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Product innovation in small established enterprises: Managing processes and resource scarcity
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.).
2014 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis examines product innovation processes in small established enterprises. The research questions are: (1) what motivates small established enterprises to innovate, (2) how do small established enterprises perform product innovation, and (3) how do small established enterprises manage resource scarcity in their product innovation processes? To answer the research questions, a multiple case study approach was chosen with three small established enterprises as cases and different product innovation processes as embedded units of study. The data collection method used was observation during a period of five months, complemented by interviews and secondary data. Product innovation in small established enterprises seems to be motivated by solving existing customers’ problems and the need for a sustained steady cash flow. A steady cash flow is also found to be a prerequisite during the product innovation processes. Product innovation seems to occur when there is a risk of decreased cash flow and/or when existing customers can be satisfied with new products that increase their loyalty so as to secure future sales, cash flow, and the enterprise’s survival in the long run. Promising innovation ideas alone do not result in product innovation. An innovation idea must also have supportive existing customers for product innovation to occur.

Product innovation processes in the studied small established enterprises are found highly context dependent, intertwined in operational processes and made possible by a small organic organization and closeness to existing customers. The product innovation processes are further found to follow a flexible and informal overall scheme optimized for decreasing market and technology uncertainty and risk, dealing with resource scarcity, and facilitating fast and easy commercialization to avoid or moderate dips in cash flow. The design processes within the innovation processes can be linearly structured or cyclical and experimental, depending on the experienced novelty.

To manage resource scarcity during the product innovation processes, the studied small enterprises used many different bootstrapping methods in combination. These methods can be divided into three categories according to their overall functions: for using existing resources more efficiently, for increasing resources and to secure a fast payback on resources invested in NPD. The studied small enterprises were due to their resource scarcity further found to favor an innovation strategy, only involving new products done with known technology and targeting existing markets. This way to innovate, which creates new products in a resource-efficient way that are accepted by the enterprises’ existing markets, seems to prevent unsuccessful product innovation, while at the same time excluding technologically radical innovation and innovation targeting new markets. 

Place, publisher, year, edition, pages
KTH Royal Institute of Technology, 2014. , 82 p.
Series
Trita-IEO, ISSN 1100-7982 ; 2014:01
Keyword [en]
innovation process, small enterprises, product innovation, resources, resource scarcity, SMEs, bootstrapping, cash flow, commercialization, design process, lead users, motivation, NPD, small companies, small firms, innovation management, Penrose, resource dependence theory
National Category
Social Sciences
Identifiers
URN: urn:nbn:se:kth:diva-139064ISBN: 978-91-7501-970-3 (print)OAI: oai:DiVA.org:kth-139064DiVA: diva2:683090
Public defence
2014-01-17, E2, Lindstedtsvägen 30, Stockholm, 10:00 (Swedish)
Opponent
Supervisors
Note

QC 20140102

Available from: 2014-01-07 Created: 2014-01-02 Last updated: 2014-01-09Bibliographically approved
List of papers
1. The context of innovation in small enterprises: Leadership,organization, and linkages
Open this publication in new window or tab >>The context of innovation in small enterprises: Leadership,organization, and linkages
(English)Article in journal (Other academic) Submitted
National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-139060 (URN)
Note

QS

Available from: 2014-01-02 Created: 2014-01-02 Last updated: 2014-01-07Bibliographically approved
2. Product and process novelty in small companies’ design processes
Open this publication in new window or tab >>Product and process novelty in small companies’ design processes
2010 (English)In: Creativity and Innovation Management, ISSN 0963-1690, E-ISSN 1467-8691, Vol. 19, no 4, 405-416 p.Article in journal (Refereed) Published
Abstract [en]

 This article explores the design processes in small companies and investigates how these design processes are executed. The influence of two different kinds of novelty on the design processes is further examined: the relative novelty of the product being developed and the relative novelty of design processes. The relative novelty of the product is high if it is a radically new product to develop. High relative novelty for design processes typically means no experience or knowledge about design processes. Based on an embedded multiple case study of three small companies in Sweden, eight different design processes are described and analysed. The results show that the design processes differ, even within the same company, and that relative novelty affects the design process. If the relative novelty of both the product to be developed and of the design processes is low, a formalized and linear design process was found to work. A design process that is cyclical, iterative and knowledge-creating was found to work irrespective of the relative novelty. Customers and users were found to play a large and important role in the design processes.

Place, publisher, year, edition, pages
Wiley-Blackwell, 2010
National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-139061 (URN)000208220700008 ()
Note

QC 20140102

Available from: 2014-01-02 Created: 2014-01-02 Last updated: 2017-12-06Bibliographically approved
3. Motivation for innovation in small enterprises
Open this publication in new window or tab >>Motivation for innovation in small enterprises
2012 (English)In: International Journal of Technology Management, ISSN 0267-5730, E-ISSN 1741-5276, Vol. 60, no 3/4, 242-265 p.Article in journal (Refereed) Published
Abstract [en]

 This study examines which factors motivate small enterprises to realise product innovations and how these factors affect their innovation processes. In a multiple embedded case study of three small enterprises, 11 different innovation processes, both realised and unrealised, were discovered and analysed. Strategy, competition, profit, growth, source of innovation idea, innovation process size and novelty were not found to explain the motivation to innovate, but ten interdependent motivating factors did, of which four externally oriented factors were found conclusive for innovation to occur. The factors found, dealing with resource scarcity, technology and market uncertainty and risk, and cash flow, highly affected how the innovation processes were carried out. The findings further show that the need to maintain steady cash flow seems to be the overall motive for product innovation in small enterprises.

Place, publisher, year, edition, pages
InderScience Publishers, 2012
National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-139062 (URN)10.1504/IJTM.2012.049441 (DOI)000309780000005 ()
Note

QC 20140102

Available from: 2014-01-02 Created: 2014-01-02 Last updated: 2017-12-06Bibliographically approved
4. Managing resource scarcity in small enterprises’ innovation processes
Open this publication in new window or tab >>Managing resource scarcity in small enterprises’ innovation processes
(English)Article in journal (Other academic) Submitted
National Category
Economics and Business
Identifiers
urn:nbn:se:kth:diva-139063 (URN)
Note

QS

Available from: 2014-01-02 Created: 2014-01-02 Last updated: 2014-01-07Bibliographically approved

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