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Journal cover: International Journal of Operations & Production Management

International Journal of Operations & Production Management

ISSN: 0144-3577

Online from: 1980

Subject Area: Operations and Logistics Management

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Climbing the value chain: Strategies to create a new product development capability in mature SMEs


Document Information:
Title:Climbing the value chain: Strategies to create a new product development capability in mature SMEs
Author(s):Hannah Noke, (Nottingham University Business School, University of Nottingham, Nottingham, UK), Mathew Hughes, (Nottingham University Business School, University of Nottingham, Nottingham, UK)
Citation:Hannah Noke, Mathew Hughes, (2010) "Climbing the value chain: Strategies to create a new product development capability in mature SMEs", International Journal of Operations & Production Management, Vol. 30 Iss: 2, pp.132 - 154
Keywords:Innovation, Product positioning, Small to medium-sized enterprises, Value chain
Article type:Research paper
DOI:10.1108/01443571011018680 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Abstract:

Purpose – Increasing productivity gaps and declining manufacturing bases create complex challenges for mature small to medium enterprises (SMEs). One solution advocated by academia is to reposition along the value chain – moving to a position of greater value. The purpose of this paper is to examine strategies used by firms to reposition through creating a new product development (NPD) capability. In doing so, the paper seeks to resolve gaps in extant literature on NPD in mature SMEs.

Design/methodology/approach – An exploratory approach is taken, analysing in-depth case studies of three mature UK manufacturing SMEs.

Findings – Four strategic approaches to enable the creation of a NPD capability (strategic alliances, licensing key technologies and ideas, outsourcing and deploying an internal development process) are found. Each may facilitate an SME to reposition but the findings highlight that these strategies are not mutually exclusive as different combinations were employed to accelerate and leverage change.

Research limitations/implications – Limited number of case studies constrains wider understanding despite providing richness. The findings highlight four different strategies for repositioning but there may be other routes.

Practical implications – Deeper understanding of how to climb the value chain, providing valuable lessons for mature SMEs facing a need to reposition to generate new growth opportunities.

Originality/value – The paper provides an understanding of how mature manufacturers utilise different strategies to overcome resource constraints and generate a NPD capability to assist in repositioning. This resolves weaknesses in current literature that so far have not adequately examined the process of shaping a NPD capability and the strategies used to reposition.



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