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How do firms identify and prioritize innovation domains based on trends in customer needs?

New product development

Product innovation

Technological change

Organizational learning

Diversification (marketing strategy)

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Firms identify and prioritize innovation domains based on trends in customer needs through a complex interplay of factors. Research suggests that firms evaluate customer requests for new product features through a cost-benefit calculation, but the decision-making process is more nuanced, considering organizational structures, competitive pressures, and resource allocation incentives . Additionally, the demands of a firm's customers play a crucial role in shaping resource allocation for technological innovation, with established firms focusing on technologies that address existing customer needs, potentially overlooking emerging market opportunities . Broadening horizons in innovation objectives and knowledge sources is associated with successful innovation, indicating that firms may benefit from accessing a large number of knowledge sources to improve their odds of successful innovation .

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Journal Article•DOI Customer Concentration, Executive Attention, and Firm Search Behavior Weiguo Zhong, Zhiming Ma, Tony W. Tong, Yuchen Zhang, Luqun Xie - Show less +4 more 27 Oct 2021-Academy of Management Journal 18 Citations	Not addressed in the paper.
Journal Article•DOI The dynamics of product innovation and firm competences Erwin Danneels 01 Dec 2002-Strategic Management Journal 2.1K Citations	Firms identify and prioritize innovation domains by linking competences to technologies and customers, categorizing projects as exploitation or exploration, and seeking input from new customers for competence development.
Open access•Journal Article•DOI Does complexity deter customer‐focus? Sendil K. Ethiraj, Narayan Ramasubbu, Mayuram S. Krishnan - Show less +2 more 01 Feb 2012-Strategic Management Journal 26 Citations	Firms prioritize innovation domains based on customer needs by considering organizational structures, competitive pressures, and resource allocation processes, as revealed in the study.
Journal Article•DOI Customer power, strategic investment, and the failure of leading firms Clayton M. Christensen, Joseph L. Bower - Show less +1 more 01 Mar 1996-Strategic Management Journal 2.4K Citations	Firms prioritize innovation domains by aligning resources with existing customer needs, leading to success in technologies demanded by powerful customers and potential failure in emerging market technologies.
Open access•Journal Article•DOI Innovation objectives, knowledge sources, and the benefits of breadth Aija Leiponen, Constance E. Helfat - Show less +1 more 01 Feb 2010-Strategic Management Journal 1.1K Citations	Firms identify and prioritize innovation domains by accessing a large number of knowledge sources and setting broad innovation objectives, enhancing the odds of successful innovation by leveraging diverse ideas.

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How do firms identify and prioritize domains for innovation based on market trends and customer needs?5 answersFirms identify and prioritize domains for innovation by leveraging strategic foresight in technology and innovation management. This involves collecting, analyzing, and interpreting data to detect emerging topics and trends with the help of artificial intelligence-based data mining models. Additionally, understanding customer needs and involvement in new product development, innovating beyond traditional methods, disseminating research findings, and defining marketing's role in innovation are crucial themes identified for firms to contribute effectively to innovation efforts. Moreover, firms that introduce changes affecting value proposition, value actualization, and interaction space are perceived as more innovative and attractive to customers, highlighting the importance of aligning innovations with customer perceptions. Integrating penalty-reward contrast analysis (PRCA) and improvement gap analysis (IGA) aids in prioritizing innovations and improvements by identifying nonlinear impacts of attributes on customer satisfaction, enhancing managerial decision-making.

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How should a pharmaceutical company prioritize innovation?4 answersA pharmaceutical company should prioritize innovation by focusing on both exploratory and exploitative innovations, while also considering the cost of innovation and transparency in reporting. By pursuing both types of innovation, companies can secure a competitive advantage, increase revenue, and ensure survival and growth. Exploratory innovation involves developing new technologies or processes to explore new markets, while exploitative innovation involves modifying or improving existing technologies for practical use. Additionally, companies should prioritize transparency in reporting the costs of innovation, as this can provide a more objective view of their priorities and potentially shift the focus towards more detailed information on innovation costs. By considering these factors, pharmaceutical companies can develop an innovation strategy that aligns with the changing business environment and meets the priorities and objectives for economic growth.

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