The Effects of Mainstream and Emerging Customer Orientations on Radical and Disruptive Innovations

    Authors

    V. Govindarajan; P. K. Kopalle;E. Danneels

    Comments

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    Abbreviated Journal Title

    J. Prod. Innov. Manage.

    Keywords

    MARKET ORIENTATION; PRODUCT INNOVATION; SEARCH; EXPLORATION; VALIDITY; BUSINESS; MYOPIA; FIRMS; Business; Engineering, Industrial; Management

    Abstract

    The merits of being customer-oriented for firm innovation have long been debated. Firms focused on their existing customers have been argued to be less innovative. This paper distinguishes between mainstream and emerging customer orientations and examines their effects on the introduction of disruptive and radical product innovations. Radical product innovations draw on a substantially new technology and could initially be targeted at a mainstream or an emerging market. In contrast, disruptive innovations are initially targeted at an emerging market, and may not involve the newest technology. This paper hypothesizes that mainstream customer orientation is negatively related to disruptive innovation and positively related to radical innovation, and that emerging customer orientation is positively related to disruptive innovation. To test these hypotheses, longitudinal and multiple informant data from senior executives in 128 SBUs of 19 Fortune 200 corporations are analyzed, with technology scanning and willingness to cannibalize as key control variables. The results support the hypotheses, providing evidence for contrasting effects of being oriented to mainstream customers and/or emerging customers on radical and disruptive innovations. Mainstream customer orientation has a positive impact on the introduction of radical innovations but a negative impact on disruptive innovation, while emerging customer orientation has a positive effect on disruptive innovation and is unrelated to radical innovations. Technology scanning is positively related to radical innovation but not to disruptive innovation, supporting the idea that disruptive innovation may not require new technology. In contrast, willingness to cannibalize is positively related to disruptive innovation but not to radical innovation, supporting the idea that radical innovation does not require cannibalization of existing investments. Additionally, mainstream customer orientation is found to have a near-zero correlation with emerging customer orientation, indicating that the two can coexist and can be pursued simultaneously.

    Journal Title

    Journal of Product Innovation Management

    Volume

    28

    Publication Date

    1-1-2011

    Document Type

    Article

    Language

    English

    First Page

    121

    Last Page

    132

    WOS Identifier

    WOS:000296417800009

    ISSN

    0737-6782

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