Market Vision and the Front End of NPD for Radical Innovation: The Impact of Moderating Effects

Market vision is a mental model that helps focus the organization on a new market application for an advanced technology during the fuzzy front end of the new product development process. Previous research demonstrates that firms involved in the development of radically new, high-tech products need to develop a market visioning competence (MVC) in order to develop an effective market vision (MV), and these capabilities, in turn, have been found to have a positive effect on key aspects of the early performance (EP) of these firmsspecifically, the ability to attract capital and early success with customers. Based on a major empirical study of the nanotechnology sector, the research described in this paper takes an important step forward by focusing on factors in both the external and internal environment of the firm, and their moderating impact on the paths that link MVC, MV, and EP. External structural factors relevant to the firm's competitive environment as well as internal factors, including firm resources, size, incumbency, and technology, are shown to have significant moderating effects both on the way in which MV unfolds and on its capacity for affecting positive returns for the firm when undertaking radical innovation. Five of seven hypotheses were supported by the research. Both level of incumbency (the extent to which the firm has taken part in previous generations of a given technology) and resource availability are shown to positively impact the link between MVC and MV. Also, appropriability (i.e., protection for innovations) and reputation of the firm were found to positively impact the path to EP. Finally, a low level of industry concentrationthat is, a large number of small firmswere found to have a positive effect on the path to EP. In sum, the findings support the structure of the model and the majority of the hypothesized moderating relationships, suggesting important implications for management.