage design-based differentiation to support the pricing power of a new offering.
... This in turn improves intradepartmental coordination, knowledge sharing and technology transfer, as well as the reconfiguration of external relationships (Borja de Mozota, 2002). However, the strategic role and value creation potential of design are not always recognized (Hertenstein et al., 2005), meaning there is a need to quantify the contribution of each channel through which design contributes to business success. Auernhammer and Roth (2021) have taken a complementary approach to other design evolution theories. ...
... The innovation value of design arises from its power of differentiation through its influence on the perceived value, desirability and usability of a product (Noble & Kumar, 2010). This approach suggests that the integration of design in the business world necessarily involves good design management (Wolff & Amaral, 2016) and the ability to evaluate and quantify its contribution to the organization (Hertenstein et al., 2005). In one of earliest models of design-driven innovation management, Dickson et al. (1995) highlighted the importance of basic skills, special abilities, inclusiveness, organizational change and innovation skills. ...
Design is commonly understood as a key element of products, contributing to their distinctiveness, usability and aesthetics. The success of a product is increasingly related to the user experience or the aesthetics of the user interface, meaning that design is increasingly important in the digital environment. The shift in competitive focus to the customer induced by digital design encourages companies to innovate and can also lead to changes in internal operations, market orientation and the recon-figuration of external collaboration procedures. This dimension of digital design-induced effects has to date seen very little research. The objective of this study is to investigate how digital design-induced changes in market orientation, internal restructuring and external cooperation affect firms' competitive orientation. The simultaneous equation framework was applied to a survey of 515 user interface and experience designers from France. Our results suggest that market orientation is not the only channel through which digital design influences firm competitiveness. Digital design leads to organizational change and the reconfiguration of external relationships that directly and indirectly help companies build competitive advantages and increase customer satisfaction. K E Y W O R D S collaboration, competitiveness, digital design, market orientation, restructuring
... The insight that, "good design is good business" attributed to IBM President Tom Watson in a talk at Harvard Business School (from Hertenstein, Platt, and Veryzer, 2005) characterizes the broad acceptance that design has earned as a beneficial force for organizational strategy and performance. Accordingly, scholarly interest in design strategy has largely shifted to the concept of design management, defined as, "…the organizational and managerial practices and skills that allow a company to attain good, effective design" (Chiva and Alegre, 2009). ...
... rather than any single, individual product's performance (F-value = 8.829, p-value < .01). This finding aligns with NPD and business strategy literature that argues that contemporary consumers have come to expect product functionality and quality as prerequisites, and that truly successful products must not only perform well but also resonate with consumers in some additional symbolic or emotional way (Bloch, 1995;Hertenstein, Platt, and Veryzer, 2005). McBride (2007) points out that distinctive product offerings create "non-material value" (p. ...
Despite increasing attention from academics and practitioners Design Management lacks a widely-agreed upon empirical measure. This paper proposes a new conceptualization of Design Management based on the view of design as a “managed process” within organizations (Bruce and Bessant, 2002, p. 38). We employ an expert rating procedure of product design briefs and Exploratory Factor Analysis to derive eleven factors of information elements contained within these document that constitute Design Management: F1 Insights into Customers; F2 Business Model; F3 Product Aesthetics; F4 Authenticity; F5 Symbolic/ Experiential Value; F6 Functional Value; F7 Promotions/ Distribution; F8 Sustainability; F9 Production/ Development; F10 Project Management; F11 Risk/ Safety. Further, we clarify the strategic role of Design Management by relating these factors to measures of firm performance at the product project- and competitive advantage-levels. Our findings are rationalized using the Balanced Score Card for Design Management approach, made up of: (1) Customer Perspective; (2) Process perspective; (3) Learning and Innovation perspective; and (4) Financial perspective. Our results confirm the overwhelmingly positive relationship between Design Management and firm performance and highlights the differential effects of individual factors across the two measures.
... The insight that, "good design is good business" attributed to IBM President Tom Watson in a talk at Harvard Business School (from Hertenstein, Platt, and Veryzer, 2005) characterizes the broad acceptance that design has earned as a beneficial force for organizational strategy and performance. Accordingly, scholarly interest in design strategy has largely shifted to the concept of design management, defined as, "…the organizational and managerial practices and skills that allow a company to attain good, effective design" (Chiva and Alegre, 2009). ...
... rather than any single, individual product's performance (F-value = 8.829, p-value < .01). This finding aligns with NPD and business strategy literature that argues that contemporary consumers have come to expect product functionality and quality as prerequisites, and that truly successful products must not only perform well but also resonate with consumers in some additional symbolic or emotional way (Bloch, 1995;Hertenstein, Platt, and Veryzer, 2005). McBride (2007) points out that distinctive product offerings create "non-material value" (p. ...
Despite increasing attention from academics and practitioners design management lacks a widely-agreed upon conceptual measure. The 'Designence' Model proposed by Borja de Mozota (2006) offers an appealing approach to framing the strategic value of design by using the well-recognized Balanced Score Card framework to present a multi-faceted view of design management made up of four holistic perspectives: Customer Value Perspective, Process Value Perspective, Organizational Learning Perspective, and Financial Value Perspective. Our study hopes to spur increased interest in the framework by presenting a replication of the underlying "information-based invisible assets" that make up the 'Designence' Model with data derived from content analysis of product design briefs. Exploratory Factor Analysis confirms that the information elements contained within these documents closely aligns with the strategic design value variables identified in the 'Designence' Model. Further, we extend the framework by empirically describing the relationships between the four perspectives of the Model and two measures of firm performance suggested, but not tested, in the original study; individual project-level performance and overall firm competitive advantage.
... Current literature concludes two views assess companies' design utilization performance (Candi & Gemser, 2010). One line of studies considers design as an activity, which refers to a range of activities in NPD to create products to be launched in markets (e.g., Candi, 2010;Candi & Saemundsson, 2011;Chiva & Alregre, 2007;Gemser & Leenders, 2001;Hertenstein et al., 2005). Following this view, in which design is viewed as activities along the NPD process, design utilization is mainly assessed by the efforts that companies' investments in design-related activities (design emphasis) and companies' abilities in conducting design-related activities (design capability). ...
... In line with this outcome view, design utilization performance can be assessed through measuring the quality of design outcomes. Different indicators exist in the literature to assess the quality of design outcomes (Candi & Gemser, 2010), such as financial performance (Candi, 2010), consumer evaluations (Goodrich, 1994), and peers' or experts' opinions (Hertenstein et al., 2005;Platt et al., 2001). Financial performance is considered the most objective indicator, especially audited financial data (Henard & Szymanski, 2001). ...
Learning from developments in other countries, Chinese firms heavily invest in design to develop products with differentiated advantages
to upgrade their value chains. This research investigates Chinese firms’ design utilization performance by analyzing award-winning
products in the past decade. Specifically, we first investigate on what level leading Chinese companies utilized design. Through a content
analysis based on the jury’s comments on each award-winning product, results show that Chinese companies mainly utilized the functional
and styling roles of design. Next, we further investigate the competitiveness of Chinese firms’ utilization of design in Chinese markets and
non-Chinese markets. The comparison of consumers’ evaluations of selected award-winning products was conducted between products
from leading Chinese brands and international brands. Results showed that in Chinese markets, consumers evaluated products from
Chinese brands more positively than the international ones on all four dimensions (i.e., aesthetics, usage, meaning, and typological). In
non-Chinese markets, represented by Dutch markets, western consumers evaluated international brands more positively than Chinese
brands overall as well as on the dimension of meaning. Taken together, this research indicates that leading Chinese firms mainly utilize
the styling and function roles of design. In terms of competitiveness of design utilization, Chinese firms are competitive on products’
aesthetics and usage, both at the national and international levels. They, however, lack the ability to leverage design at the international
level through generating new meanings.
... Scholars also found that good industrial design is related to corporate performance and stock market performance (Hertenstein et al., 2005) and that rebranding could impact firm value depending on competitive market intensity (Zhao et al., 2018). Still, articles discussed that logo descriptiveness positively impacts brand equity, with an attenuated effect for familiar brands (Luffarelli et al., 2019) and hotel's physical facilities positively affect brand equity (Liu et al., 2020). ...
... After discussing each brand element separately, we will explore papers that discuss Visual Brand Identity (VBI) as a whole. The interest in aesthetics in marketing evolved from an early utilitarian outlook to a blend of functional, psychological (behaviour), and aesthetics elements (Levy & Czepiel, 1999), influencing packaging, advertising, industrial design (Hertenstein et al., 2005), and corporate identity (Schmitt et al., 1995). Apart from that, visual elements are being used by advertising as rhetorical figures (especially metaphors), showing that all elements that are part of the ad can be linked together and have a positive impact on consumers (Phillips & McQuarrie, 2004). ...
This master’s thesis presents a new brand identity model for consumer goods called Brand Identity Canvas (BIC), with the objective of helping academics and practitioners build more relevant and stronger brands. Our work updates the current and most influential brand identity models theorised mainly in the 1990s, including components and discussing interactions not previously addressed by scholars. We adopted the Design Science Research methodology, which is adequate for building artefacts and theoretical frameworks. The framework development was based on a literature review and 11 in-depth interviews with practitioners (marketing managers and directors) and academics (marketing and branding professors). The new model has two parts: the first is managerial, with a description of the intrinsic characteristics of the brand and its influences; the second is expressive, with a mood board that explores the brand’s visual aspects. The BIC presents academics and practitioners with an updated framework for defining and developing a brand identity for consumer goods, with dimensions, components, and relations representing an advance on the existing models.
... T he insight that "Good design is good business" attributed to IBM President Tom Watson in a talk at Harvard Business School (from Hertenstein et al., 2005) has spurred increasing academic and practitioner attention towards the ways organizations can employ design as a "managed process" within firms (Bruce and Bessant, 2002, p. 38). Increasing scholarly interest has been directed toward helping organizations develop and manage the right processes, resources, capabilities, activities, skills, priorities, and corporate structures that lead to "good design" in their offerings. ...
... Secondly, F5 Symbolic/Experiential Value (e.g. "Prestige", "Status", "Luxury", "Comfort", "Sensory Appeal" information elements) aligns with findings in NPD and business strategy literature that suggests that contemporary consumers have come to expect product functionality and quality as prerequisites and that truly successful products must not only perform well but also resonate with consumers in some emotional way (Hertenstein et al., 2005). McBride (2007) connects Design Management to this drive toward distinctive product offerings through the creation of "non-material value" (p. ...
Despite the increasing attention Design Management has received from academics and practitioners a definitive conceptualization or a widely-agreed upon empirical measure of the construct does not yet exist. This paper proposes a new measurement of Design Management based on the informational elements captured in product design briefs. Exploratory Factor Analysis results suggest that Design Management is made up of eleven clusters: F1 Customer Insights; F2 Business Model; F3 Aesthetics; F4 Authenticity; F5 Symbolic/Experiential Value; F6 Functional Value; F7 Promotions/Distribution; F8 Sustainability; F9 Production/Development; F10 Project Management; F11 Risk/Safety. Our analysis describes how these factors show differing effects on measures of firm performance at the product project- and competitive advantage-levels (for example, F1, F3, and F9 are strongly and significantly positively related to both sets of measures while F4, F5, and F8 are more important to the competitive advantage of a firm than to any individual product offering). Our findings are organized and discussed using the Balanced Score Card for Design Management tool made up of (1) Customer Perspective (Design as differentiator); (2) Process perspective (Design as coordinator); (3) Learning and Innovation perspective (Design as transformer); and (4) Financial perspective (Design as good business).
... This point suggests a price where consumers are likely to appraise an offering as neither overpriced nor underpriced 5 The use of the PSM methodology as an indirect, holistic measure of Willingness to Pay is appealing for the specific purposes of this exploratory study considering the widely observed parallel problems in extant research assessing the effectiveness of design (Gemser and Leenders, 2001). As noted by Hertenstein, Platt, and Veryzer (2005), ''[w]hile there are well understood ways to calculate a firm's return on investment or ROI, there has not yet been developed a way to calculate a firm's return on design or 'ROD'" (p. 11). ...
... Design is also considered an important source of innovation in any business activity (Perks et al.et al. 2005). Moreover, the design component generates a design-business symbiosis that translates into a positive correlation between the introduction of design and business results (Roy 1994;Hertenstein et al. 2001Hertenstein et al. , 2005. In line with this, Gemser and Leenders (2001) show that industrial design positively impacts profits, sales, and exports. ...
Companies must provide economic, environmental and social added value based on innovation strategies, design and creative thinking in a globalised and competitive world characterised by rapid change and constantly evolving technologies. In this context, this paper analyses the role of design practice in companies in the agri-food sector (i.e. what is the design component present like; what are its relevance and importance?) An exploratory, descriptive study was conducted with 30 companies in southeast (SE) Spain's fruit/vegetable sector. The findings reveal that all the surveyed companies make financial investments in design and positively value this (7.6 out of 10), which indicates they recognise its strategic and operative importance. However, integration, training and design promotion in the agri-food sector remains somewhat limited. Most companies lack an in-house design department or design professionals as staff members and perform mainly design activities limited to the visual and communication tasks related to marketing initiatives. These results unveil opportunities for enhancing design incorporation and appreciation in the agri-food sector, which could boost its competitiveness and differentiation in the market. Finally, this study can be considered a starting point for future development in line with the horticultural sector's theory, practice, and design management policies.
... It can articulate an entity's history and reputation and can also be a pillar of branding strategy (Schroeder and Salzer-Morling 2006). It can add lustre to company performance/profitability (Gemser et al. 2001;Hertenstein et al. 2005;Micheli et al. 2012;Olins 1978;Beverland 2005); burnish brand equity (Stamatogiannakis et al. 2015); improve staff morale and standards of work and make an organisation's environments agreeable (Olins 1978); enhance public recognition and shape corporate brand image and reputation (Foroudi et al. 2014;Landwehr et al. 2012;Olins 1978;Tourky et al. 2020); facilitate brand evaluation (Brunner et al. 2016); foster brand engagement (Kirby and Kent 2010); and promote brand attractiveness (Brunner et al. 2016). It can have a sensory effect (Krishna et al. 2017), and can be more significant than pricing (Gilal et al. 2018). ...
Scrutinizes design, corporate brand design, and corporate heritage brand design, with the latter
constituting the substantive focus of this article. While design is a multifaceted notion, it is
intrinsic to branding, brand management, and brand recognition. Particularises that corporate
brand design is bipartite in character and encompasses corporate brand visual design and
corporate brand structure design. Elucidates the importance, dimensions, and nature of
corporate heritage brand design. Proposes that corporate heritage brand design authenticity is
dependent on there being an enduring brand marque/name and a prevailing corporate brand
promise, and that key corporate heritage design criteria relating to omni-temporality,
institutional trait constancy, tri-generational heredity, and augmented role identity are met. The
arrogated design heritage notion is explicated. This characterizes the appropriation of a design
heritage of another entity, with which it is associated by virtue of its augmented role identity.
Explains the breadth and significance of key corporate heritage design dimensions. Observes
that discarding a much-loved corporate heritage brand design can be problematic and
contentious. Importantly, custodianship of a corporate heritage brand design inheritance is a
management imperative, but one which is frequently overlooked.
... The importance of industrial design in a business has been acknowledged in global studies' curricula. However, methods for measuring the relationship between the roles of design in the performance of a business are limited, as mentioned by Gemser and Leenders (2001), Hertenstein et al. (2005), and Ravasi and Stigliani (2012). ...
... First, the evidence comes from numerous companies in thirteen countries in three industry sectors, which allows the generalization of¯ndings and the discussion of general patterns in NPD practices [Wong and Ngai (2019)]. The focus is on the design stage of new products which is key for¯rm competitiveness in the marketplace [Hertenstein et al. (2005)] because it allows¯rms to qualitatively di®erentiate their products from those of rival¯rms [Gemser and Leender (2001)]. Second, by applying supermodularity techniques [Mohnen and R€ oller (2005)], this paper identi¯es whether the adoption of ...
This study analyses the effects of different integrative strategies related to supply chain (SC) actors (suppliers, customers and internal manufacturing) in the early stages of new product development (NPD) on NPD success. Relying on various theories and related empirical evidence, we state three hypotheses and empirically test them using multi-country and multi-industry data from 309 manufacturing plants. The results show that different strategies of involvement explain different NPD success. We observed that integrative practices involving three distant actors have a positive impact on all NPD success indicators. We also observed that NPD success related to specific purposes, for example, market or internal processes, can be obtained with simpler combinations of collaboration. This shows the significance of choosing a differentiated portfolio of SC partners based on cognitive distance to achieve success in different NPD performance measures. Our results confirm that the types of partners are determinants in achieving different NPD success and that there are different alternatives to achieve success. These results have implications for managers to optimise the allocation of limited resources when cooperating with different agents in NPD projects.
... There are various motivations to recommend firm plan ability emphatically affects item interest and, thus, firm deals, no matter what the company's innovative climate (Chitturi et al., 2007;Landwehr et al., 2011;Homburg et al., 2015;Jindal et al., 2016;Liu et al., 2017). To start with, successful plans evoke an assortment of full of feelings and stylish reactions (Crilly et al., 2004;Hertenstein et al., 2005;Rindova and Petkova, 2007), prompting good shopper practices, including further item examination and item buying (Crilly et al., 2004;Creusen and Schoormans, 2005;Chitturi et al., 2007;Talke et al., 2009). These impacts accelerate reception interaction and increment deals (Norman and Verganti, 2014). ...
Purpose
Firms use design capability across the globe to compete and increase sales, e.g. Apple. However, the payoff from design know-how has been overlooked thus far. Academic research lags in this space despite the intersection of sales, technology and design in practice. This paper provides researchers and managers with implications of the interplay between design capability and technological market conditions to enhance a firm's sales.
Design/methodology/approach
Firms' capability design, and sales impact have been studied in this paper across different technological market conditions. Primary technological conditions of the industry under which firms operate are captured, which are technological intensity (TI), technological competitive intensity (TCI) and technological maturity (TM). Their interplay has been studied using panel data analysis, examining fixed and random effects.
Findings
Design is an important, interesting and non-imitable capacity that yields positive firm execution results. It provides an urgent differentiator and improves deal development. This study found that all four hypotheses are generally supported. The main finding is that, provided underlying technology is good, design significantly improves sales, but design alone cannot substitute for poor technology.
Practical implications
The results of this study link the three technological environment conditions, namely, TI, TCI and TM with sales growth. The authors find that design can and does add to superior performance, provided technological excellence exists prior. But, in the absence of good technology, design alone will hinder performance.
Originality/value
This paper examines the effect of firm design capability on sales growth. The paper finds a positive moderating effect of TCI and TM but a negative moderating effect of TI. The researchers believe these aspects of the design have not been studied before.
... For instance, Apple's iMac is viewed as an aesthetic revolution in computing, indicating that computers' aesthetics plays a vital role in consumer purchase decisions (Postrel, 2001). Consequently, it is strategically important for manufacturers to convey consumers' specific emotions to the new products, referred to as emotional product development or emotional design, because positive emotions lead to higher market sales (Hertenstein et al., 2005). Consumer online reviews often express direct, real-time, and honest emotional perceptions concerning consumers' experiences of products/services (Liu, 2015). ...
Conveying consumers’ specific emotions in new products, referred to as emotional product development or emotional design, is strategically crucial for manufacturers. Given that sentiment analysis (SA) can extract and analyze people’s opinions, sentiments, attitudes, and perceptions regarding different products/services, SA-based emotional design may provide manufacturers with real-time, direct, and rapid decision support. Despite its considerable advancements and numerous survey and review articles, SA is seldom considered in emotional design. This study is among the first efforts to conduct a thorough review of SA from the view of emotional design. The comprehensive review of aspect-level SA reveals the following: 1) All studies focus on extracting product features by mixing technical product features and consumers’ emotional perceptions. Consequently, such studies cannot capture the relationships between technical and emotional attributes and thus cannot convey specific emotions to the new products. 2) Most studies use the English language in SA, but other languages have recently received more interest in SA. Furthermore, after conceptualizing emotion as Kansei and introducing emotional product development and Kansei Engineering, a review of the data-driven emotional design is then conducted. A few efforts start to study emotional design with the help of SA. However, these studies only focus on either analyzing consumers’ preferences on product features or extracting emotional opinions from online reviews, thus cannot realize data-driven emotional product development. Finally, some research opportunities are provided. This study opens a broad door to aspect-level SA and its integration with emotional product development.
... These are the overall process of concept generation, product, strategy, organization, and marketing project design, implementation, and evaluation of a new product to illustrate the role of design in the product expansion process (Belliveau et al., 2004). Furthermore, provide substantial proof that good design can be related to organizational performance (Hertenstein et al., 2005). Efficient and effective designs may lean market share or create new market segments. ...
This study explores the contribution of lean practices in a manufacturing firm in Karachi towards sustainable performance while considering organizational culture as a moderator. Lean approaches benefit firms' social, environmental, and financial aspects, influencing their endurable performance. Manufacturing firms nowadays globally are focused on lean implementation. A structured questionnaire was distributed among employees of the Small and Medium Enterprises in Karachi that fit in the category and belonged to the manufacturing enterprises. A sample of 200 respondents was analyzed using the partial least squares technique (PLS-SEM). The results indicate that Human resource practices, Supplier relationships, and organizational culture significantly affect sustainable performance; furthermore, organizational culture moderated the supplier relationships' impact on sustainable performance. Thesis outcomes contribute to the analysis of the study, broadening the writings on lean manufacturing and sustainable performance with a Moderation of Organizational Culture. The finding of the thesis possibly will be used as a motivation for firms in Karachi to implement Lean approaches as companies that adopt Lean practices globally have the result of improving firms' endurable performance through lean manufacturing approaches. Citation of this article: Wahab, A. (2022). Lean manufacturing and sustainable performance with the moderation of organizational culture. South
... These are the overall process of concept generation, product, strategy, organization, and marketing project design, implementation, and evaluation of a new product to illustrate the role of design in the product expansion process (Belliveau et al., 2004). Furthermore, provide substantial proof that good design can be related to organizational performance (Hertenstein et al., 2005). Efficient and effective designs may lean market share or create new market segments. ...
This study explores the contribution of lean practices in a manufacturing firm in Karachi towards sustainable performance while considering organizational culture as a moderator. Lean approaches benefit firms' social, environmental, and financial aspects, influencing their endurable performance. Manufacturing firms nowadays globally are focused on lean implementation. A structured questionnaire was distributed among employees of the Small and Medium Enterprises in Karachi that fit in the category and belonged to the manufacturing enterprises. A sample of 200 respondents was analyzed using the partial least squares technique (PLS-SEM). The results indicate that Human resource practices, Supplier relationships, and organizational culture significantly affect sustainable performance; furthermore, organizational culture moderated the supplier relationships' impact on sustainable performance. Thesis outcomes contribute to the analysis of the study, broadening the writings on lean manufacturing and sustainable performance with a Moderation of Organizational Culture. The finding of the thesis possibly will be used as a motivation for firms in Karachi to implement Lean approaches as companies that adopt Lean practices globally have the result of improving firms' endurable performance through lean manufacturing approaches.
... Packaging holds a lot of functional benefits related to product protection and transport efficiency. Next to these practical benefits, consumers use packaging to evaluate products and brands, particularly in the case of fast-moving consumer goods (Hertenstein, Platt, & Veryzer, 2005;Orth & Malkewitz, 2008). A serious downside of packaging is that it is usually discarded directly after product use and unavoidably adds to our environmental footprint. ...
Plastics are a major element of the modern economy with countless applications in both the industrial and consumer area. They are a cheap, lightweight, durable and widely used material in many industries. Within the EU, plastics are mostly used as a packaging material (e.g. water bottles). Packaging represents approximately 40% of plastics production and 61% of all waste generated from plastics. Plastic packaging is also the type of packaging with the lowest recycling rate in the EU (42%) compared to other materials. The design of packaging is crucial for recyclability of plastic packaging. The article aims to show the strategy of selected companies to the circular economy as well as to identify new sustainable packaging introduced by these companies in the field of food, cosmetics and cleaning products. The methods of analysis and synthesis were applied to obtain theoretical backgrounds on this issue. Using these methods, we analysed information gained from domestic and foreign scientific sources, European legislation and websites of companies. We can conclude that using sustainable packaging is an opportunity to gain a competitive advantage between companies, as consumers begin to notice non-ecological behaviour among producers and prefer products' packaging that cares for our planet.
... The peer tutors periodically updated the progress of each team to the course instructor and gathered feedback. To shortlist the final concept, each team decided to vote based on the following parameters -1) Effectiveness, 2) Quantity, 3) Quality, and 4) Novelty [5] [6]. The final concept was further developed based on the inputs shared by the tutors and presented towards the end of the 5 th day. ...
Design education is based on interactive discussions between students and their facilitators. Deeper engaging interactions can generate a range of concepts in the initial design phase. However, from the student’s perspective, the discussions with the course facilitator may turn formal and pose a restriction on free-flowing ideas. Despite applying different student engaging methods, there still seems to be an invisible barrier that holds them back from freely expressing their design thoughts. The concept of Peer-Assisted Learning (PAL) was introduced in a design course in the Department of Design at the Indian Institute of Technology, Guwahati (DoD, IITG), to solve this issue. This paper discusses the observations and findings of the experimental study with PAL in an industrial design course for concept generation. Conceptual solutions were developed for different design problems as part of the design charrette planned within the course. The final year Masters in Design students mentored junior students from third-year Bachelors in Design in the design charrette under the course instructors’ guidance. This exercise helped the junior design students quickly open up with their mentors and share their ideas smoothly. The senior students acted as a catalyst in generating a range of possible outcomes in a short period. A survey conducted at the end of this course with the junior students showed that the students accepted PAL well and would like it to be part of other courses in the future. Therefore, this paper recommends introducing PAL in design education as it effectively develops professionalism in senior students and helps the junior students use their seniors’ experiences. Additionally, it imbibes a sense of community learning in the student group.
... [26] It has been believed that companies capable of expressing a certain connotation through the esthetics of a product design can establish a competitive edge in the market and boost the product's likelihood of success. [27][28][29] Moreover, Gallan identified vital factors such as the influence of colleagues, medical representatives, medicine samples, and direct-to-patient marketing behind the prescribing behavior of health care professionals. [30] Other researchers such as Hoyer and Stokburger-Sauer, Parvin and Chowdhury examined the influence of esthetic taste and different extrinsic aspects of non-pharmaceutical products on consumer behavior. ...
The prime objective of the study is to assess the purchasing behavior of pharmaceutical products among customers in Bangladesh and their response to the diverse range of intrinsic and extrinsic factors of the pharmaceutical products. Multi-item measures were utilized to collect information through a questionnaire-based survey to evaluate respondents' attitudes toward the distinctive characteristics of the pharmaceutical products. Among 410 participants, 266 respondents were assessed who purchase pharmaceutical products at least once monthly in last 1 year and answered all the questions properly. Shopkeepers' suggestions, product presentation, packaging material, product visibility, and packaging quality were singled out, which significantly impacted the purchasing behavior and brand evaluation. Significant gender differences were also observed in purchasing pharmaceutical products influenced by doctors' prescriptions (χ 2 = 10.278, P = 0.016) and evaluating brand based on bitterness of the taste (χ 2 = 6.792, P = 0.034). The association of the academic level of the customers was also observed in the most deciding factor in purchasing pharmaceutical products (χ 2 = 27.039, P = 0.000) and evaluation of the brand based on company image (χ 2 = 4.076, P =0.043), color of the liquid dosage form (χ 2 = 8.562, P = 0.014), taste difference (χ 2 = 11.346, P = 0.023), and bitterness of the liquid dosage form (χ 2 = 7.245, P = 0.027). Regardless of gender and education level, the majority preferred transparent, dual packaging and strips of solid dosage forms that are marked with the days of a week.
... BI represents the 'symbolic value' of a product or services, which is the image of the product, built either by virtue of its quality/functionality or through public impression regarding the same, or both (Saxena and Dhar, 2017;Taniyev and Gordon, 2019;Runyon and Stewart, 1987). The image is formed by the interaction of a customers' personal experience with the product and the reputation of the brand (Cheung et al., 2019;Gensch, 1978), and a positive image eventually results in customers' intending to purchase the product or service of that particular brand (Ansary and Hashim, 2018;Lewalski, 1988;Yamamoto and Lambert, 1994;Bloch, 1995;Lee and Lee, 2018;Hertenstein et al., 2005). PD is one of the tools that players in a highly competitive market use to set their products apart to improve their visibility and appeal (Hsiao and Chen, 2018;Chen et al., 2018;Bloch, 1995;Rassam, 1995). ...
This study investigated the impact of product-specific features of electronic gadgets on the purchase intention of the Indian youth. The study was quantitative in nature and data was collected from 650 young electronic gadget consumers in Bengaluru, India using structured questionnaires. Descriptive statistics and structural equation modeling (SEM) were used for data analysis. Brand image, product design, and country of origin are referred to as product evaluation attributes; and corporate identity was identified as the determinants of purchase intention. Respondents were neutral regarding the role of product evaluation attributes and corporate identity in their purchases but acknowledged these factors' importance. Findings implied a positive and significant influence of product evaluation attributes on the corporate identity of companies, and purchase intention of the youth. However, corporate identity did not influence purchase intention, clearly indicating that only product-specific features, such as brand, design, and country of origin are considered when youngsters purchase gadgets.
... In addition to the information provided, label design (front and back) is an important 'seller' of the product. In the same line, a significant body of research suggests that package design is extremely influential at the moment of decision-making (Hertenstein et al., 2005;Orth & Malkewitz, 2008;Rettie & Bruwer, 2000). In particular, package design can help in the creation of strong brands and distinguishing offerings. ...
Evaluation of wine quality before tasting requires more than simple access to information; it demands the knowledge and the experience to interpret the information provided. This paper intends to contribute to an in-depth understanding of the role that self-reported wine knowledge plays on individual attitudes and behavior towards choice and evaluation of wine. Five focus groups involving 45 regular red wine consumers were conducted in 4 Portuguese wine regions. Qualitative data were transcribed verbatim and content analysis was applied. Three main dimensions emerged, highlighting the importance of self-reported wine knowledge on the decision-making process: (1) conceptualization, (2) product adaptation to the market, and (3) promotion. Results suggest that for least knowledgeable participants, the consumption moment is very important, they consume occasionally, and they choose and evaluate wine quality based on brand, food pairing, alcohol content, and wine image. Inversely very knowledgeable participants consume wine often and choose and evaluate wine quality based on information such as region of origin, grape variety, and alcohol content. This study adds the effect of self-reported knowledge on wine choice to the related literature. A source triangulation combining qualitative and quantitative methods is applied.
... Design enhances consumers' purchase intention and willingness to pay and has a significant impact on the corporate brand image [10,11]. Additionally, investment in design contributes to profit and is highly valued in the stock market of design-focused companies [12]. When it comes to design, although the form tends to attract the most attention, the color-matching functions (CMFs) for color, material, and finishing should not be overlooked [13]. ...
Although a sizable body of research concerning innovation and intellectual property (IP) performance exists, there has been limited attention on whether the state of IP strengthens or curtails innovation activity in the global south, specifically among sub-Saharan Africa firms. This article analyzes the direct impacts of IP on innovation performance in sub-Saharan Africa, namely patents, copyrights, industrial designs, and trademarks. The paper responds to firms extracting value from intellectual property strategies through innovation activities and overall performance. Using the World Bank Enterprise Survey (WBES) and Innovation Follow-up Survey (IFS), we find that appropriation channels are essential for transforming innovation pursuits into a competitive advantage. Our results further reinforce that appropriation mechanisms are crucial to innovation and may allow firms to gain returns on their innovation activities. Regardless of the weaknesses and limitations of the patenting strategy in sub-Saharan Africa, the probability of patenting an innovation relates to a process and product innovation while controlling for several other effects. More importantly, we demonstrate how industrial designs and improved or changed trademarks can foster inclusive performance. In addition, we show that beyond perception-based innovations, intellectual property strategies also matter to innovation intensity and sales growth. Consequently, our results indicate that the significance of innovation for competitiveness puts intellectual capital at the critical juncture of knowledge management.
Aesthetics are critically important to market acceptance. In the automotive industry, an improved aesthetic design can boost sales by 30% or more. Firms invest heavily in designing and testing aesthetics. A single automotive “theme clinic” can cost more than $100,000, and hundreds are conducted annually. We propose a model to augment the commonly used aesthetic design process by predicting aesthetic scores and automatically generating innovative and appealing product designs. The model combines a probabilistic variational autoencoder (VAE) with adversarial components from generative adversarial networks (GAN) and a supervised learning component. We train and evaluate the model with data from an automotive partner—images of 203 SUVs evaluated by targeted consumers and 180,000 high-quality unrated images. Our model predicts well the appeal of new aesthetic designs—43.5% improvement relative to a uniform baseline and substantial improvement over conventional machine learning models and pretrained deep neural networks. New automotive designs are generated in a controllable manner for use by design teams. We empirically verify that automatically generated designs are (1) appealing to consumers and (2) resemble designs that were introduced to the market five years after our data were collected. We provide an additional proof-of-concept application using open-source images of dining room chairs.
History: Puneet Manchanda served as the senior editor.
Funding: A. Burnap received support from General Motors to partially fund a postdoctoral research position for the research conducted in this work. He certifies that none of the research or its results were censored or obfuscated in its publication. J. Hauser and A. Timoshenko certify that they have no affiliations with or involvement in any organization or entity with any financial interest or non-financial interest in the subject matter or materials discussed in this manuscript.
Supplemental Material: The data files are available at https://doi.org/10.1287/mksc.2022.1429 .
The role of design and innovation through NPD process can be a good platform for Malaysian SMEs to enhance their competitiveness. However, less study has been conducted to examine how the process has been implemented by SMEs. NPD process requires a proper planning and commitment from the company. Managing the NPD process by utilized design as a source of innovation will improve the quality of the product. But, many of the SMEs not utilize the potential of design and innovation as their sources to gain competitiveness. Therefore, there are gaps on how the process has been conducted by SMEs such as how they implementing, managing and who are the parties should be involved in the process. The objective of this paper is to explore the process of new product development conducted by small and medium manufacturing industries (SMEs) through design and innovation in creating added value to a product, based on an empirical study covering product, furniture, and automotive manufacturing industries in Malaysia. A mixed-method was applied consist of 450 respondents for questionnaire survey and 12 selected participants from different group’s namely industrial designers, marketers, and decision-makers. The results reveal the positive effects of managing design and innovations in the industries are important to improve product value and to enhance company performance through product development processes.
This aim of this study is to reveal the importance of design function, which has recently been seen as one of the most important elements needed to compete, through studies that prove its impact on the financial performance of firms and countries. In this context, customer preferences, which first have a direct impact on financial performance and are analyzed in many scientific studies, are read through the impact of design activity. Second and last, scientific studies that prove and pioneer the interaction between the economic indicators of firms and countries at the end of certain periods and design activity are evaluated. The study focused only on the impact of design on economic indicators, as studies on the impact of design on other non-financial competitive factors were not sufficient in quantity and quality at the end of extensive literature review and reading. As a result of the evaluations, it is understood.
INNOVATION AND INDUSTRIAL DESIGN IN THE NEW NORMAL PARADIGM
Abstract
This article is an attempt to investigate alternating innovation concept according to
contemporary business models in the light of The New Normal paradigm. In the
economy, cyclical changes causes the rise of new business models. Successful models
continue to live thought the changes in the new paradigm. New normal, as a
paradigmatic shift, has led to the emergence of new models. In this context, first, the
dynamics of The New Normal will be discussed; later, the compatibility of three
managerial models (Karaoke Capitalism, Funky Business and Spaghetti Organization)
related to New Normal will be determined. Thereinafter innovation, which is the most
important expression of New Normal, will be handled according to its floating nature.
The article continues with a discussion of the role of industrial design in innovation
models that are close to or enclosing consumers for the sake of product differentiation
(quality, functional features and design, promotion avaibility. During the study, the level
of design limits of firms will be supposed to access information channels and obtain
information can be determined by converting information to the product and demand
in the market is claimed as a source of information
The study aims to contribute to the literature by comprehensively discussing the importance of design methods to the company's competence in the commercial world and the importance of integrating design into the product development process in the early stages. The driver environment on today's boats is not ergonomically designed and this project aimed to design a new driver environment with improved ergonomics, user experience and aesthetically compelling for the market. The project was conducted with a user-centred design methodology, meaning that all team members were involved throughout the product development process to create design value for users with new solutions that meet their needs. The result is a new console, seating unit and hardtop design that takes into account the importance of ergonomics, user experience and manufacturability. These elements have not only integrated all the equipment in a user-friendly way, but also with easy maintenance and manufacturing options.
Since it emerged in the 1950s, the concept of design management has evolved from managing design projects or organisations to the core element of strategy. With design management capability, a corporation can deploy design resources adequately and flexibly. Although models of assessing design management capability and the possible relationship between it and design awareness have been studied sufficiently in previous research, the exact relationship has never been explicitly clarified and verified. Furthermore, design awareness is always associated with top managers or other non-design managers, while in most cases, design management capability is related to design leaders. Few studies have extended design awareness to design leaders or design management capability to top managers. To fill in this gap, a survey of design leaders and top managers in 200 established firms was conducted. This research contributes to design management theory in the four following respects: 1) identifying design awareness as an independent factor apart from design management capability, 2) confirming the moderator role of design awareness between design management capability and product innovation, 3) defining two independent systems of design awareness and design management capability of design leaders and top managers and 4) reporting no cross-valued awareness between design leaders and top managers in the current frame of design management capability.KeywordsDesign awarenessDesign management capabilityProduct innovationDesign leaderTop manager
LPG has been an essential part of every Filipino household because
of its application for cooking. For years to come, demand for LPG
in the Philippines, particularly in Luzon, is expected to continuously
increase. This study aimed to derive the influence of branding
to customer preference of Filipino LPG-user households by utilizing
conjoint analysis. The study considered a total of 7 attributes,
namely brand, price, free installation service, delivery time, tank
appearance, regulator type and weight. The study found that brand
was the most important factor for consumers. It was followed by
tank appearance, price, free installation service, regulator type,
delivery time, and weight. The results can help in developing marketing
plans for LPG retailers to improve their appeal to customers
and ultimately increase their market share.
The industrial design profession is on the verge of another manufacturing revolution commonly referred to as Industry 4.0. This paradigm shift will influence the way in which products are made, which subsequently, will influence the future industrial designer. Industrial design, which is evolving, is intrinsically linked to manufacturing; however, what is required of industrial design to adapt to these new changes to be brought on by Industry 4.0 in manufacturing is yet unknown. Current literature gives little insight into how industrial designers need to adapt and evolve to the current developments in manufacturing to remain value drivers in an Industry 4.0 paradigm. This provides an impactful research gap focusing on how the industrial design field must evolve to stay relevant and provide value for future manufacturing in this new evolving paradigm.
This thesis uses a mixed methods approach, beginning with a focus group for a pilot study to construct questions for a subsequent online questionnaire. This questionnaire was formulated using the existing literature on industrial design to establish the present state of industrial design practice globally and to identify areas for improvement, as well as opportunities for growth within the discipline. This approach helped define and communicate the capabilities and value of industrial design for future manufacturing industries.
Core values of industrial design were found to be stable, however these need to be communicated more effectively to production-based stakeholders to facilitate adequate collaboration. Furthermore, it was established that industrial designers lack technology literacy, and that early manufacturing engagement is critical for industrial designers to have a successful collaborative experience for new product development. Industrial designers must also embrace new technologies that correspond with their core strengths to successfully evolve alongside an Industry 4.0 manufacturing environment. The outcome of this thesis provides an empirical foundation for the future of industrial design in relation to its value to manufacturing, as well as expanding and adjusting the industrial design curriculum in universities to stay relevant in an Industry 4.0 manufacturing environment.
In addition to technological superiority (functional value), attention to design superiority (semantic value) is increasing as a source of competitiveness in product market. In this research, we have created linked data set of utility patent and design patent information of Japan Patent Office to evaluate the design patent data as a source of understanding design innovation. First, machine learning was performed on a classification model for disambiguating the same person of the inventor/creator using data of patent right and design right applied to the Japanese Patent Office. By interconnecting the inventor's and creator's identifiers estimated by the learned classification model, we identified the design creator who also made the patent invention. Next, an empirical analysis is conducted to characterize the design created by an inventor of utility patent. As a result, about half of design patents are found to be created by the same person who is involved by utility patent. However, the division of labor of designer (a creator of design patent) and engineer (inventor of utility patent) is in progress, particularly for a large firm.
Online retail sales have increased steadily over recent years, and the COVID-19 pandemic has further accelerated this growth. However, extensive packaging use in online retail harms the environment. Although eco-friendly packaging is gaining traction, it remains unclear which factors determine consumers' intentions to use that type of packaging. This study uses a goal-framing approach to examine consumers' motives for eco-friendly packaging adoption in online retail. We analyze data from 1,491 German consumers using structural equation modeling. The results reveal that gain and normative motives positively influence consumers’ choice of eco-friendly packaging, while hedonic motives seem to be of lesser importance. The findings contribute to a better theoretical understanding of sustainable consumer behavior as we identify the essential goal frames that determine the intention to use eco-friendly packaging in online retail. We provide recommendations for online retailers regarding the functional requirements that must be considered to meet consumer demands when introducing eco-friendly packaging.
The aim of this paper is to present a conceptualization of entrepreneurial marketing approaches that wineries can adopt in internationalization. Bringing together literature on marketing, entrepreneurship, internationalization, networks and serendipity, we argue that adopting an entrepreneurial marketing orientation (EMO) is appropriate for the wine industry and offer a set of propositions based on networks and serendipity literature to support an EMO and internationalization framework. EMO allows the wine industry to navigate the competitive and turbulent nature of the industry and overcome the challenges during the early stage of the internationalization journey. The paper offers a foundation to better understand the internationalization process of the wine sector and the benefits of EMO to wineries entering international markets.
O senso comum de que os direitos autorais fornecem proteção adequada para os designs é questionado neste trabalho, cujo objetivo é estabelecer uma comparação entre esta proteção e a de desenho industrial a fim de determinar a opção mais adequada para projetos de design. Foi utilizado o método dedutivo com técnicas de pesquisa bibliográfica e documental. A discussão contempla o papel do design enquanto ferramenta de diferenciação e agregação de valor que incrementa a competitividade, interferindo diretamente na performance das empresas. Os resultados evidenciam que a proteção por direitos autorais pode ser útil no âmbito de uma produção artística e artesanal, mas, no contexto de uma produção industrial, padronizada e escalonada, a proteção adequada é o registro de desenho industrial. Os resultados também evidenciam a necessidade de inserção da temática da proteção por desenho industrial desde as escolas de design.
This article examines the determinants of adoption of industrial designs, for intellectual property (IP) protection, in a large sample of US start-ups. While patents and copyrights are widely analysed as ways of protecting proprietary knowledge in large firms, they are expensive forms of IP protection, both to create and to protect. For start-ups, cheaper and simpler methods have greater attraction, of which industrial design protection is an example. The article builds and tests an applied econometric model of industrial design adoption, using the longitudinal Kauffman Firm Survey, 2008–2012. The model is based on a microeconomic managerial utility theory of the firm, implemented within a random utility framework, leading to an estimable econometric model which takes the form of a binary probit with random effects. This model is run on an unbalanced panel sample of nearly nine thousand observations. It finds that expenditure on R&D plays a powerful role in the design adoption process. Incorporation and owner-managers’ injection of equity also play a positive and significant part in design adoption. These three influences are all part of the commitment that owner-managers bring to their start-ups. Sales directed to products rather than services also have positive effects on industrial design adoption.
Purpose
The purpose of this study is to determine how design should be managed to develop truly innovative products and services. Three management levers were examined: design leadership, design inclusion and design thinking.
Design/methodology/approach
The study was carried out as a survey of innovation managers in the USA. The survey measures were developed from the design and innovation literature. Over 300 managers participated in the survey, and their responses were analyzed by using multiple regressions and other statistical tools.
Findings
All three aspects of design that were studied – leadership, team inclusion and thinking – were found to significantly and positively impact new product and service innovativeness. Of these factors, the most important contributor to innovativeness was design thinking, with having more than three times the impact of the other two. Also, firms that are large, publicly held and technology-intensive are on average more innovative.
Practical implications
To increase the innovativeness – or novelty, interest in and influential – of new products and services, managers should appoint designers as leaders on innovation project, include designers in development teams and above all integrate the design thinking process in organizations.
Originality/value
This study determines that design leadership, inclusion and thinking increases the innovativeness of new products and services.
Results are presented of an extensive and objective benchmarking study to determine the critical success factors which drive new product success and to gauge how companies perform on these factors. 'Best practices' which help to drive success are also identified. The study is designed to overcome some of the traditional problems associated with benchmarking. A rather large sample study of 135 firms is considered. Rigorous research methods in the form of data collection and analysis are used to ensure validity of results. Relationships between practices and performance are explored, i.e. the impact that each practice or characteristic has on performance.
In this research, the authors seek to advance the understanding of how marketing can facilitate the new product design process. They focus on how designers' use of a specific cognitive process, visual mental imagery, can influence the customer appeal of a design. The authors present a conceptual framework for examining how visual imagery might influence the customer appeal of a design output. This is followed by two experiments that test the hypotheses that flow from the proposed model. The experiments manipulate the type of visual imagery used and the incorporation of the customer in the imagery invoked and then examine its effects on the usefulness, originality, and customer appeal of the resulting design. Consistent with the framework and the proposed hypotheses, the findings show that including the customer in imagination visual imagery during the design process has a greater effect on the usefulness of the design produced than including the customer in memory visual imagery. The results also show that imagery based on imagination results in more original designs than imagery based on memory. Most important, the use of bounded imagination, which results from the incorporation of the visual images of the customer in imagination imagery, leads to the creation of designs that are more appealing to the customer. The findings are integrated into a discussion that clarifies the role of visual imagery in design and underscores the potential of this cognitive tool in the new product design process.
King, Keohane, and Verba (1994, pp. 27-28) argue that we should "maximize the validity of our measurement," "ensure that data-collection methods are reliable," and make all data and analysis replicable. In an effort to improve the measurement of the events data collected by the Intranational Political Interactions (IPI) project, this extension of the project produces two new valid and reliable interval-like scales. Following Azar (1982), Goldstein (1992), and Moore and Lindstrom (1996), I produce interval-like scales of cooperative and hostile political actions based on a group of experts' judgements. The collective scaling procedure produces data suitable for use in OLS regression models as well as a standardized interval-like scale that more accurately represents the true scores of event types. The paper discusses the procedures taken to derive the new measures, proceeds to argue why the new measures are improvements over existing measures, and reports the findings of statistical analytic comparisons. The statistical comparisons demonstrate that the new scales make a difference in various statistical models using different temporal units of aggregation.
An exploratory study was conducted to examine management control issues in new product development (NPD). The study focused on three management control aspects that NPD managers considered important: (1) position of NPD in the firm's organizational structure; (2) NPD process; and (3) NPD performance measures. Primary data were collected from NPD managers via interviews, workshops, and a questionnaire. For each management-control aspect studied, we examined current practice, recent changes, and how the control links to strategy.
The NPD function reported fairly high in the organization. The need to integrate NPD and strategy encouraged higher reporting levels, and shifts in reporting from engineering to marketing. The need to integrate NPD and strategy also drove the addition of NPD/strategy steps into already well-defined, phased NPD processes. However, NPD/strategy integration was not well reflected in performance measures. The firms studied used varied financial and nonfinancial performance measures, yet relatively few firms reported that their performance measures reflected key aspects of their strategies. NPD managers generally expressed dissatisfaction with the performance measurements, and firms appeared to be searching for more effective alternatives.
The physical form or design of a product is an unquestioned determinant of its marketplace success. A good design attracts consumers to a product, communicates to them, and adds value to the product by increasing the quality of the usage experiences associated with it. Nevertheless, the topic of product design is rarely it ever, encountered in marketing journals. To bring needed attention to the subject of product design and enable researchers to better investigate design issues, the author introduces a conceptual model and several propositions that describe how the form of a product relates to consumers' psychological and behavioral responses. After presenting this model, the author describes numerous strategic implications and research directions.
THE BRITISH DESIGN INNOVATION GROUP is a leader in design-management research. In gathering information from a broad cross-section of companies, one of its goals has been to distill objective data on the benefits and strategic role of design in business. Robin Roy reviews two major studies he and his colleagues have completed, and proposes an agenda for the future with respect to both the content of analysis and the methodologies used for collecting and analyzing input.
There is no issue more fundamental to new product managers than understanding the factors that separate success from failure. In this article, Robert Cooper and Elko Kleinschmidt present a series of ten hypotheses which they test using data obtained from their study of 203 new products. Significantly, these products include both commercial successes and failures, since previous studies have concentrated on either one or the other. The authors conclude that product superiority is the number one factor influencing commercial success and that project definition and early, predevelopment activities are the most critical steps in the new products development process. Success, they argue, is earned. It is not the ad hoc result of situational or environmental influences. Synergy, both marketing and technical, is crucial.
We estimate diversification's effect on firm value by imputing stand-alone values for individual business segments. Comparing the sum of these stand-alone values to the firm's actual value implies a 13% to 15% average value loss from diversification during 1986–1991. The value loss is smaller when the segments of the diversified firm are in the same two-digit SIC code. We find that overinvestment and cross-subsidization contribute to the value loss. The loss is reduced modestly by tax benefits of diversification.
Deviations in well-known stimuli attract attention. Furthermore, deviations in the appearance of stimuli affect the way in which consumers categorize stimuli. Our experiment investigates the effect of the degree of deviation of coffee packages on consumers' attention and categorization. The stimuli are modified packages of the best known Dutch ground coffee brand. The first hypothesis described a positive relation between the attention that a package gets and the degree of deviation of its appearance. Based on the categorization literature, the second hypothesis stated that an O-relation exists between the degree of deviation of the package appearance and the evaluation of the product. The data from the experiment supported both hypotheses. The results suggest that when redesigning stimuli in marketing practice, for instance of products or packages, a trade-off has to be made between (a) the high attention getting value of discrepant stimuli and (b) their ability to transfer existing positive affects to new stimuli that resemble the existing products or packages in the product category.
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Unity and prototypicality are important visual aspects of product design. These design principles were operationalized by modifying line drawings of existing products. The results of four experiments provide evidence that these two factors positively affect aesthetic response. These effects were strongest when visual properties were the sole basis of judgment and when design variations were easily compared. However, they persisted when aesthetic aspects were combined with other product information and when comparing design features was difficult. The effect of unity was found to be superadditive, suggesting that it has a relational, "all-or-none" character. Finally, regression analyses show that direct effects of the design modifications on aesthetic response exist in addition to possible indirect effects that are mediated by perceived typicality. Copyright 1998 by the University of Chicago.
Using as a point of departure previous work in marketing on optimal concept selection that utilizes product attribute-based customer preference and product cost models, the authors consider the concept selection stage of a new product development process. They offer empirical support for the need to push beyond these models to more complete “customer-ready” prototypes before choosing a concept to commercialize. Although the correlations between attribute-based predictions, on the one hand, and customer acceptance and product costs, on the other hand, are significant and substantial, too much variance is left unexplained to rely on these models in isolation. This implies that more detailed design work should be performed on several concepts in parallel. The authors also provide an integrated approach for concept generation and selection that leverages the unique strengths of marketing, design, and manufacturing in developing successful products.
The authors develop guidelines to assist managers in selecting or modifying logos to achieve their corporate image goals. An empirical analysis of 195 logos, calibrated on 13 design characteristics, identified logos that meet high-recognition, low-investment, and high-image communication objectives. High-recognition logos (accurate recognition created by high investment) should be very natural, very harmonious, and moderately elaborate. Low-investment logos (false sense of knowing and positive affect) should be less natural and very harmonious. High image logos (professional look and strong positive image) must be moderately elaborate and natural. The authors illustrate the guidelines with real logos.
The physical form or design of a product is an unquestioned determinant of its marketplace success. A good design attracts consumers to a product, communicates to them, and adds value to the product by increasing the quality of the usage experiences associated with it. Nevertheless, the topic of product design is rarely, if ever, encountered in marketing journals. To bring needed attention to the subject of product design and enable researchers to better investigate design issues, the author introduces a conceptual model and several propositions that describe how the form of a product relates to consumers’ psychological and behavioral responses. After presenting this model, the author describes numerous strategic implications and research directions.
In spite of the fact that product appearance would not seem to bear upon performance, this article provides evidence that the appearance of an industrial product may have an impact on its evaluation. Utilizing a conjoint scaling approach, Mel Yamamoto and David R. Lambert find that industrial product appearance exerts an influence, which in some circumstances exceeds the influence of certain product performance or price attributes. They suggest that attention paid to product aesthetics may have a payoff in terms of sales performance. And further, the impact of product appearance affects people in different organizational functions, across a range of technical orientations.
We examine whether the application of fundamental analysis can yield significant abnormal returns. Using a collection of signals that reflect traditional rules of fundamental analysis related to contemporaneous changes in inventories, accounts receivables, gross margins, selling expenses, capital expenditures, effective tax rates, inventory methods, audit qualifications, and labor force sales productivity, we form portfolios that earn an average 12-month cumulative size-adjusted abnormal return of 13.2 percent. We find evidence that the fundamental signals provide information about future returns that is associated with future earnings news. Moreover, a significant portion of the abnormal returns is generated around subsequent earnings announcements. These findings are consistent with the underlying focus of fundamental analysis on the prediction of earnings. Significant abnormal returns to the fundamental strategy are not earned after the end of one year of return cumulation, indicating little support for the idea that the signals capture information about multiple-year-ahead earnings not immediately impounded in price or about long-term shifts in firm risk. Additional analysis on EI holdout sample suggests that the strategy continues to generate abnormal returns in a period subsequent to the introduction of the fundamental signals in the literature, and contextual analyses indicate that the strategy performs better for certain types of firms (e.g., firms with prior bad news).
Many products compete on the basis of aesthetic appeal as well as price and brand image. Analysis of consumer reactions to attributes not directly related to a product's functional utility is essential to intelligent decisions about proposed additions to the product line. The author describes a method of deriving market segmentation information from consumer intention to purchase evaluations of a selection of product designs.
There is a growing belief that investing in industrial design is beneficial to company performance. This article sheds more light on how and when integrating industrial design in the product development process can enhance a company's competitive position. The basic premise is that the impact of industrial design on company performance is not unconditional, but dependent on industry evolution and design strategy. We opted to define industrial design in a general way, namely as the activity that transforms a set of product requirements into a configuration of materials, elements and components. This activity can have an impact on a product's appearance, user friendliness, ease of manufacture, efficient use of materials, functional performance, and so on.
The empirical data incorporated in this study stems from two Dutch manufacturing industries, namely home furniture and precision instruments. Home furniture and precision instruments were selected because the strategy of integrating industrial design in the product development process is rather mature in the first‐named industry and emerging in the second. We collected data from firms investing considerably in industrial design (n = 23) and firms investing little to nothing in industrial design (n = 24), using a semistructured questionnaire that was administrated during face‐to‐face sessions with senior managers.
Two out of the three research hypotheses were supported. It was found that the extent to which firms integrate industrial design in new product development projects has a significant and positive influence on company performance (Hla), in particular when the strategy of investing in industrial design is relatively new for the industry involved (Hlb). There was no systematic pattern indicating that design innovation is more important in industries where the use of design is mature than in industries where the use of design is emerging (H2). Instead, we found that design innovation has significant positive performance effects in both types of industries. One important managerial inference from our study is that new product development managers should consider the changing nature of competition during industry evolution while developing strategies that encompass the use of industrial design in new product development. Another important managerial inference is that, besides being innovative in the field of products, being innovative with respect to design and design strategy can help to enhance competitiveness regardless of industry evolution.
Using as a point of departure previous work in marketing on optimal concept selection that utilizes product attribute-based customer preference and product cost models, the authors consider the concept selection stage of a new product development process. They offer empirical support for the need to push beyond these models to more complete "customer-ready" prototypes before choosing a concept to commercialize. Although the correlations between attribute-based predictions, on the one hand, and customer acceptance and product costs, on the other hand, are significant and substantial, too much variance is left unexplained to rely on these models in isolation. This implies that more detailed design work should be performed on several concepts in parallel. The authors also provide an integrated approach for concept generation and selection that leverages the unique strengths of marketing, design, and manufacturing in developing successful products.
The authors develop guidelines to assist managers in selecting or modifying logos to achieve their corporate image goals An empirical analysis of 195 logos, calibrated on 13 design characteristics, identified logos that meet high-recognition low-investment, and high-image communication objectives. High-recognition logos (accurate recognition created by high investment) should be very natural, very harmonious, and moderately elaborate. Low-investment logos (false sense of knowing and positive affect) should be less natural and very harmonious. High image logos (professional look and strong positive image) must be moderately elaborate and natural. The authors illustrate the guidelines with real logos.
Design is a potent strategic tool that companies can use to gain a sustainable competitive advantage. Yet most companies neglect design as a strategy tool. What they don't realize is that good design can enhance products, environment, communications, and corporate identity.
AS CORPORATIONS SEEK to leverage design, an essential pathway is to nurture a strategic design culture. Based on an investigation of actual practices, Julie Hertenstein and Marjorie Platt suggest key elements of such a culture: positioning design effectively; articulating the design process; measuring design performance; and bringing design into the realm of strategic decision making.
It's an initial study, but the analysis indicates that good design is, indeed, good business. Julie H. Hertenstein, Marjorie B. Platt, and David R. Brown have devised a method for relating an organization's focus on design with bottom-line outcomes. They use 12 measures of financial performance and investigate 51 companies in four industries over a five-year time frame. Confirming a long-held belief—design-conscious firms generally do better.
We examine whether the application of basic concepts of fundamental analysis can yield significant abnormal returns. Using a collection of signals that reflect traditional rules of fundamental analysis related to contemporaneous changes in inventories, accounts receivables, gross margins, selling expenses, capital expenditures, effective tax rates, inventory methods, audit qualifications, and labor force sales productivity, we form portfolios that earn an average 12 month cumulative size-adjusted abnormal return of 13.2 percent. We find evidence that the fundamental signals provide information about future returns that is associated with future earnings news. Moreover, a significant portion of the abnormal returns is generated around subsequent earnings announcements. These findings are consistent with the underlying focus of fundamental analysis on the prediction of earnings. Significant abnormal returns to the fundamental strategy are not earned after the end of one year of return cumulation, indicating little support for the idea that the signals capture information about multiple-year-ahead earnings not immediately impounded in price or about long-term shifts in firm risk. Additional analysis on a holdout sample suggests that the strategy continues to generate abnormal returns in a period subsequent to the introduction of the fundamental signals in the literature, and contextual analyses indicate that the strategy performs better for certain types of firms (e.g. firms with prior bad news).
Common sense, as well as plenty of research, tells us that customer feedback can play an important role in successful product development efforts. By understanding the key factors that affect customers' evaluations of a new product, a project team improves its chances of making the right decisions throughout the design and development effort. However, customers typically lack a useful frame of reference for evaluating discontinuous, or really new products. In all likelihood, the key factors that affect customers' evaluations of radically new products differ from those for incremental innovations.
Robert Veryzer describes the results of a study that examines the customer research efforts and findings of seven firms involved in the development of discontinuous new products. This study has the following objectives: gaining insight into the customer research inputs such companies use during the development of discontinuous new products, and exploring the critical factors that influence customers' evaluations of these really new products.
The subjects in this study conducted relatively little formal customer research during the early stages of the NPD projects. The methods used for obtaining customer input during the concept generation and exploration stages were primarily qualitative. Although the companies in the study still did not focus consistently on customer issues during the technical development and design stage, the less discontinuous projects did use such traditional quantitative techniques as concept tests, clinics, and experiments during this phase of NPD. Throughout the projects in this study, the real opportunities for obtaining customer input came during the prototype testing and commercialization phases of the NPD projects.
Several key factors appeared to influence customer evaluations of the products that were being developed by the NPD teams in this study. Lack of familiarity was manifested in customers' resistance to the new products in the study. Similarly, unfamiliarity with these new products often seemed to lead customers to focus on product attributes that development team members viewed as relatively unimportant. Other factors that affected customer evaluation of the products in this study included customer uncertainty about the benefits and risks associated with the product, customers' ability to understand how the product operates, perceptions of the product's safety, and product aesthetics.
This paper assesses the importance of design in determining product costs by measuring the variation in design performance among a set of competing design efforts. This assessment is completed for a set of functionally similar products in a single product category: automatic drip coffee makers. The approach of this study is to measure the manufacturing content---the attributes of the design that drive cost---through analysis of the physical products themselves, and to estimate how variation in manufacturing content relates to variation in cost in a hypothetical manufacturing setting. We call this approach product archaeology. For the domain of coffee makers, we find significant variation in manufacturing content. This variation in manufacturing content corresponds to a range of estimated manufacturing costs, for a hypothetical manufacturing system, of approximately 50 percent of the average manufacturing cost of the products. We also find that differences in capabilities among product development efforts are the most plausible explanation for the differences in manufacturing content.
Strategy may not be the most dynamic word in the business lexicon, but reports of its death as a core discipline are premature. The analytical approach to strategy first put forward in 1980 by Professor Michael E. Porter of the Harvard Business School was a watershed in business analysis. Measuring Business Excellence revisits Competitive Strategy, Professor Porter's seminal work, and finds that it remains a powerful framework for understanding the competitive situation faced by today's organizations.
In spite of the fact that product appearance would not seem to bear upon performance, this article provides evidence that the appearance of an industrial product may have an impact on its evaluation. Utilizing a conjoint scaling approach, Mel Yamamoto and David R. Lambert find that industrial product appearance exerts an influence, which in some circumstances exceeds the influence of certain product performance or price attributes. They suggest that attention paid to product aesthetics may have a payoff in terms of sales performance. And further, the impact of product appearance affects people in different organizational functions, across a range of technical orientations.
The potential for industry-relative financial ratios to improve the prediction of firms in financial distress motivated this comparison of model specifications based on either unadjusted or industry-relative ratios. Both specifications yielded stable parameter estimates over the time periods examined. However, the industry-relative specification appeared to add incremental information not contained in the model based on the unadjusted financial ratios; the converse case did not hold. In addition, with the industry-relative specification, ex post forecast accuracy was slightly improved relative to the ex ante forecast, while with the unadjusted model specification, ex post forecast accuracy declined from that obtained ex ante.
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Typescript. Thesis (Ph. D.)--University of Florida, 1993. Vita. Includes bibliographical references (leaves 164-170).
Eight broad areas 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.
The Standard Industrial Classification (SIC) is often used to divide firms into homogeneous markets. Firms classified into the same (n + 1)-digit SIC are thought to be more homogeneous than firms sharing only the same n-digit SIC. This study measures how well the SIC succeeds at combining firms into homogeneous economic markets. Assuming that firms in more similar economic markets should display more similar sales changes, profit rates, or stock price changes than firms in less similar economic markets, the author finds that the SIC is not successful at identifying firms with such similar characteristic variables. Copyright 1989 by the University of Chicago.
Project SAPPHO consists of a comparative analysis of ‘paired’ successful and unsuccessful technological innovations, where one half of the pair is a commercial success and the other a commercial failure. In phase I of the project twenty-nine pairs were investigated, seventeen in chemical processes and twelve in scientific instruments. Five main areas of difference between successful and unsuccessful innovators emerged which related to the innovator's understanding of user needs, efficiency of development, characteristics of managers, efficiency of communications and marketing and sales efforts.In phase II, the project has been extended to include a new total of forty-three pairs, twenty-two in chemical processes and twenty-one in scientific instruments. The results of phase I have been confirmed with the same five underlying factors emerging as strongly differentiating between success and failure and with some inter-industry differences becoming clearer. These differences, by and large, relate to the basic structural and environmental differences which exist between the two industries.Following the statistical analysis a subjective review was made of thirty-four failure cases, and those factors which contributed maximally to the individual failures were identified. The results of this exercise support the results of the statistical analysis, but they also highlight some new and significant factors. Finally, some of the more important of the many hypotheses which have been forwarded as offering explanations for innovative success were tested in the tight of the phase II SAPPHO results.
Design as a Strategic Management Tool
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Why Product Development Teams Need Management Accountants
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Hertenstein, J.H. and Platt, M.B. (1998). Why Product Development
Teams Need Management Accountants. Management Accounting
10:50-55 (April).
Instructions for Design Experts TO: DMI Membership FROM
- A Appendix
Appendix A. Instructions for Design Experts TO: DMI Membership FROM: Earl Powell, President
The Benefits and Costs of Investment in Design: Using Professional Design Expertise in Product, Engineering, and Graph-ics Projects. Report of the Design Innovation Group, Open Uni-versity/Umist De economische waarde van 'Goed Indus-trieel Ontwerp
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Potter, S., Roy, R., Capon, C.H., Bruce, M., Walsh, V. and Lewis, J. (1991). The Benefits and Costs of Investment in Design: Using Professional Design Expertise in Product, Engineering, and Graph-ics Projects. Report of the Design Innovation Group, Open Uni-versity/Umist, September Roerdinkholder, F.A. (1995). De economische waarde van 'Goed Indus-trieel Ontwerp.' Amsterdam: Dutch Design Institute.
Creative Accounting? Wanted for New Product Development
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Recoding Algorithm: Ordered Ranks to Ordered Rank Percentages Rank Number of Companies Ranked 4
- B Appendix
Appendix B. Recoding Algorithm: Ordered Ranks to Ordered Rank Percentages
Rank
Number of Companies Ranked
4