Innovation from a small company perspective-an empirical investigation of new product development strategies in SMEs

It is generally acknowledged that a company's product strategy, the nature of that strategy and the extent to which it is clearly communicated within the company, have a marked effect on business performance. The paper reports on the results of a study of 88 UK SMEs recently undertaken by the DERC. The research was aimed at determining the relationship between a company's performance in terms of the success of its new product development (NPD) activity and the extent to which such activity is governed by a predefined product strategy. The findings show that over 90% of the companies considered that innovation was an important element of the company's strategy. However, nearly 50% of the companies failed to show any evidence of a documented product strategy to underpin the processes of innovation. This work has allowed possible drivers for innovation to be examined in the context of small company operations. The research also identifies some issues not always associated with the innovation and product development processes which nonetheless can have a profound effect on the success, or otherwise, of this activity.