۱٫ Introduction

۲٫ Theoretical Background

۳٫ Hypothesis development

۴٫ Research method

۵٫ Results

۶٫ Discussion

۷٫ Conclusions

References

Abstract

There has been ambiguity and controversy in establishing the links between the introduction of radical innovations and firm performance. While radical innovations create customer value and grow product sales, they are also fraught with uncertainty due to customer resistance to innovative products and significant costs associated with commercialization. This research aims to explain the contrarian findings between radical innovations and firm performance in a business-to-business (B2B) context by examining two mediating variables – new product advantage and customer unfamiliarity. Using a multi-informant approach, the authors collected survey data from a sample of 170 Spanish B2B firms engaged in new product development, provided by 357 managers. The authors find that, while new product advantage positively mediates the relationship between product radicalness and firm performance, customer unfamiliarity has a negative mediation effect on this relationship. Furthermore, the authors examine the moderated mediation effect by industry type, manufacturing vs. service, and find that it moderates the mediation of customer unfamiliarity: The negative impact of product radicalness on customer unfamiliarity is greater for manufacturing firms than for service firms. With these findings, the authors discuss implications for development and marketing of radical innovations and how those implications facilitate firm performance in the B2B context.

Introduction

There has been ambiguity and controversy in establishing the link between introduction of radical innovations and firm performance. Some empirical studies find a positive relationship between the two variables (Ordanini & Parasuraman, 2011; Salomo, Talke, & Strecker, 2008; Urhahn & Spieth, 2014), but others demonstrate absence of a relationship between them (Lin & Chen, 2007; Stock & Reiferscheid, 2014). A third group of studies have found that the relationship between radical innovation and performance is contingent on factors such as environment, technology, and product related factors (Jansen, Van Den Bosch, & Volberda, 2006; Kyriakopoulos, Hughes, & Hughes, 2016; Pérez-Luño, Gopalakrishnan, & Valle Cabrera, 2014; Schmidt, Walter, & Walter, 2013; Sheng, Zhou, & Lessassy, 2013). This research aims to resolve the radical innovation-performance puzzle by empirically testing two competing relationships that co-exist between product radicalness and firm performance and by adopting a contingency perspective to further examine how contextual factors moderate those relationships.