A study of the factors influencing new product development success in the South African investment sector

McCracken, Kim (2011-12)

Thesis (MComm)--Stellenbosch University, 2011.

Thesis

ENGLISH ABSTRACT: Organisations today form part of a global market economy characterised by constant change and a high level of competition. This is especially true for organisations functioning in competitive markets or industries, such as the service industry. New Product Development (NPD) has been recognised as an avenue for organisations to remain relevant and competitive in this constantly changing landscape. A successful new product can potentially do more good for an organisation than anything else that can happen to it. Despite this critical role, the strategic and operational aspects of the product development process are poorly understood, particularly in the service industry. The South African financial services industry is an example of a service industry characterised by a high level of competition, rapid technological advancements, stringent regulations and changing client needs. This is particularly true for the investment sector of the industry, which endeavours to remain relevant and progressive within both a domestic and an international context. As a result, organisations functioning in the investment sector increasingly need to engage in developing and introducing new products to ensure their survival. Against this background, such organisations should realise the importance and potential benefits of an increased understanding of how to improve the success of their NPD efforts. The purpose of this study was therefore to investigate factors influencing the success of New Product Development in the investment sector of the South African financial services industry. Twelve success factors were defined for the purpose of the study. They are: a successful launch, effective NPD management, product superiority, a favourable market environment, good use of communication, effective IT systems, a NPD-friendly corporate culture and the use of a formal NPD process, legislation, distribution of the product, the marketing budget, and the timing of the release of the product. Additionally, nine measures of success were examined, namely: commercial, technical, financial and sales measures, as well as the NPD process followed the level of client satisfaction, and the size, performance and longevity of the product. This study made use of a structured questionnaire, which was developed, based on the literature reviewed and on the feedback from the pilot study. The questionnaire made use of a seven-point Likert scale, and was electronically administered via email to the chosen sample group. The results from this study indicated that 10 of the 12 identified success factors have a significant influence on one or more of the measures of success. The remaining two success factors, namely, the distribution of the product and the marketing budget, were found to have no significant influence on any of the measures of NPD success. It was also revealed that three of the success factors had a significant influence on the overall measure of NPD success (all 9 measures grouped into one), namely, the characteristics of a "superior product"; the implementation of an effective IT system; and the timing of the product release. Furthermore, the implementation of effective IT systems revealed an unexpected negative relationship with three measures of success as well the overall measure of NPD success (all 9 measures grouped into one). A number of implications were suggested and recommendations made, based on the findings. Specific recommendations were made to NPD practitioners, regarding methods which could be implemented to enhance and better manage the influence of the identified success factors in order to increase their product development success. An important recommendation was made regarding the IT system project requirements and associated costs. It was recommended that the IT system requirements be carefully scoped in the infancy stage of the project by consulting with an IT specialist because of its influence on both the overall costs and project success. Specific recommendations were further made regarding a number of the other identified success factors. Finally, based on the findings, several recommendations were made regarding further research.

AFRIKAANSE OPSOMMING: In die huidige klimaat van die wêreld-ekonomie staar organisasies gedurige verandering en groot kompetisie in die gesig. Dit is veral waar vir organisasies wat moet funksioneer en oorleef in kompeterende markte of industrieë, soos die dienste industrie. Dit word algemeen aanvaar dat die konsep van Nuwe Produk Ontwikkeling (NPO) 'n noodsaaklike opsie geword het vir besighede en organisasies om relevant en kompeterend te bly in hierdie konstante veranderende landskap. 'n Suksesvolle nuwe produk kan vir 'n besigheid groter waarde toevoeg as enigiets anders wat daarmee sou gebeur. Ten spyte van hierdie belangrike en beslissende rol wat dit speel, is daar min begrip vir die rol van strategiese en operasionele aspekte van die Produk Ontwikkelingsproses veral in die dienste industrie. Die Suid-Afrikaanse finansiële dienste industrie is 'n voorbeeld van 'n dienste industrie wat gekenmerk word deur sterk kompetisie, snelle tegnologiese ontwikkeling, streng regulering en veranderende kliëntebehoeftes. Dit geld veral vir die beleggingsektor in die industrie, wat daarna streef om relevant en progressief te bly in beide 'n plaaslike, sowel as internasionale konteks. Gevolglik, ten einde hul voortbestaan te verseker, is dit toenemend noodsaaklik dat organisasies in die beleggingsektor gedurig nuwe produkte ontwikkel en toepas. Teen hierdie agtergrond is dit noodsaaklik dat sulke besighede die belangrikheid, sowel as die potensiële voordele daarvan besef dat 'n bewussyn gekweek word ten opsigte van maniere om die NPO se sukses te verseker. Die doel van hierdie studie was dus om die faktore te ondersoek wat die sukses beïnvloed van NPO binne die beleggingsektor van die Suid Afrikaanse finansiële dienste industrie. Twaalf sukses faktore was vir die doel van hierdie studie geïdentifiseer. Hulle is: 'n suksesvolle bekendstelling, doeltreffende NPO bestuur, 'n superieure produk, gunstige markomstandighede, goeie gebruik van kommunikasie, doeltreffende IT-stelsels, 'n korporatiewe kultuur wat NPO vriendelik is, gebruik van formele NPO prosesse, wetgewing, verspreiding van die produk, die bemarkingsbegroting, en die tydsberekening ten opsigte van die produk se bekendstelling. Verder is nog nege maatstawwe van sukses gemeet, naamlik: kommersieël, tegnies, finansieel- en verkoopsmaatstawwe, sowel as die NPO-proses wat gevolg is, die vlak van tevredenheid van die kliënt, en die omvang, prestasie en lewensverwagting van die produk. Hierdie studie het gebruik gemaak van 'n gestruktureerde vraelys wat ontwikkel is op die basis van die literatuur wat hersien is, asook terugvoering vanaf die loodsstudie. Die vraelys het gebruik gemaak van 'n sewe-punt Likert skaal en was elektronies geadministreer deur middle van e-pos aan die uitgesoekte steekproef groep. Die resultate van hierdie studie het aangedui dat 10 uit die 12 suksesfaktore wat geïdentifiseer is, 'n beduidende invloed gehad het op een of meer van die maatstawwe van sukses. Die laaste twee, naamlik, die verspreiding van die produk en die bemarkingsbegroting, het nie 'n noemenswaardige invloed gehad op enige van maatstawwe van NPO sukses nie. Dit het ook duidelik geword dat drie van die suksesfaktore wel 'n beduidende invloed gehad het op die algehele NPO maatstawwe van sukses (al nege saam groepeer as een), naamlik, die eienskappe van 'n "superieure produk"; die aangewend van 'n effektiewe IT-stelsel; en die tydsberekening ten opsigte van die produk se bekendstelling. Verder, die aanwending van 'n effektiewe IT stelsel het 'n onverwagse negatiewe verhouding gevorm met drie maatstawwe van sukses asook met die algehele NPO maatstawwe van sukses (al nege saam groepeer as een). Verskeie gevolge is genoem en aanbevelings is gemaak op grond van die bevindings. Spesifieke aanbevelings is aan die NPO praktisyns gelewer ten opsigte van stelsels wat toegepas kan word om genoemde suksesfaktore doeltreffend te bestuur en te verbeter en gevolglik die sukses van die produk ontwikkeling te verhoog. 'n Belangrike aanbeveling was met betrekking tot die IT-stelsel se projek behoeftes en gepaardgaande kostes. Daar is voorgestel dat die omvang van die IT-stelsels in die beginstadium met groot omsigtigheid bepaal word en 'n kundige op die gebied van IT behoeftes moet geraadpleeg word, aangesien dit 'n groot impak kan hê op oorhoofse kostes, sowel as die sukses van die projek. Meer spesifieke aanbevelings is ook gedoen ten opsigte van sekere van die ander faktore wat geïdentifiseer is. Op grond van hierdie bevindings kan ten slotte verklaar word dat daar etlike aanbevelings ter ondersteuning van verdere navorsing was.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/17946
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