MATERI DAN REVIEW JURNAL

“INNOVATION AND NEW PRODUCT STRATEGY”

Mata Kuliah
Manajemen Pemasaran Lanjutan

Dosen Pengampu
Prof. Dr. Astrid Puspaningrum, SE., MM

Nama Anggota
Maudy Amalyah Dodhy Putri 236020200111024
Muhammad Rifqi Fakhar 236020200111043

MAGISTER MANAJEMEN
FAKULTAS EKONOMI DAN BISNIS
UNIVERSITAS BRAWIJAYA
2023
Innovation and New Product Strategy

1. Inovasi sebagai Proses yang Digerakkan oleh Pelanggan

Peluang produk baru yang menawarkan nilai unggul bagi pelanggan
berkisar dari inovasi yang benar-benar baru hingga peningkatan tambahan pada
produk yang sudah ada. Kami membahas berbagai jenis inovasi, pentingnya
menemukan peluang nilai pelanggan, dan pendorong utama inovasi yang
sukses.
a. Jenis-jenis Inovasi
Inovasi dapat diklasifikasikan berdasarkan (1) kebaruan bagi pasar;
dan (2) sejauh mana nilai pelanggan yang diciptakan, yang menghasilkan
jenis-jenis inovasi sebagai berikut:
- Inovasi Transformasional: Produk yang benar-benar baru dan nilai yang
diciptakan sangat besar. Contohnya adalah CNN News Channel, mesin
anjungan tunai mandiri, dan kamera digital.
- Inovasi Substansial: Produk yang secara signifikan baru dan
menciptakan nilai penting bagi pelanggan. Contohnya adalah Kimberly
Clark Huggies/Pampers dan Diet Coke.
- Inovasi Tambahan: Produk baru yang memberikan kinerja yang lebih
baik atau nilai yang dirasakan lebih besar (atau biaya yang lebih
rendah), termasuk Coca-Cola rasa baru.
Inisiatif produk baru perusahaan dapat mencakup inovasi dalam satu
atau lebih dari tiga kategori tersebut. Proses perencanaan produk baru yang
dalam hal ini ini berlaku untuk salah satu dari ketiga kategori tersebut dan
digunakan dalam merencanakan layanan baru serta barang berwujud.
Inisiatif produk baru dipandu oleh analisis kebutuhan pelanggan. Bahkan
inovasi transformasional harus memiliki hubungan dengan kebutuhan yang
tidak terpenuhi oleh produk yang sudah ada. Namun, pelanggan potensial
mungkin bukan merupakan papan suara yang baik untuk inovasi yang
sangat baru. Yang penting, inovasi transformasional ini mungkin memiliki
dampak yang mengganggu terhadap produk yang sudah ada.
b. Menemukan Peluang Nilai Pelanggan
Persyaratan nilai pelanggan memberikan informasi penting untuk
menentukan di mana peluang yang ada untuk mengembangkan produk baru.
Identifikasi dan analisis segmen pasar membantu menemukan segmen yang
menawarkan peluang produk baru bagi organisasi. Studi ekstensif tentang
pelanggan yang ada dan calon pelanggan serta persaingan sangat penting
dalam memandu perencanaan produk baru yang efektif. Kepuasan
pelanggan menunjukkan seberapa baik pengalaman penggunaan produk
dibandingkan dengan nilai yang diharapkan oleh pembeli. Semakin dekat
kesesuaian antara harapan dan pengalaman penggunaan, semakin baik
penyampaian nilai yang dihasilkan.
Tujuan dari analisis nilai pelanggan adalah untuk mengidentifikasi
kebutuhan akan:
1) produk baru;
2) perbaikan pada produk yang sudah ada;
3) perbaikan pada proses yang menghasilkan produk; dan
4) perbaikan pada layanan pendukung.
Tujuannya adalah untuk menemukan kesenjangan (peluang) antara
harapan pembeli dan sejauh mana harapan tersebut terpenuhi.
c. Mencari Peluang Produk Baru
Setiap peluang nilai harus dipertimbangkan dalam hal apakah
organisasi memiliki kapabilitas untuk memberikan nilai pelanggan yang
unggul. Mengembangkan produk untuk kategori produk baru membutuhkan
penilaian yang realistis terhadap kemampuan organisasi terkait kategori
baru tersebut. Bermitra dengan perusahaan yang memiliki kemampuan yang
dibutuhkan merupakan pilihan terkait penambahan kategori produk baru.
1) Mencocokkan Kemampuan dengan Nilai Peluang.

Setiap peluang bisnis harus dipertimbangkan dengan cermat

oleh sebuah organisasi, dengan pertimbangan terhadap kemampuan
yang dimilikinya untuk memberikan nilai pelanggan yang unggul.
Organisasi harus realistis dalam menilai apakah mereka memiliki
kemampuan untuk mengembangkan produk baru atau memasuki
kategori produk baru. Jika tidak, maka bermitra dengan perusahaan
lain yang memiliki kemampuan yang dibutuhkan bisa menjadi pilihan
untuk memperluas lini produk atau menciptakan produk baru yang
lebih baik. Dalam konteks ini, strategi bisnis harus didasarkan pada
penilaian rasional terhadap kemampuan internal dan kolaborasi
dengan pihak eksternal yang sesuai.

2) Transformational Innovations.
Pelanggan tidak selalu dapat menjadi panduan yang baik untuk
ide-ide produk yang benar-benar baru dan revolusioner karena mereka
mungkin tidak mengerti bagaimana produk baru ini akan
menggantikan produk yang sudah ada. Dalam kasus seperti ini,
manajemen perlu memiliki visi tentang inovasi tersebut dan bersedia
berkomitmen untuk mengembangkan teknologi yang diperlukan,
meskipun ada risiko bahwa visi manajemen bisa salah.
Metode analisis yang biasa digunakan untuk meningkatkan
produk yang sudah ada mungkin tidak sesuai untuk mengukur potensi
inovasi yang benar-benar baru. Inovasi radikal dapat mengganggu
 teknologi yang sudah ada dan memiliki dampak negatif pada
perusahaan-perusahaan terkemuka yang mengadopsi strategi produk
baru dengan teknologi yang sudah ada.
Tekanan dari komoditisasi dan persaingan global yang intens
memaksa perusahaan untuk berubah. Ketika produk menjadi
komoditas, margin keuntungan menurun, dan keunggulan yang
berbeda sulit dicapai. Oleh karena itu, penting untuk fokus pada pasar
yang tidak dilayani dengan baik oleh teknologi tradisional. Produk
yang dikembangkan dari teknologi yang mengganggu yang saat ini
belum dihargai oleh pelanggan bisa saja menjadi pilihan yang tepat
untuk kebutuhan nilai di masa depan.

d. Initiatives of Successful Innovators

Perusahaan-perusahaan tertentu terlihat selalu unggul dalam
mengembangkan produk baru yang sukses, dan ini seringkali karena mereka
mengikuti inisiatif-inisiatif strategis yang serupa. Inisiatif-inisiatif strategis
yang ditampilkan dalam Gambar 8.3 secara konsisten telah menjadi
indikator yang baik untuk organisasi yang sukses dalam berinovasi,
berdasarkan penelitian, penilaian manajemen, pengalaman, dan analisis
pengalaman inovasi perusahaan-perusahaan tertentu. Membangun budaya
inovatif sangat penting untuk menciptakan produk baru yang sukses. Hal ini
memerlukan manajemen puncak untuk menjadikan inovasi sebagai prioritas
organisasi yang berbeda dan mengkomunikasikan pentingnya inovasi
kepada semua karyawan. Selain itu, menentukan strategi inovasi yang tepat
melibatkan pengertian tentang lingkup produk, pasar, dan teknologi yang
ingin dikejar oleh organisasi. Hal ini melibatkan penentuan tujuan dan
lingkup perusahaan yang memberikan pedoman dan batasan penting dalam
perencanaan produk baru. Proses perencanaan produk baru yang berkualitas
tinggi sangat penting untuk mengoperasikan strategi inovasi organisasi.
Yang tidak kalah pentingnya adalah alokasi sumber daya yang memadai
untuk inisiatif produk baru. Akhirnya, sejauh mana organisasi dapat
memanfaatkan kemampuannya dalam peluang produk dan pasar baru yang
 menjanjikan akan meningkatkan kinerja inovasi (jika upaya pemanfaatan
berhasil).

e. Recognizing the Realities of Product Cannibalization

Cannibalization terjadi ketika produk baru menarik penjualan dari
produk yang sudah ada. Para eksekutif mungkin enggan mengembangkan
produk yang lebih baik karena produk yang sudah ada sukses. Sebaliknya,
cannibalization yang proaktif seringkali menjadi strategi yang layak.
Cannibalization proaktif terdiri dari upaya sengaja dan berkelanjutan untuk
mengembangkan dan memperkenalkan produk baru yang menarik pembeli
produk yang sudah ada perusahaan. Konsep ini didasarkan pada logika
strategis yang menawarkan kepada pembeli solusi yang lebih baik untuk
kebutuhan yang saat ini telah terpenuhi. Ketidaksetujuan eksekutif terhadap
cannibalization dipicu oleh keyakinan bahwa bersaing dengan produk dan
layanan perusahaan sendiri adalah tidak produktif. Namun, kenyataannya
adalah bahwa perubahan dalam persyaratan pasar dan peluang nilai
pelanggan akan menghasilkan ancaman dari pesaing untuk produk dan
teknologi yang sudah ada.

2. New-Product Planning
Sebuah produk baru tidak harus menjadi terobosan teknologi tinggi untuk
sukses, tetapi harus memberikan nilai pelanggan yang unggul. Pentingnya
menciptakan budaya inovasi adalah dasar yang penting untuk keberhasilan
inovasi. Selain itu, perlu ada batasan-batasan terkait jenis produk baru yang
akan dipertimbangkan untuk pengembangan.
a. Developing a Culture and Strategy for Innovation
Komunikasi yang terbuka di seluruh organisasi dan tingkat
keterlibatan serta minat karyawan yang tinggi merupakan ciri khas budaya
inovatif. Menyadari pentingnya
1) Budaya Inovasi : Organisasi dengan budaya inovasi cenderung
memiliki komunikasi terbuka di seluruh perusahaan dan tingkat
keterlibatan dan minat karyawan yang tinggi. Google, sebagai contoh,
telah melakukan berbagai tindakan untuk mendorong inisiatif inovasi.
Bukti budaya inovasi bisa ditemukan dalam pernyataan misi
perusahaan, pesan iklan, presentasi oleh eksekutif puncak, dan studi
kasus dalam publikasi bisnis.
2) Membangun Budaya Inovasi : Membangun dan memperkuat budaya
inovasi dapat didorong oleh beberapa inisiatif manajemen yang saling
terkait. Ini termasuk menyelenggarakan workshop inovasi bagi
eksekutif puncak, mengembangkan pernyataan inovasi, melaksanakan
program pelatihan inovasi, mengkomunikasikan prioritas inovasi, dan
menghadirkan pembicara inovasi secara teratur.
3) Strategi Inovasi : Strategi inovasi organisasi menguraikan pilihan
manajemen mengenai peluang paling menjanjikan untuk produk baru.
Ini harus mempertimbangkan kemampuan unik organisasi, teknologi
yang relevan, dan peluang pasar yang sesuai dengan nilai pelanggan
yang baik dengan kemampuan organisasi. Penelitian benchmarking
menunjukkan bahwa strategi inovasi produk baru yang diformulasikan
dan dikomunikasikan dengan baik adalah landasan kinerja produk baru
yang unggul.
4) Komponen Strategi Inovasi yang Sukses : Strategi produk baru yang
sukses mencakup menetapkan tujuan produk baru yang spesifik,
komunikasi peran produk baru dalam mencapai tujuan bisnis,
menentukan fokus strategis perusahaan dalam hal cakupan produk,
 pasar, dan teknologi, serta memasukkan proyek-proyek
transformasional jangka panjang dalam portofolio bersama dengan
proyek inkremental.
5) Pentingnya Strategi Inovasi yang Seimbang : Artikel tentang
keseimbangan inisiatif inovasi membahas pentingnya
mempertimbangkan proyek-proyek inovasi yang mencakup
penelusuran dalam tiga domain pertumbuhan organik: penetrasi pasar
yang lebih dalam, ekspansi ke pasar yang berdekatan, dan eksplorasi di
luar wilayah yang berdekatan, seperti yang ditunjukkan dalam matriks
risiko.

Dalam rangka memahami dan menerapkan konsep-konsep ini,

penting untuk menciptakan budaya inovasi yang mendukung,
mengembangkan strategi inovasi yang sesuai dengan visi dan kemampuan
organisasi, serta menjalankan inisiatif inovasi dengan baik sesuai dengan
rencana strategis yang telah ditetapkan.

b. Developing Effective New Product Planning Processes

Inovasi dicapai melalui proses yang dilakukan oleh organisasi. Studi
pembandingan yang dibahas sebelumnya menemukan bahwa memiliki
proses pengembangan produk baru yang berkualitas tinggi merupakan
landasan terpenting dalam kinerja perencanaan produk baru.
1) Kebutuhan Akan Budaya dan Strategi Inovasi : Menciptakan budaya
yang tepat dan memilih strategi inovasi yang sesuai adalah langkah
penting dalam mencapai inovasi yang sukses. Namun, ini saja tidak
cukup. Inovasi dicapai melalui proses yang diterapkan oleh organisasi.
2) Proses Perencanaan Produk Baru : Pentingnya memiliki proses
pengembangan produk baru berkualitas tinggi yang sudah terpasang
dengan baik adalah fondasi utama untuk kinerja perencanaan produk
baru yang unggul. Proses ini koordinasi banyak keputusan, aktivitas,
dan fungsi yang diperlukan untuk mengidentifikasi dan menggerakkan
ide produk baru menuju keberhasilan komersial.
 3) Langkah-Langkah dalam Proses Perencanaan : Terdapat beberapa
tahap utama dalam proses perencanaan produk baru, yang mencakup
menghasilkan ide produk baru yang berkelanjutan dan menyusun
orang, proses, dan metode untuk mengembangkan ide-ide tersebut
hingga mencapai keberhasilan komersial.
4) Inisiatif Penting dalam Proses Perencanaan : Beberapa inisiatif penting
dalam menerapkan proses perencanaan yang efektif termasuk
mengkoordinasikan aktivitas lintas fungsi, mempercepat
pengembangan produk, mengelola sumber daya dengan baik, dan
menjalankan proses perencanaan untuk pengembangan layanan baru
dan produk fisik.

Dalam rangka mencapai inovasi yang sukses, perusahaan perlu

memiliki proses yang terstruktur dan terkoordinasi untuk mengembangkan
ide produk baru menjadi produk komersial yang memuaskan pelanggan dan
memberikan keunggulan kompetitif.

c. Responsibility for New-Product Planning

Pengembangan produk baru melibatkan berbagai fungsi bisnis
seperti pemasaran, keuangan, operasi, sumber daya manusia, dan penelitian
dan pengembangan (R&D). Oleh karena itu, penting untuk mendorong
interaksi dan koordinasi lintas fungsi dalam proses ini. Beberapa desain
organisasi dapat digunakan untuk mengkoordinasikan interaksi antarfungsi
yang diperlukan dalam pengembangan produk baru yang sukses, termasuk:
 1) Koordinasi oleh Manajer Bisnis Tingkat Tinggi: Seorang manajer bisnis
tingkat tinggi bertanggung jawab untuk mengoordinasikan aktivitas
produk baru.
2) Koordinasi Lintas Fungsi oleh Tim Perencanaan Produk Baru: Tim lintas
fungsi yang bertugas merencanakan produk baru.
3) Pembentukan Tim Proyek Lintas Fungsi: Pembentukan tim tugas proyek
lintas fungsi yang bertanggung jawab atas perencanaan produk baru.
4) Penunjukan Manajer Produk Baru: Manajer produk baru ditunjuk untuk
mengoordinasikan perencanaan di antara departemen-departemen
terkait.
5) Pembentukan Struktur Organisasi Matriks: Membentuk struktur
organisasi matriks untuk mengintegrasikan perencanaan produk baru
dengan fungsi bisnis.
6) Pembentukan Pusat Desain: Membentuk pusat desain yang mirip dengan
tim produk baru, tetapi pusat ini menjadi bagian permanen dari
organisasi.
Meskipun tim lintas fungsi sering dianggap sebagai mekanisme
perencanaan produk baru yang menjanjikan, penelitian menunjukkan bahwa
mereka mungkin lebih cocok untuk merencanakan produk yang benar-benar
baru dan inovatif. Struktur birokratis yang lebih tradisional (seperti manajer
produk baru) mungkin lebih baik dalam merencanakan perpanjangan lini
produk dan perbaikan produk. Namun, struktur tradisional dapat gagal
mengidentifikasi peluang produk baru di luar cakupan perencanaan produk
baru yang ada, dan tidak mengidentifikasi potensi ancaman yang
mengganggu. Sifat dan lingkup proyek produk baru dapat memengaruhi
bagaimana tanggung jawabnya dialokasikan.
3. Idea Generation
Penciptaan ide berkisar dari peningkatan bertahap dari produk yang sudah
ada hingga produk transformasional. Seperti yang telah dibahas sebelumnya,
mendorong komitmen terhadap inovasi di seluruh organisasi merupakan
katalisator penting untuk menghasilkan ide baru.
a. Source of Ideas
Ide-ide produk baru datang dari banyak sumber. Membatasi
pencarian ide hanya pada ide-ide yang dihasilkan oleh kegiatan penelitian
dan pengembangan internal adalah pendekatan yang terlalu sempit untuk
sebagian besar perusahaan. Sumber ide produk baru meliputi laboratorium
R&D, karyawan, pelanggan, pesaing, penemu dari luar, akuisisi, dan
anggota rantai nilai.
1) The search Process
Penting untuk membentuk proses generasi dan evaluasi ide
yang proaktif yang memenuhi kebutuhan perusahaan. Menjawab
pertanyaan-pertanyaan berikut membantu dalam pengembangan
program generasi ide:
(1) Apakah kegiatan pencarian ide harus ditargetkan atau terbuka?
Apakah pencarian ide produk baru harus dibatasi hanya pada ide
yang sesuai dengan strategi produk baru perusahaan?
(2) Seberapa luas dan agresif seharusnya kegiatan pencarian ide
produk baru?
(3) Sumber-sumber khusus mana yang terbaik untuk menghasilkan
aliran ide produk baru yang teratur?
(4) Bagaimana cara mendapatkan ide-ide baru dari pelanggan?
(5) Di mana tanggung jawab pencarian ide produk baru akan
ditempatkan? Bagaimana kegiatan generasi ide produk baru akan
diarahkan dan dikoordinasikan?
(6) Apa potensi ancaman dari teknologi yang mengganggu yang
mungkin lebih memuaskan pelanggan daripada produk kita?
2) Idea Source
Menemukan sumber ide terbaik bergantung pada banyak
faktor, termasuk ukuran dan jenis perusahaan, teknologi yang terlibat,
kebutuhan produk baru, sumber daya, preferensi manajemen, dan
kemampuan organisasi. Manajemen perlu mempertimbangkan faktor-
faktor ini dan mengembangkan strategi proaktif untuk generasi ide
yang akan memenuhi kebutuhan perusahaan. Menciptakan budaya
 inovatif harus mendorong terciptanya ide produk baru. Strategi
inovasi memberikan panduan generasi ide.
Banyak ide produk baru berasal dari pengguna produk dan
layanan. Analisis pengguna terdepan menawarkan potensi besar untuk
pengembangan produk baru. Tujuannya adalah mengidentifikasi
perusahaan dan pengguna produk yang menjadi pelopor aplikasi baru,
dan mempelajari kebutuhan mereka untuk membimbing
pengembangan produk baru dalam pasar produk yang berubah dengan
cepat. Pengguna terdepan mengidentifikasi kesenjangan antara
harapan nilai mereka dan produk yang tersedia, lalu mengejar inisiatif
untuk memenuhi kebutuhan mereka. Menerapkan pendekatan ini
dalam generasi ide membutuhkan inisiatif internal dan eksternal yang
besar. Manfaatnya dapat signifikan bagi kegiatan generasi ide
organisasi. Tujuannya adalah untuk memenuhi kebutuhan pengguna
terdepan, sehingga mempercepat adopsi produk baru oleh perusahaan
lain.
b. Methods of Generating Ideas
Ada beberapa cara untuk mendapatkan ide untuk produk baru.
Biasanya, perusahaan mempertimbangkan beberapa pilihan dalam
menghasilkan ide produk.

1) Search
Memanfaatkan berbagai sumber informasi dapat membantu dalam
mengidentifikasi ide produk baru. Publikasi ide produk baru tersedia dari
perusahaan yang ingin menjual atau melisensikan ide yang tidak ingin
mereka komersialisasi. Informasi tentang teknologi baru dapat
ditemukan melalui layanan pencarian komputer komersial dan
pemerintah. Sumber berita juga bisa memberikan informasi tentang
aktivitas produk baru pesaing. Banyak publikasi perdagangan juga berisi
pengumuman produk baru. Perusahaan perlu mengidentifikasi area
pencarian yang relevan dan menugaskan tanggung jawab pencarian ide
kepada individu atau tim.
2) Marketing Research
Survei terhadap pengguna produk membantu mengidentifikasi
kebutuhan yang dapat dipenuhi oleh produk baru. Kelompok fokus
adalah teknik yang berguna untuk mengidentifikasi dan mengevaluasi
konsep produk baru, dan metode penelitian ini dapat digunakan baik
untuk produk konsumen maupun industri. Kelompok fokus terdiri dari
delapan hingga dua belas orang yang diundang untuk bertemu dengan
moderator berpengalaman untuk mendiskusikan situasi penggunaan
produk. Generasi ide dapat terjadi dalam diskusi kelompok fokus tentang
kebutuhan pengguna untuk situasi penggunaan produk tertentu. Anggota
kelompok diminta untuk mengusulkan ide produk baru. Kemudian, sesi
kelompok fokus dapat digunakan untuk mengevaluasi konsep produk
alternatif yang dimaksudkan untuk memenuhi kebutuhan yang
diidentifikasi dalam sesi awal. Lebih dari satu kelompok fokus dapat
digunakan pada setiap tahap dalam proses ini. Pendekatan penelitian
etnografi juga relevan untuk mencari kebutuhan pelanggan yang belum
terpenuhi.
3) Internal and External Development
Laboratorium penelitian dan pengembangan terus menghasilkan
banyak ide produk baru. Amerika Serikat adalah pengeluar terbesar
untuk penelitian dan pengembangan industri di dunia, dan, kecuali
beberapa negara seperti Jepang dan Korea, sangat sedikit negara yang
mengalokasikan persentase Produk Domestik Bruto yang lebih tinggi
untuk R&D. Biaya R&D yang meningkat mendorong perusahaan-
inovatif untuk menjelajahi cara-cara baru untuk mencocokkan sumber
daya R&D dengan peluang nilai—melalui "inovasi open source," aliansi
strategis, kemitraan, dan pencarian global untuk prospek inovasi yang
menjanjikan.
Ide produk baru dapat berasal dari upaya pengembangan di luar
perusahaan. Sumbernya mencakup para penemu, laboratorium
pemerintah dan swasta, serta perusahaan teknologi tinggi kecil. Aliansi
 strategis antara perusahaan dapat menghasilkan ide produk baru, serta
berbagi tanggung jawab untuk kegiatan lain dalam pengembangan
produk baru.
4) Other Idea-Generation Methods
Insentif dapat berguna untuk mendapatkan ide produk baru dari
karyawan, mitra pemasaran, dan pelanggan. Manajemen juga harus
mewaspadai kemungkinan karyawan meninggalkan perusahaan dan
mengembangkan ide yang menjanjikan di tempat lain. Oleh karena itu,
banyak perusahaan mensyaratkan karyawan untuk menandatangani
perjanjian kerahasiaan. Terakhir, mengakuisisi perusahaan lain adalah
cara untuk memperoleh ide produk baru. Strategi ini mungkin lebih cost-
effective daripada pengembangan internal dan dapat mengurangi waktu
yang diperlukan untuk mengembangkan produk baru secara signifikan.
Generasi ide mengidentifikasi satu atau lebih peluang produk baru yang
disaring dan dievaluasi. Sebelum evaluasi komprehensif, ide tersebut
harus diubah menjadi konsep yang telah didefinisikan, yang menyatakan
apa yang akan dilakukan produk (atribut yang diantisipasi) dan manfaat
yang lebih unggul dibandingkan produk yang tersedia. Konsep produk
menyatakan ide tersebut dalam istilah operasional sehingga dapat
dievaluasi sebagai kandidat potensial untuk pengembangan menjadi
produk baru.
4. Screening, Evaluating, and Business Analysis
Manajemen membutuhkan proses penyaringan dan evaluasi yang akan
mengeliminasi ide-ide yang tidak menjanjikan sesegera mungkin sambil
menjaga risiko penolakan ide yang bagus pada tingkat yang dapat diterima.
Memindahkan terlalu banyak ide melalui terlalu banyak tahap dalam proses
perencanaan produk baru mahal.
a. Screening
Sebuah ide produk baru menerima penyaringan awal untuk
menentukan kesesuaian strategisnya dalam perusahaan atau unit bisnis. Dua
pertanyaan perlu dijawab: (1) apakah ide tersebut sesuai dengan misi dan
tujuan organisasi; dan (2) apakah inisiatif produk tersebut secara komersial
 layak? Kesesuaian ide tersebut mempertimbangkan faktor-faktor seperti
kemampuan internal (misalnya, pengembangan, produksi, dan pemasaran),
kebutuhan keuangan, dan faktor-faktor persaingan. Kelayakan komersial
mempertimbangkan daya tarik pasar, kelayakan teknis, daya tarik
keuangan, serta masalah sosial dan lingkungan. Jumlah ide yang dihasilkan
oleh sebuah organisasi kemungkinan akan memengaruhi pendekatan yang
digunakan dalam penyaringan ide-ide tersebut. Sejumlah besar ide
memerlukan proses penyaringan formal.
b. Evaluasi
Batasan antara penyaringan ide, evaluasi konsep, dan analisis bisnis
seringkali tidak jelas. Tahap-tahap evaluasi ini dapat digabungkan, terutama
ketika hanya sedikit ide yang terlibat. Setelah menyelesaikan penyaringan
awal, setiap ide yang lolos menjadi konsep produk baru dan menerima
evaluasi yang lebih komprehensif. Beberapa faktor yang sama yang
digunakan dalam penyaringan dapat dievaluasi dengan lebih mendalam,
termasuk reaksi pembeli terhadap konsep yang diusulkan. Sebuah tim yang
mewakili berbagai fungsi bisnis sebaiknya berpartisipasi dalam evaluasi
konsep.
c. Busniness Analyst
Analisis bisnis mengevaluasi kelayakan komersial dari konsep
produk baru. Untuk mendapatkan proyeksi keuangan yang akurat,
bergantung pada kualitas perkiraan pendapatan dan biaya. Analisis bisnis
biasanya dilakukan pada beberapa tahap dalam proses perencanaan produk
baru, dimulai pada tahap analisis bisnis sebelum konsep produk bergerak ke
tahap pengembangan. Proyeksi keuangan kemudian diperinci pada tahap-
tahap berikutnya.
5. Pengembangan Produk dan Proses
Setelah menyelesaikan analisis bisnis, manajemen harus memutuskan untuk
memulai pengembangan produk atau membatalkan proyek. Selama tahap
pengembangan, konsep dapat diubah menjadi satu atau beberapa prototipe.
Prototipe adalah produk yang sebenarnya, tetapi mungkin diproduksi secara
 khusus dan bukan dengan proses manufaktur yang sudah mapan. Pengujian
penggunaan produk dapat terjadi selama tahap pengembangan.
Proses Pengembangan Produk
Pengembangan produk baru meliputi desain produk, desain industri
(kemudahan penggunaan dan gaya), desain proses (manufaktur), desain
kemasan, dan keputusan untuk membuat atau mengalihdayakan berbagai
komponen produk. Pengembangan biasanya terdiri dari berbagai kegiatan
teknis, tetapi juga membutuhkan interaksi yang berkelanjutan antara fungsi
Litbang, pemasaran, operasi, keuangan, dan hukum. Tingkat kepentingan
relatif dari aktivitas-aktivitas tersebut berbeda menurut produk yang
terlibat. Sebagai contoh, desain produk dan proses sangat penting untuk
produk yang kompleks seperti pesawat komersial besar. Sebaliknya,
perluasan lini produk (misalnya, rasa dan ukuran kemasan baru) produk
makanan tidak memerlukan aktivitas desain yang ekstensif.
Ketika produk baru berupa layanan, ada beberapa kesamaan dalam
proses pengembangan dan juga beberapa perbedaan. Layanan keuangan
baru harus dirancang dan proses dikembangkan untuk membuatnya tersedia
bagi pelanggan. Namun, layanan ini tidak berwujud sehingga desainnya
harus mempertimbangkan hal ini. Apalagi saat ini banyak produk/brand
yang mengkombinasikan antara produk dan jasa.
6. Strategi Pemasaran dan Pengujian Pasar
Mengembangkan strategi pemasaran untuk produk baru berbeda-beda,
tergantung pada apakah produk tersebut merupakan peningkatan tambahan
atau produk baru bagi pasar dan/atau perusahaan. Peningkatan produk
tambahan mungkin hanya memerlukan strategi promosi yang direvisi untuk
menyampaikan informasi kepada pembeli sasaran tentang manfaat yang
ditawarkan oleh produk yang ditingkatkan.
a. Keputusan Strategi Pemasaran
Perencanaan strategi pemasaran dimulai pada tahap evaluasi konsep
dan berlanjut selama pengembangan produk. Kegiatan seperti pengemasan,
pemilihan nama, pertimbangan lingkungan, informasi produk, warna,
 bahan, dan keamanan produk juga harus diputuskan antara desain, operasi,
dan pemasaran. Selain itu ada pula 2 hal penting, yaitu:
1) Market Targeting
Pemilihan target pasar untuk produk baru mulai dari menawarkan
produk baru kepada target yang sudah ada, hingga mengidentifikasi
kelompok pengguna potensial yang sama sekali baru. Memeriksa
informasi riset pemasaran yang tersedia untuk produk baru dapat
menghasilkan wawasan yang berguna mengenai peluang penargetan.
2) Positioning Strategy
Inti dari strategi ini adalah bagaimana manajemen menginginkan
produk baru diposisikan di mata dan pikiran pembeli yang ditargetkan.
Beberapa keputusan penentuan posisi dibuat selama pengembangan
strategi penentuan posisi. Isu-isu seperti pengemasan, pemilihan nama,
ukuran, dan aspek-aspek lain dari produk harus diputuskan. Strategi
rantai nilai menentukan saluran akses pelanggan yang akan digunakan.
Strategi harga juga perlu dipilih dan strategi periklanan dan promosi
penjualan juga perlu dikembangkan. Pengujian iklan dapat dilakukan
pada tahap ini. Keputusan harus dibuat mengenai penggunaan Internet.
Terakhir, manajemen penjualan harus merancang strategi penjualan
personal termasuk memutuskan penambahan tenaga penjualan dan
pelatihan serta alokasi upaya penjualan untuk produk baru.
b. Pengujian Pasar
Pengujian pasar dapat dipertimbangkan setelah produk
dikembangkan sepenuhnya, dengan asumsi produk tersebut cocok untuk
pengujian pasar. Pengujian pasar mengukur respons pembeli terhadap
produk baru dan mengevaluasi satu atau beberapa strategi pemosisian. Uji
pasar digunakan untuk produk konsumen seperti makanan, minuman, dan
alat bantu kesehatan dan kecantikan. Pengujian pasar juga dapat dilakukan
untuk barang dan layanan bisnis-ke-bisnis. Beberapa metode pengujian
yang tersedia termasuk uji pemasaran simulasi, uji berbasis pemindai, dan
uji konvensional.
1) Simulated Tests
Ciri khas dari pengujian simulasi adalah bahwa pengujian ini
dilakukan dalam lingkungan belanja simulasi dan dapat digunakan
sebagai pengganti atau sebelum pengujian pasar skala penuh. Biasanya,
fasilitas penelitian digunakan untuk memberikan pengalaman belanja
simulasi untuk mendapatkan umpan balik dari para peserta.

2) Scanner Based Test

Pengujian ini dilakukan di lingkungan pasar yang sebenarnya.
Produk uji harus tersedia di setiap kota uji. Sistem BehaviorScan dari
Information Resources Inc. memelopori penggunaan televisi kabel dan
basis data terkomputerisasi untuk melacak produk baru selama
pengujian ini. Sistem ini menggunakan informasi dan tanggapan dari
anggota panel yang direkrut di setiap kota uji.

3) Traditional Test
Metode pengujian pasar ini memperkenalkan produk dalam kondisi
pasar yang sebenarnya di satu atau beberapa kota pengujian. Metode ini
biasanya digunakan untuk produk konsumen yang sering dibeli. Waktu
yang dibutuhkan untuk pengujian berkisar antara satu tahun hingga 18
 bulan atau lebih. Pemasaran uji coba menggunakan program pemasaran
yang lengkap termasuk periklanan dan penjualan personal.
Pengambilan sampel produk sering kali menjadi faktor penting dalam
meluncurkan produk baru di pasar uji. Produk dipasarkan secara
komersial di setiap kota, dan hasil pengujian kemudian diproyeksikan
ke target pasar nasional atau regional.
4) Web-Enabled Tests
Meskipun pengujian ini menawarkan kontrol yang lebih sedikit
dibandingkan pengujian lainnya, pengujian ini semakin banyak
digunakan karena kecepatan dan biaya yang relatif rendah.
5) Testing Industrial Products
Pengujian pasar dapat digunakan untuk produk industri. Pemilihan
lokasi pengujian mungkin perlu diperluas melampaui satu atau dua kota
untuk mencakup cakupan pasar yang memadai. Misalnya, suatu
wilayah di suatu negara dapat digunakan untuk pengujian. Perusahaan
penguji memiliki kendali substansial atas pengujian produk industri
melalui penggunaan surat langsung, internet, dan penjualan pribadi.
6) Selecting Test Sites
Lokasi pengujian untuk produk konsumen harus menunjukkan
karakteristik pembeli dan lingkungan dari target pasar yang dituju.
Kriteria berikut ini sering digunakan untuk mengevaluasi lokasi
pengujian potensial untuk produk konsumen.
1. Representasi ukuran populasi.
2. Pendapatan per kapita yang khas.
3. Kebiasaan pembelian yang khas.
4. Stabilitas penjualan sepanjang tahun.
5. Isolasi relatif dari kota-kota lain.
6. Tidak mudah terganggu oleh pesaing.
7. Khas outlet distribusi yang terencana.
8. Ketersediaan pengecer yang akan bekerja sama.
9. Ketersediaan media yang akan bekerja sama.
10. Tersedianya perusahaan jasa riset dan audit.
 7) External Influences
Faktor eksternal adalah salah satu yang paling merepotkan yang
dapat memengaruhi hasil pasar uji adalah pesaing yang tidak bersaing
secara normal. Pesaing dapat mencoba untuk membuat hasil pasar uji
menjadi tidak sesuai dengan meningkatkan atau mengurangi upaya
pemasaran mereka dan membuat perubahan lain dalam tindakan
pemasaran mereka. Penting juga untuk memantau lingkungan pasar uji
coba untuk mengidentifikasi pengaruh tidak biasa lainnya seperti
perubahan besar dalam kondisi ekonomi.
7. Commercialization
Memperkenalkan produk baru ke pasar membutuhkan finalisasi rencana
pemasaran, mengoordinasikan aktivitas masuk pasar di seluruh fungsi bisnis,
mengimplementasikan strategi pemasaran, serta memantau dan mengendalikan
peluncuran produk.
1) The Marketing Plan
Pengenalan pasar membutuhkan strategi pemasaran lengkap yang
dijabarkan dalam rencana pemasaran. Rencana tersebut harus
dikoordinasikan dengan orang-orang dan fungsi bisnis yang bertanggung
jawab atas pengenalan, termasuk tenaga penjualan, manajer penjualan dan
pemasaran, serta manajer dari bidang fungsional lainnya seperti operasi,
distribusi, keuangan, dan sumber daya manusia. Tanggung jawab untuk
peluncuran produk baru biasanya diberikan kepada manajer pemasaran atau
produk. Sebagai alternatif, perusahaan dapat memberikan tanggung jawab
kepada tim perencanaan produk dan tim pengenalan pasar.
2) Monitoring and Control
Pelacakan kinerja produk baru secara real-time pada tahap
memasuki pasar sangatlah penting. Layanan informasi standar (misalnya,
Information Resources Inc.) tersedia untuk memantau penjualan produk
seperti makanan, alat bantu kesehatan dan kecantikan, dan obat resep.
Informasi untuk layanan ini dikumpulkan melalui audit toko, buku harian
konsumen panel, dan layanan pemindai. Studi pelacakan khusus mungkin
diperlukan untuk produk yang tidak termasuk dalam layanan informasi
standar. Internet dengan cepat menjadi sebuah pengumpulan informasi
produk baru yang penting dan kemampuan pemantauan. Kegiatan-kegiatan
ini termasuk komunitas online pribadi dan panel penelitian yang
memberikan umpan balik dari pembeli kepada perusahaan.
 Review Article 1
New Product Innovations in Times Of Crisis: How Did Women
Entrepreneurs Survive The COVID-19 Crisis?
Inovasi Produk Baru Di Masa Krisis: Bagaimana Pengusaha Perempuan
Bertahan di Tengah Krisis COVID-19?
Gurjeet Kaur Sahia, Pratik Modib, Stanzin Mantok

Literature Review
Studi ini meneliti perbedaan sumber daya yang digunakan oleh women
entrepreneurs di perusahaan industri dan konsumen yang memungkinkan mereka
untuk memperkenalkan inovasi produk baru selama pandemi. Kami mensurvei 388
women entrepreneurs, 243 di antaranya mengelola perusahaan industri dan 145
menjalankan perusahaan konsumen, setelah pencabutan lockdown COVID-19 di
India.
Penelitian ini menggunakan Broaden-and-Build Theory (BBT) yang
menjelaskan bagaimana women entrepreneurs memanfaatkan sumber daya sosio-
psikologis mereka untuk memperluas kognisi mereka dalam mengatasi emosi
negatif, menjadi lebih konstruktif, dan bertahan dalam menghadapi kesulitan.
Secara keseluruhan, tinjauan literatur dalam dokumen tersebut memberikan
gambaran menyeluruh tentang penelitian yang ada tentang topik kewirausahaan,
ketangguhan, jaringan, dan inovasi, serta menjadi dasar bagi penelitian yang
dilakukan dalam dokumen tersebut.
Metodologi Penelitian
Metode penelitian yang digunakan dalam studi ini adalah analisis regresi
hierarkis ganda. Peneliti menjalankan 12 model regresi terpisah untuk perusahaan
konsumen dan perusahaan industri. Model-model ini mencakup konstruk utama,
interaksi dua arah dan tiga arah, serta variabel kontrol untuk mendapatkan efek
bersih terhadap inovasi produk baru. Hipotesis H1a dan H1b mendapat dukungan
empiris dalam data. Begitu pula pada Hipotesis H2a, H2b dan H3 menunjukan
bahwa interaksi variabel memiliki hasil yang baik dan berdampak secara signifikan.
Penelitian ini didasarkan pada Broaden-and-Build Theory (BBT), yang
menyatakan bahwa emosi dan pikiran positif dapat membantu individu mengatasi
kesulitan dan mengembangkan sumber daya untuk pertumbuhan. Peneliti juga
menyatakan bahwa orientasi kewirausahaan (EO) memiliki efek positif pada
inovasi. Berdasarkan informasi tersebut, dapat disimpulkan bahwa hipotesis dalam
penelitian ini berkaitan dengan dampak emosi positif, orientasi kewirausahaan, dan
jaringan terhadap inovasi produk baru selama krisis. Namun, hipotesis yang
spesifik tidak disediakan dalam dokumen yang diberikan.
Hasil Analisis
Penelitian ini menggunakan data lintas-seksi yang dikumpulkan dari UKM
yang dimiliki dan dikelola oleh pengusaha perempuan di India setelah krisis
pandemi COVID-19. Penelitian ini menggunakan analisis regresi hierarkis ganda
untuk menguji hipotesis-hipotesisnya. Hasil penelitian menunjukkan bahwa
orientasi kewirausahaan, jaringan, dan ketahanan berpengaruh positif terhadap
inovasi produk baru. Selain itu, jaringan juga memperkuat hubungan antara
orientasi kewirausahaan dan inovasi produk baru. Namun, hasil penelitian ini
memiliki batasan dalam hal generalisasi dan desain penelitian lintas-seksi.
Summary
Penelitian ini membahas dampak dari orientasi kewirausahaan, jaringan,
dan ketahanan terhadap kemampuan wirausaha perempuan di India dalam
memperkenalkan inovasi produk baru selama masa krisis, khususnya pandemi
COVID-19. Studi ini mengumpulkan data dari 388 pengusaha perempuan dan
menganalisis hubungan antara faktor-faktor ini dan inovasi produk baru. Dokumen
ini memberikan wawasan tentang tantangan-tantangan yang dihadapi oleh para
pengusaha perempuan dan strategi yang dapat mereka terapkan untuk mengatasinya
dan mendorong inovasi dalam bisnis mereka.
Poin-poin penting:
• Dokumen ini berfokus pada peran orientasi kewirausahaan, jaringan, dan
ketahanan dalam mendorong inovasi produk baru di antara para pengusaha
perempuan di India selama krisis COVID-19.
• Penelitian ini mengumpulkan data dari 388 pengusaha perempuan dan
menganalisis hubungan antara faktor-faktor ini dan inovasi produk baru.
• Temuan ini menunjukkan bahwa pengusaha perempuan dapat
memanfaatkan sumber daya sosio-psikologis mereka, seperti jaringan dan
ketahanan, untuk memperkenalkan inovasi produk baru yang menjadi
 fondasi bagi pertumbuhan bisnis mereka di masa depan dalam menghadapi
kesulitan.
• Dokumen ini menyoroti pentingnya emosi positif, kemampuan kognitif, dan
modal sosial dan psikologis dalam kelangsungan hidup jangka panjang dan
keberlanjutan UKM milik perempuan.
• Penelitian ini mengakui keterbatasannya dan menyarankan peluang
penelitian di masa depan, termasuk membandingkan temuan dengan
penelitian di negara maju dan mengeksplorasi kinerja inovasi produk baru
dalam jangka panjang.
 Review Article 2
The Effectiveness Of Strategic Alignment Between Open Innovation and
Generic Strategies: Empirical Evidence From Restaurant Smes In Vietnam.
Efektivitas Penyelarasan Strategis Antara Inovasi Terbuka dan Strategi
Generik: Bukti Empiris Dari UKM Restoran di Vietnam.
Quang-Huy Ngo

Literature Review
Penelitian ini membahas tentang inovasi terbuka (open innovation) dan
pengaruhnya terhadap kinerja bisnis restoran di Vietnam. Penelitian ini penting
karena jumlah studi inovasi terbuka di wilayah Asia masih terbatas, dan beberapa
negara memiliki pemahaman yang terbatas. Penelitian ini juga memberikan
kontribusi pada literatur dengan mengungkapkan konsekuensi dari adopsi inovasi.
Temuan ini menyoroti inovasi terbuka dengan menggunakan pendekatan kuantitatif
untuk menguji efek tidak langsung dari inovasi terbuka terhadap kinerja dalam
konteks restoran yang beroperasi di Vietnam.
Inovasi terbuka terdiri dari tiga jenis aktivitas: outside-in (dari luar ke
dalam), inside-out (dari dalam ke luar), dan coupled (terkait). Penelitian ini
mengoperasionalisasikan inovasi terbuka sebagai konstruk reflektif-reflektif orde
kedua yang terdiri dari tiga dimensi dasar: outside-in, inside-out, dan coupled.
Jurnal ini membahas tentang inovasi terbuka (open innovation), strategi
generik (generic strategies), dan kinerja bisnis (business performance) dalam
konteks restoran di Vietnam. Penelitian ini menggunakan pendekatan kuantitatif
untuk menguji pengaruh inovasi terbuka dan strategi generik terhadap kinerja
bisnis. Hasil penelitian ini memberikan kontribusi pada literatur manajemen
strategis dengan mengevaluasi efek mediasi dari strategi generik. Metode
Penelitian
Metode penelitian yang digunakan dalam jurnal ini adalah survei berbasis
internet. Metode ini memiliki beberapa keunggulan, termasuk periode
pengumpulan data yang lebih singkat dan implementasi yang lebih sederhana.
Namun, metode ini juga rentan terhadap tingkat respons yang rendah. Untuk
mengatasi bias non-respons, penelitian ini juga melakukan tes untuk menilai bias
ini. Selain itu, penelitian ini juga menggunakan analisis PLS-SEM untuk
mengevaluasi ukuran sampel yang digunakan.
Hasil Analisis
Hasil analisis pada penelitian ini menunjukkan bahwa strategi diferensiasi
dan strategi biaya memediasi hubungan antara inovasi terbuka dan kinerja bisnis
restoran SME di Vietnam. Temuan ini menunjukkan bahwa implementasi inovasi
terbuka dapat berdampak positif pada kinerja bisnis restoran SME melalui
penggunaan strategi diferensiasi dan strategi biaya. Namun, penelitian ini memiliki
beberapa keterbatasan, seperti pemilihan sektor yang terbatas pada restoran kasual
dan karakteristik demografis sampel yang terbatas pada restoran Vietnam. Oleh
karena itu, penelitian mendatang dapat melibatkan populasi dari negara lain dan
menggunakan metode pengukuran kinerja yang lebih objektif.
Summary
Jurnal ini merupakan makalah penelitian yang berfokus pada topik inovasi
terbuka, strategi generik, dan kinerja bisnis dalam konteks restoran yang beroperasi
di Vietnam. Makalah ini membahas metode pengukuran yang digunakan dalam
penelitian, seperti survei dan skala Likert, serta memberikan penjelasan mengenai
konsep dan model yang terkait dengan inovasi terbuka dan strategi generik.
Makalah ini juga menyoroti kontribusi penelitian terhadap literatur dan
menguraikan struktur makalah. Tujuan dari penelitian ini, yang berpijak pada teori
kontingensi, adalah untuk menilai efektivitas penyelarasan strategis antara inovasi
terbuka, kepemimpinan biaya, dan strategi diferensiasi. Dengan menggunakan
kerangka kerja analitis dari teori kontinjensi, penelitian ini mengasumsikan bahwa
dua strategi generik, seperti kepemimpinan biaya dan strategi diferensiasi,
memediasi hubungan antara inovasi terbuka dan kinerja bisnis UKM restoran yang
beroperasi di Vietnam. Data diperoleh dari 268 UKM restoran di Vietnam. Menurut
temuannya, kedua strategi ini sepenuhnya memediasi hubungan antara inovasi
terbuka dan kinerja bisnis.
Poin-poin penting:
• Penelitian ini meneliti efek tidak langsung dari inovasi terbuka terhadap
kinerja di restoran Vietnam.
• Inovasi terbuka dikonseptualisasikan sebagai konstruk tingkat tinggi
dengan tiga dimensi: aktivitas luar-dalam, dalam-ke luar, dan aktivitas
gabungan.
• Penelitian ini menggunakan dua skala unidimensi untuk mengukur
kepemimpinan biaya dan strategi diferensiasi yang dikejar oleh UKM
restoran.
• Metode pengumpulan data melibatkan survei berbasis internet yang dikirim
ke UKM Vietnam, yang menghasilkan tingkat pengembalian sebesar
13,4%.
• Makalah ini bertujuan untuk memberikan kontribusi pada literatur dengan
memeriksa efek mediasi strategi dan hubungan antara strategi generik dan
kinerja di Vietnam.
 Industrial Marketing Management 111 (2023) 19–29

Contents lists available at ScienceDirect

Industrial Marketing Management

journal homepage: www.elsevier.com/locate/indmarman

New product innovations in times of crisis: How did women entrepreneurs

survive the COVID-19 crisis?
Gurjeet Kaur Sahi a, 1, Pratik Modi b, 1, *, Stanzin Mantok c, 1
a
Department of Commerce, University of Jammu, Jammu & Kashmir, 180006, India
b
Institute of Rural Management Anand, Gujarat 388001, India
c
Department of Commerce, University of Ladakh, Leh 194101, India

A R T I C L E I N F O A B S T R A C T

Keywords: To prevent the COVID-19 virus from further spreading, several governments worldwide imposed strict mobility
Resilience and activity restrictions, including a lockdown of all economic activities. These restrictions affected industrial
Networking businesses more than consumer businesses, who were allowed early relaxations from the pandemic restrictions.
New product innovations
Women entrepreneurs (WEs) managing these businesses responded by introducing new product innovations that
Entrepreneurial orientation
Women entrepreneurs
helped them survive the crisis and build a foundation for future growth. However, the resources used by WEs to
Economic crisis introduce new product innovations differed across consumer and industrial businesses. In this study, we examine
the difference in resources used by WEs across industrial versus consumer firms that enabled them to introduce
new product innovations during the pandemic lockdown. We surveyed 388 WEs, 243 of them managing in­
dustrial firms and 145 running consumer firms, in the immediate aftermath of the lifting of the COVID-19
lockdown in India. Our analysis finds that WEs leveraged their socio-psychological resources, such as
networking, resilience, and entrepreneurial orientation, to innovate new products during the crisis. Specifically,
resilience helped industrial firms, and networking helped consumer firms introduce new product innovations
during the COVID-19 crisis. The interplay of resilience, networking, and entrepreneurial orientation helped both
industrial and consumer firms introduce new products.

1. Introduction
The COVID-19 outbreak started in December 2019 and quickly
spread worldwide to become a pandemic, overwhelming the health
infrastructure in most countries. Several countries responded by
imposing mobility and activity restrictions and locking the economy to
arrest the contagion. The prolonged lockdown and disruption of supply
chains adversely affected the economy’s health, the disproportionate
brunt of which fell on the millions of small and medium enterprises
(SMEs) and women entrepreneurs (WEs) in particular (UN Women,
2020). These WEs faced severe financial distress as their revenue
declined significantly (Chawla, Sahni, & Sadhwani, 2020). Furthermore,
the pandemic lockdown disproportionately affected industrial firms
more than consumer firms, who were given several exemptions to
ensure supplies of consumer essentials. Thus, it was a double whammy
for WEs running industrial firms.
Ownership of businesses among Indian women is paltry at 13.76% as
per the sixth economic census of the Government of India (2016). Some
argue that women are better risk-takers and enjoy their work more than
male colleagues (Chauhan, 2016). However, they are less likely to
receive funding than companies formed by men (Alsos, Isaksen, &
Ljunggren, 2006). Studies report that WEs are more vulnerable to crises,
face more significant hardships, and their businesses suffer negatively
from an economic crisis (Koltai, Geambasu, Bakacsi-Saffer, Barna-Pet­
rooczi, & Zsaar, 2020; Manolova, Brush, Edelman, & Elam, 2020; SME
Competitiveness Outlook, 2020). Unfavorable social norms pose a key
challenge to WEs and their business prospects (Narasimhan & Vijay,
2021). Nevertheless, their propensity for innovation helps business
sustainability and brings value to the marketplace (Gundry, Kickul,
Iakovleva, & Carsrud, 2014).
Our research posits that WEs responded to the crisis by leveraging
their socio-psychological resources to introduce new product in­
novations (NPIs). They used these resources to cope with the unprece­
dented disruption and re-orient their businesses to launch new products

* Corresponding author.
E-mail address: pratik@irma.ac.in (P. Modi).
1
All authors contributed equally; the authorship order is listed alphabetically by the first names.

https://doi.org/10.1016/j.indmarman.2023.03.004
Received 30 October 2021; Received in revised form 6 March 2023; Accepted 7 March 2023
Available online 16 March 2023
0019-8501/© 2023 Elsevier Inc. All rights reserved.
G.K. Sahi et al.
during the crisis (Chawla et al., 2020). However, we do not know (a)
what these resources were that helped them thrive in the crisis and (b)
whether these were differentially useful for industrial versus consumer
firms during the crisis. Our study answers these two questions. We hy­
pothesize that during the COVID-19 crisis, the psychological resource of
resilience helped WEs keep faith in their work to bounce back from the
crisis. Networking provided access to valuable business information
through their social network. These resources enabled them to exploit
the entrepreneurial orientation to quickly adapt to the evolving situa­
tion and tap into new opportunities by introducing new offerings that
catered to new consumption behavior or emerging needs of industries
during the pandemic.
Though it may appear paradoxical, successful entrepreneurship often
transpires in resource-poor, adverse, and disruptive environments
(Mahadea & Khumalo, 2020; Renko, Bullough, & Saeed, 2021). There is
a paucity of research examining entrepreneurs from developing coun­
tries managing adverse environmental conditions (Renko et al., 2021).
More research is required to understand factors helping them to survive
and even thrive during a crisis, and how they vary across industrial and
consumer firm contexts. Chadwick and Raver (2020) identify that future
research should focus on psychological resources to analyze how they
engender entrepreneurial cognition and action. Grounded in positive
psychology, our study views resilience as a psychological resource that
enables an entrepreneur to remain optimistic in accepting challenges
and leveraging the opportunities to move further. It helps an entrepre­
neur explore, configure, and utilize the available resources by recog­
nizing crises as opportunities to grow further by becoming more creative
and innovative (Amir & Standen, 2019). Entrepreneurs are more suc­
cessful if they are resilient during a crisis (Davidsson & Gordon, 2016;
Jenkins, Wiklund, & Brundin, 2014). They can become more resilient
through increased locus of control (Bulmash, 2016) and confidence
(Hayward, Forster, Sarasvathy, & Fredrickson, 2010). Our study argues
that resilient WEs are more likely to stay hopeful about their business as
resilience motivates them to broaden their cognitive appraisals of
stressors and rebuild their business to respond to adverse circumstances
like the pandemic lockdown. We examine the relative importance of
resilience for industrial versus consumer firms in the context of the
crisis.
An entrepreneur’s struggle to survive the pandemic crisis could be
traumatic. Tedeschi and Calhoun (2004) argue that this struggle para­
doxically could lead to positive changes, paving the way for a post-
traumatic growth of a resilient entrepreneur. However, social connec­
tions and networks can help during the struggle by offering new per­
spectives that can be woven into schema change. Networking could
provide valuable business information that supports innovations and
reduces barriers faced by WEs (Nair, 2020). Bullough and Renko (2017)
find that in-group network relationships support WEs in business
development. Our study empirically examines the relative role of
networking in producing NPIs during a crisis for industrial versus con­
sumer firms.
Studies examining the role of an entrepreneur’s socio-psychological
resources in fostering NPIs are rare in the extant literature (Conz &
Magnani, 2020). No prior study explains the relative importance of these
resources for WEs running industrial versus consumer firms. Our study
contributes by showing that WEs leveraged their socio-psychological
resources to innovate new products during the pandemic, which hel­
ped them survive the crisis and build a foundation for future growth. The
study also finds that resilience was more beneficial for industrial firms to
introduce NPIs, whereas networking helped consumer firms more.
The rest of the paper is organized as follows. In the next section, we
provide a theoretical framework to develop hypotheses. Following that,
we explain our research method and data analysis strategy. Subse­
quently, we document the results and findings. Finally, we discuss the
theoretical and managerial implications of the research in the last
section.
20
Industrial Marketing Management 111 (2023) 19–29
2. Theoretical framework and hypotheses development
Our research uses the Broaden-and-Build Theory (BBT), which posits
that when individuals experience positive emotions, their cognitive
abilities for initiating an action get broadened, enabling them to build
resources and capabilities to grow, survive, and thrive (Fredrickson,
1998, 2001). It considers positive emotions and thoughts – such as
passion, exploration, happiness, gratitude, pride, contentment, etc., −
instrumental in overcoming adversity. Positive emotions broaden an
individual’s thoughts and behaviors such that they become more flexible
and efficient in taking up higher initiatives (Fredrickson & Levenson,
1998; Tugade, Fredrickson, & Feldman Barrett, 2004). As these in­
dividuals broaden their cognitive perspective, their repertoires of coping
and growing strategies are expanded, bringing them to a better position
to follow more adaptive and proactive ways of building and leveraging
resources (Garland et al., 2010; Lin et al., 2016). In the context of our
research, the BBT explains how WEs draw from their repertoire of socio-
psychological resources to broaden their cognitions to overcome nega­
tive emotions, become more constructive, and persevere in the face of
adversity. It explains how an entrepreneur’s resilience during a crisis
can influence her thought-action repertoires to withstand such situa­
tions and even find opportunities to grow (Chadwick & Raver, 2020;
Meneghel, Salanova, & Martínez, 2016; Sommer, Howell, & Hadley,
2016).
We use the social network approach to explore how networking as­
sists entrepreneurs in surviving a crisis (Stuart & Sorenson, 2005). Social
networks connect an entrepreneur to external resource providers who
are critical for sustaining a firm (Hansen, 1995). They act as conduits for
private information access, which determines the identification of new
business prospects and entrepreneurial opportunities (Hoang & Anton­
cic, 2003). Social networks are used right from the formation to the
growth of entrepreneurial firms. WEs are known to use their social
network more than men (Greve & Salaff, 2003). Exploiting the
embedded resources requires an entrepreneur to interact and work with
the network partners (Lin, 2017). A high degree of networking helps
gain access to the peers’ complementary resources and broaden the
existing strategic assets pool (Sheng, Zhou, & Li, 2011), which ulti­
mately helps search for new entrepreneurial opportunities (Luo, 2003).
The spatiality of an entrepreneur in a network and her structural
embeddedness significantly impact the performance outcomes (Basole,
Ghosh, & Hora, 2018). Apart from the structural embeddedness, the
relational embeddedness, i.e., the quality of the relationship that an
entrepreneur in a network shares with others, also influences the per­
formance outcomes. Establishing strong ties through trust and closeness
serves as a foundation of a conducive environment, facilitating the
transfer of strategically important knowledge within the network (Uzzi,
1996). In contrast, weak ties provide useful non-redundant information
contributing to project outcomes (Levin & Cross, 2004). Networking
with strong ties helps exploit the local information that flows in the
closed networks, and networking with weak ties helps explore new op­
portunities with the help of information that does not reside in the
closed cliques. Together, networking provides both exploitative and
explorative business opportunities.
2.1. Hypotheses development
Entrepreneurial orientation is a proactive, competitive, innovative,
and risk-taking disposition (Lumpkin & Dess, 1996). It allows risk-
taking, experimentation, and preparedness to change in the face of
changing external environment. Entrepreneurial orientation also re­
quires complementary internal behaviors to support performance
(Dayan, Ng, Husain, & Zacca, 2022). The extant literature documents a
positive effect of entrepreneurial orientation on innovations (e.g.,
Arzubiaga, Kotlar, De Massis, Maseda, & Iturralde, 2018; Perez-Luno,
Wiklund, & Cabrera, 2011). Empirical evidence shows that EO signifi­
cantly impacts the ability to adapt to changes in the external
G.K. Sahi et al.
environment by producing new product innovations (e.g., Alegre &
Chiva, 2013; Freixanet, Rialp, & Churakova, 2020; Hong, Song, & Yoo,
2013). Notably, the dimensions of entrepreneurial orientation – inno­
vativeness and proactiveness – account for the same (Zhou, Barnes, &
Lu, 2010). Arunachalam, Ramaswami, Herrmann, and Walker (2018)
explain that EO delivers greater success in generating NPIs, as innova­
tiveness ensures the intent, proactiveness provides the direction, and
risk-taking generates the will to explore unexplored areas.
Previous studies confirm the relevance of networks for entrepre­
neurial success (e.g., Aldrich & Dubini, 1991; Greve & Salaff, 2003).
Networking helps entrepreneurs identify business opportunities and
respond quickly by innovating (Leenders & Dolfsma, 2016). It provides
access to resources that otherwise are not available to an entrepreneur.
Several studies report an association between EO and networking (e.g.,
Aarikka-Stenroos & Sandberg, 2012; Jiang, Chai, Shao, & Feng, 2018).
In this regard, Baker, Grinstein, and Harmancioglu (2016) argue that a
firm’s ability to utilize market knowledge, ideas, and other resources
gained from networking facilitates building an entrepreneurial culture
that aims for successful innovations. It also helps risk-averse firms
enhance innovation outcomes (Baker et al., 2016). Networking with
external actors often strengthens new product innovations as it helps a
firm overcome resource constraints, provides access to complementary
assets, and offers better value to customers (Jiang et al., 2018; Man­
cinelli & Mazzanti, 2009). Thus, networking helps entrepreneurs ac­
quire and integrate knowledge from external partners that ultimately
facilitates the development of new products or the modification of
existing products.
Integrating the literature on EO and networking, we hypothesize that
networking enables EO to drive new product innovations during a crisis.
However, the fact is that even during the initial phase of the pandemic
lockdown, businesses manufacturing consumer goods were given
exemption due to their importance in ensuring essential supplies such as
groceries, medicines, and food products. In comparison, businesses
manufacturing industrial goods remained closed and were only gradu­
ally permitted to operate from the subsequent phases of the lockdown.
As a result, entrepreneurs running industrial goods businesses faced
more significant uncertainty and disruption, requiring greater resilience
to cope with the crisis. In comparison, entrepreneurs running consumer
goods businesses had to ensure the smooth functioning of their business
operations and focus on capitalizing on any market opportunity arising
out of the changed scenario during the crisis. Networking helped WEs
managing consumer firms (a) acquire the necessary resources to keep
the operations running and (b) exploit new business opportunities by
introducing NPIs during the crisis. In contrast, the industrial businesses
remained closed without any opportunity to leverage networking until
the lockdown was lifted several months afterward, which required
greater resilience to cope with the crisis. Hence, we propose that the
moderation effect of networking on the EO and NPIs relationship is
stronger for businesses manufacturing consumer goods than industrial
products.
H1a. The impact of entrepreneurial orientation on new product in­
novations is moderated by networking during a crisis such that this ef­
fect is stronger for consumer goods businesses.
H1b. The impact of entrepreneurial orientation on new product in­
novations is moderated by networking during a crisis such that this ef­
fect is weaker for industrial goods businesses.
Korber and McNaughton (2017) view resilience as a process of
adaptation, transformation, and recovery following a failure at an
entrepreneur, firm, region, or community level. For this research
context, we view resilience as an entrepreneur’s ability to adapt and
recoup in the pursuit of growth during a crisis (Muhamad, Rashid,
Hussain, Akhir, & Ahmat, 2020). Fredrickson, Tugade, Waugh, and
Larkin (2003) use the broaden-and-build theory to argue that positive
emotions activate the broadening, which helps in building a range of
21
Industrial Marketing Management 111 (2023) 19–29
socio-psychological resources such as social resources (e.g., social sup­
port and networking) and psychological resources (e.g., resilience and
optimism). The basic foundation of an individual’s resilience is positive
emotions, which allow them to remain optimistic and hopeful (Fisk &
Dionisi, 2010; Mak, Ng, & Wong, 2011) even when they face challenges
(Chadwick & Raver, 2020). Entrepreneurs who nurture resilience as a
personal resource are likely to broaden their cognitive appraisals such
that stressors are viewed as challenges that can be overcome, build their
business more proactively, and ensure business longevity (Chadwick &
Raver, 2020). Accordingly, resilient individuals are better at coping with
adverse situations as they cognitively appraise stressful events as chal­
lenges they can overcome rather than as threats (Fletcher & Sarkar,
2013; Fredrickson et al., 2003). In this regard, Chadwick and Raver
(2020) find that resilient entrepreneurs have broadened cognition and
proactive building of the business, which ultimately increases the like­
lihood of business survival.
Kuckertz and Brandle (2021) literature review reveals that SMEs are
hit hard by the COVID-19 pandemic. Businesses can be sustained
through adverse conditions only when an entrepreneur does not get
bogged down, is ready to face adversity, and overcome setbacks. This
resilience quality of an entrepreneur (Sutcliffe & Vogus, 2003) allows
her adaptation in the face of adversity (Bonanno, 2004). It enables her to
imagine a future amid difficult business conditions. Thus, resilience is a
highly valued psychological resource an entrepreneur can possess
(Ayala & Manzano, 2014). It helps entrepreneurs start and succeed not
only with the existing but also with multiple ventures as they can foresee
opportunities in crises for future success (Hayward et al., 2010). Hence,
resilience is vital for business success. Resilient entrepreneurs can grow
and learn from adversity and are better positioned to initiate actions
needed to restart and grow a business (Bullough, Renko, & Myatt, 2014).
Such entrepreneurs not only remain optimistic and hopeful (Mak et al.,
2011) but also improvise when faced with challenges (Masten, 2001).
They can better appraise the adverse situation and perceive such events
as challenges for improvement rather than considering them as threats
impeding growth opportunities (Mancini & Bonanno, 2009).
EO ‘can lead to lean and flexible marketing efforts, which are
particularly valuable in times of crisis’ (Donthu & Gustafsson, 2020, p.
287). It helps entrepreneurs to find new business opportunities during a
crisis. In some cases, the crisis-induced resource scarcity provides an
opportunity for what Linnenluecke and McKnight (2017) call disaster
entrepreneurship, which can present new ideas for business exploita­
tion. Entrepreneurs rooted in their local contexts are best suited to meet
the needs of local markets during a crisis (Grube & Storr, 2018). Resil­
ient entrepreneurs are well-equipped to handle the disruptions that ul­
timately predict entrepreneurial success (Ayala & Manzano, 2014).
These entrepreneurs thrive despite various social, cultural, and political
restrictions (Korber & McNaughton, 2017). However, little research
exists examining the interplay of EO, resilience, and new product in­
novations (Richtner & Lofsten, 2014).
We hypothesize that resilience strengthens the impact of EO on new
product innovations during a crisis. WEs running industrial businesses
required greater resilience and courage to rise and bring their businesses
back on track after a prolonged lockdown. The WEs were forced to dig
deep to call on their psychological resilience. In contrast, consumer
businesses faced less severe crisis conditions and disruption of business
operations. Hence, the strength of their resilience was not tested beyond
a limited point. Hence, we postulate that the moderation effect of
resilience on the EO and NPIs relationship is stronger for industrial
businesses than for consumer businesses.
H2a. The impact of entrepreneurial orientation on new product in­
novations is moderated by resilience during a crisis such that this effect
is stronger for industrial goods businesses.
H2b. The impact of entrepreneurial orientation on new product in­
novations is moderated by resilience during a crisis such that this effect
is weaker for consumer goods businesses.
G.K. Sahi et al.
We argue that networking is more critical for WEs running consumer
goods businesses during a crisis, and resilience is more helpful for WEs
running industrial businesses during a crisis. However, developing
resilience and building more robust business networks are mutually
reinforcing. Networking helps maintain entrepreneurial resilience dur­
ing adversity (Linnenluecke, 2017; Naidoo, 2010). The complementarity
of networking and resilience resources are valuable for WEs managing
industrial or consumer goods businesses. Resilience enables firms to
respond to adversity by developing novel or unconventional business
strategies that sustain continuity (Linnenluecke, 2017). Networking
gives WEs valuable inputs, including fresh concepts, know-how, busi­
ness models, and processes to create new goods, services, and proced­
ures that the market will need (Martinez-Perez, García-Villaverde, &
Elche, 2016). Hence, we hypothesize that networking and resilience will
jointly and positively moderate the relationship between EO and NPIs
for consumer and industrial goods businesses. Thus, we expect a three-
way interaction effect of EO, networking, and resilience on new product
innovations.
H3. The impact of entrepreneurial orientation on new product in­
novations is jointly and positively moderated by networking and resil­
ience during a crisis for both industrial and consumer goods businesses.
Fig. 1 below presents the conceptual model of this study.
3. Data collection
The definition of Small and Medium Enterprises under section 7 of
the Micro, Small, and Medium Enterprises (MSME) Development Act
2006 is based on the amount invested in the businesses. For example, the
upper investment limit for a small enterprise is INR 100 million (about
USD 1.3 million at the current rate of INR 75 = USD 1), and that for a
medium enterprise is INR 500 million (about USD 6.7 million). Ac­
cording to an estimate for 2021, there are about 178,000 small and
24,567 medium enterprises in India (MSME, 2021). However, the share
of women’s ownership is meager, at about 7.93% for small and medium
enterprises (Statista, 2021). The MSMEs sector in India contributes
about 29% to the GDP. They are the backbone of the Indian economy,
employing about 120 million people and shaping the country’s inno­
vation landscape (MSME, 2021). According to an IMF analysis, WEs
could boost GDP and lower unemployment, resulting in financial gains
of a 6.8% increase in GDP (Khera, 2019). WEs are increasingly partici­
pating in company growth to improve their quality of life, maintain their
independence, and assist with family responsibilities, particularly when
their male counterparts are unable to do so (Minniti, Arenius, & Lan­
gowitz, 2004; Rindova, Barry, & Ketchen Jr, 2009). They use sophisti­
cated technologies and adopt inclusive policies when creating ventures
(Rosca, Agarwal, & Brem, 2020).
To empirically test our hypotheses, we collected data from women
entrepreneurs who were owner-CEOs running SMEs, manufacturing
Fig. 1. Conceptual model of NPIs during a crisis.
22
Industrial Marketing Management 111 (2023) 19–29
consumer and industrial goods in the industrialized state of Gujarat in
India. We approached the Gujarat Chamber of Commerce and Industry
(GCCI), an industry advocacy body working to create and sustain a
business environment conducive to the industry’s growth in Gujarat.
The women’s wing of GCCI provided us with a list of 524 women en­
trepreneurs having manufacturing businesses. We started making efforts
to personally contact these WEs in October 2020, more than six months
after the COVID-19 lockdown was announced. We collected data
through a paper-based questionnaire survey. The data collection process
lasted for about four months. Despite repeated attempts, 62 WEs could
not be contacted, and 74 enterprises were found to be managed by male
entrepreneurs. These SMEs were dropped them our survey.
Consequently, we were able to get responses from 388 WEs. Our final
response rate was exceptionally high due to (a) our method of in-person
surveys channelized with the help of an industry advocacy body, GCCI,
and (b) the extended COVID-19 lockdown that had created a pent-up
need to socialize and discuss their struggles during the difficult times.
Among our respondent WEs, 39% were between 40 and 49 years of age,
and 38% were between 50 and 59. Further, 64% of women belonged to
nuclear families, while 57% lived in a joint family. In addition, 87% WEs
were married, 50% were graduates, 20% possessed master’s degrees,
and 15% had professional degrees (such as MBA and Chartered Ac­
countant). For further analysis, we bifurcated our respondent enter­
prises into two categories, those managing industrial firms versus
consumer firms. It allows us to develop a nuanced understanding of the
model of new product innovations during a crisis. There were 145
respondent WEs manufacturing consumer goods such as drugs and
pharmaceuticals (13.76%), food products (10.32%), and dairy and al­
lied products (5.16%). Two hundred forty-three respondents were
manufacturing industrial goods such as chemicals, dyes and in­
termediates (22.11%), textile (19.41%), gems and jewelry (15.48%),
house-keeping items (8.11%), rubber foam (3.93%), and plastic ma­
chine and its parts (1.72%).
Our questionnaire contained scale item statements representing the
focal constructs of the study. We discussed the substantive meaning of
all the scale items with the respondents before recording their responses
on a five-point Likert scale, ranging from ‘strongly agree’ to ‘strongly
disagree.’ The nine items representing the three dimensions of the
entrepreneurial orientation construct, i.e., innovativeness, risk-taking,
and proactiveness, were borrowed from the Covin and Slevin (1989)
study of small firms in hostile environments. Networking consists of
three dimensions, i.e., learning potential, market opportunities, and
supply-chain opportunities. The nine items were adopted from Farr-
Wharton and Brunetto (2007). The six items of resilience were borrowed
from Luthans, Youssef, and Avolio (2007). Finally, the seven items
measuring product innovation were adapted from Baker and Sinkula
(1999), Hurley and Hult (1998), and Lukas and Ferrell (2000). We first
pretested the survey instrument with five academics and ten women
entrepreneurs for item improvement and face validity. Next, we piloted
G.K. Sahi et al. Industrial Marketing Management 111 (2023) 19–29

the questionnaire with 20 WEs to ascertain the clarity and appropri­ that the Skewness and Kurtosis values were less than 0.33 and − 0.73,
ateness of all items in the questionnaire. The final questionnaire respectively. Next, we checked the common method variance (CMV) to
comprised various aspects of WEs’ entrepreneurial orientation, know if any bias existed in the dataset. We used two techniques to
networking, resilience, new product innovation, organizational profile, analyze CMV (Podsakoff et al., 2003). First, we employed a confirmatory
business environment characteristics, and respondent demographic factor analysis (CFA) single-factor model, in which all the manifest
variables. We first asked the questions related to the predictor con­ variables of the latent constructs were loaded onto a first-order CFA. The
structs, followed by the questions related to the criterion construct so as result reported a poor model fit (CMIN/df = 9.35; GFI = 0.43; AGFI =
not to artificially inflated the inter-construct correlation (Podsakoff, 0.45; NFI = 0.16; TLI = 0.32; CFI = 0.24; RMSEA = 0.12). Second, we
MacKenzie, Lee, & Podsakoff, 2003). The control variables were iden­ examined the correlation matrix of the latent constructs and found that
tified from previous literature and included in our survey as they could 0.78 was the highest value in the correlation matrix (see Table 2 below),
confound or bias the results (Podsakoff et al., 2003). They include the which is less than the threshold limit of 0.90 (Pavlou, Liang, & Xue,
firm’s age, size, nature of the products manufactured (i.e., durable, non- 2007). These results indicate that the common method variance is not a
durable, or both), whether they marketed products in the domestic serious threat. We provide the reliability statistics and discriminant
versus international markets, ownership of the firm (i.e., inherited or validity evidence in Table 3 below.
own set-up, or acquired) (Rogers, 2004), and aspects of the external
environment facing the firm (i.e., market turbulence, competitive in­ 4.1. Hypothesis testing
tensity, and technological turbulence) (Bodlaj & Cater, 2019). Including
them in the regression model helped us derive a net impact of the To test our hypotheses, we used multiple hierarchical regression
explanatory variables on NPIs. Table 1 profiles the sampled WEs and analysis. We ran 12 regression models each for consumer and industrial
their firms. firms. This categorization is important in the context of the pandemic
crisis since it provided a differentiated external environment to firms
4. Analysis and results manufacturing consumer and industrial goods. We included three pri­
mary constructs, their two-way and three-way interactions, and control
We checked item-wise outliers through box plots. Out of 388 re­ variables in the model to derive the net effect on new product innova­
spondents, we observed 17 extreme outliers, which were truncated from tion. To reduce multicollinearity, we mean-centered the variables before
the data set to reduce their abnormal influence on the results making the multiplying them to obtain the interaction terms (Fairchild & MacK­
usable sample 371. We checked the normality through (a) graphical innon, 2009; Jaccard, Turrisi, & Wan, 1990). We ran separate hierar­
methods using histogram, box plot, Q-Q plot, and (b) numerical method chical regressions for firms manufacturing consumer and industrial
using Skewness and Kurtosis measures (Bai & Ng, 2005). We observed goods to test the hypotheses at a granular level in the context of the
pandemic crisis: Table 4a and 4b report detailed results. Model 6, in the
case of consumer firms (see Table 4a), reveals that networking
Table 1 strengthens the relationship between EO and NPIs (β = 0.686, p = .000).
Profile of sampled firms manufacturing consumer and industrial goods. However, Model 6, in the case of industrial firms (see Table 4b) shows
Variable Classification Consumer Industrial that networking does not moderate the link between EO and NPIs (β =
goods (in %) goods (in %) 0.092, p = .181). Thus, our hypotheses H1a and H1b find empirical
Firm’s age Up to 10 years 17.2 24.4 support in the data. Similarly, Model 6 for consumer firms shows that
11–25 years 68.1 60.0 resilience has no moderating effect on the relationship between EO and
26–40 years 14.7 12.7 NPIs (β = 0.097 p = .322). In contrast, resilience strengthens the link
Above 40 years – 2.9
Firm’s size (No. of Up to 25 19.0 27.3
between EO and NPIs for industrial firms (β = 0.119, p = .048).
employees) 26–50 54.3 51.6 Therefore, H2a and H2b also stand supported. Model 6 further reveals
51–100 26.7 18.4 that the three-way interaction between networking, resilience, and EO
Above 100 – 2.7 significantly impacts NPIs for both consumer (β = 0.592, p = .000) and
Product Description Durable products 37.4 69.7
industrial (β = 0.157, p = .012) firms, supporting hypothesis 3.
Non-Durable products 62.6 30.3
Market for Business Fully domestic market 72.4 58.4
Fully foreign market – 3.3 4.2. Robustness check
Partially domestic & 27.6 38.4
partially foreign We cross-validated the multiple hierarchical regression results using
Formation of Firm Inherited business 14.7 22.3
Set-up by own 85.3 76.3
Hayes macro PROCESS developed by Hayes (2013). The macro PRO­
Acquisition from – 1.5 CESS model number two computes the complex relationships in our
others model, i.e., independent (X), dependent (Y), and two moderator vari­
Investment in the Above 2.5 upto 5 50 50.7 ables (M) and (W). Evaluating these four variables in a model gives
company million
comprehensive information (Fairchild & MacKinnon, 2009). The Hayes
5 to 10 million 33.6 29.2
10 to 20 million 8.6 12.0 PROCESS results for consumer and industrial firms cross-validate the
20 to 50 million 3.4 2.2 multiple hierarchal regressions reported in Table 5a and 5b. For firms
Above 50 million 4.3 5.8 manufacturing consumer goods, networking strengthens the impact of
Age (in years) of WE 28–38 23 17.9 EO on NPIs (β = 0.652, p = .021), while resilience moderates the rela­
40–49 39 47.7
50 above 38 34.4
tionship between EO and NPIs in the case of firms manufacturing in­
Family of WE Nuclear 64 63.9 dustrial goods (β = 0.226, p = .049). The three-way interaction between
Joint 36 36.1 EO, networking, and resilience is also significant in fostering new
Marital Status of Married 87 91.2 product innovations for industrial and consumer firms.
WE Unmarried 13 5.5
Widow – 3.3
Qualification of WE Matriculate/ 15 11.7 5. Conclusion and implications
Secondary
Graduate 50 55.5 The pandemic lockdown in India disrupted the supply chains
Postgraduate 20 23.0 affecting all businesses. However, industrial businesses suffered more
Professional 15 9.8
than consumer businesses as the latter received concessions to operate

23
G.K. Sahi et al. Industrial Marketing Management 111 (2023) 19–29

Table 2
Correlation matrix, mean, and standard deviation.
Variable Mean SD 1 2 3 4 5 6 7 8 9 10 11 12

Firm’s age in years (OD1) 17.73 9.41 –

Nature of product 1.64 0.88 0.43** –
manufactured (OD2)
Firm’s market (OD3) 1.73 0.95 0.02 0.24 –
Firm’s size (OD4) 42.09 26.7 0.142* 0.36 0.32* –
Technological turbulence 1.82 0.47** − 0.13 0.45** 0.22* 0.71*** –
faced by the firm (OD5)
Competitive intensity 1.06 0.24 0.43** 0.73*** 0.60*** 0.46* 0.59 –
faced by the firm (OD6)
Market turbulence faced 1.73 0.53 0.053** 0.06 0.42** 0.54*** 0.46** 0.124 –
by the firm (OD7)
How did the WE come to 1.81 0.41 0.140 0.57*** 0.15 0.14 0.32** 0.41** 0.130 –
own the firm (OD8)
Entrepreneurial 4.11 0.58 0.57*** 0.25* 0.12 0.66*** 0.123* 0.016 0.450** 0.32* –
orientation (EO)
Networking 4.26 0.47 0.65*** 0.78*** 0.14 0.121 0.091 0.023 0.42** 0.45** 0.42** –
Resilience 4.35 0.59 0.58** 0.70** 0.013 0.130 0.690*** 0.103 0.60** 0.15* 0.012 0.153* –
New product innovations 4.24 0.57 0.45** 0.44** 0.19* 0.023 0.128 0.42** 0.081 0.124 0.58** 0.122 0.42** –

Note: SD = Standard deviation; OD1 = Year of the firm’s formal establishment; OD2 = Durable, Non-durable, Both; OD3 = Domestic, Foreign, Both; OD4–
– No. of
employees; OD5 = Low, Moderate, High; OD6 = Low, Moderate, High; OD7 = Low, Moderate, High; OD8 = Inherited, Own set-up, Acquired.
n = 388; * p < .05; ** p < .01; ***p < .00 (2-tailed).

Table 3
Discriminant validity of the focal constructs and average variance extracted.
AVE Entrepreneurial orientation Networking Psychological resilience New product innovations

Entrepreneurial Orientation 0.698 (0.708) 0.029 0.028 0.059

Networking 0.059 0.571 (0.578) 0.048 0.013
Psychological Resilience 0.035 0.065 0.627 (0.574) 0.029
New Product Innovations 0.072 0.022 0.05 0.574
(0.539)
Composite Reliability (Consumer Firms) 0.953 0.921 0.909 0.827
Composite Reliability (Industrial Firms) 0.955 0.924 0.889 0.784

Note: Average variance extracted (AVE) values are on the diagonal. AVE for the industrial goods is in the parenthesis, and that of the consumer goods is un-bracketed.
Squared multiple correlations between the constructs for consumer businesses are reported below the diagonal, and for industrial goods are reported above the
diagonal.

during the lockdown to ensure adequate supplies of consumer goods in
the market. In this research, we sought to understand how women en­
trepreneurs running industrial versus consumer businesses turned the
COVID-19 crisis into a business opportunity and fostered new product
innovations during the strict nationwide lockdown. We examined (a) the
resources used by WEs to introduce product innovations during the crisis
and (b) the differential utility of these resources for industrial versus
consumer firms during the crisis. Our study answers these two questions.
We find that WEs used their socio-psychological resources of resilience
and networking to capitalize on emerging market opportunities by
innovating new products to build a recovery of their SMEs from the
pandemic crisis. As a result, these WEs not only survived the crisis but
built a foundation for the future growth of their firms. Our results show
that networking helped WEs managing consumer firms introduce new
products, whereas resilience helped WEs managing industrial firms
introduce new products during this crisis. However, an interplay of
networking, resilience, and entrepreneurial orientation helped enhance
new product innovations for both consumer and industrial firms.
5.1. Theoretical implications
The study contributes to the scarce literature on the usefulness of
resilience and networking resources for introducing new product in­
novations during crises in the context of industrial versus consumer
firms. Our study makes three significant contributions to the literature.
First, we observe that networking, an essential component of social
capital, helps WEs generate new ideas, knowledge, and resources to
introduce new products. Second, the results reveal that resilience, a
critically important component of psychological capital, is equally vital
for WEs in surviving and thriving through a crisis. Third, irrespective of
the crisis severity being high (as in the case of industrial goods busi­
nesses) or low (as in the case of consumer goods businesses), entrepre­
neurs need to be resilient so that they can integrate resources generated
by networking, which is the key to fostering new product innovations
during tough times.
Extant studies primarily focus on the resilience of organizations
(Zafari, Biggemann, & Garry, 2020) and industries (Remko, 2020). Our
study contributes by examining the resilience of owner-CEOs of indus­
trial firms during the pandemic-induced crisis. The broaden-and-build
theory (Fredrickson, 2001; Fredrickson et al., 2003) postulates the
importance of positive emotions in broadening affective processes and
activating entrepreneurial resilience, serves as the foundation for new
product introductions by industrial firms during a crisis. Resilient en­
trepreneurs of industrial firms adopt a positive approach toward their
daily lives and overcome obstacles (Cooke, Cooper, Bartram, Wang, &
Mei, 2019; Youssef & Luthans, 2007). As a result, they deal with chal­
lenging circumstances like crises in an effective manner. People who
nurture positive emotions believe that a traumatic experience can be a
catalyst for growth and view crises like COVID-19 as an opportunity
than as a threat. For example, Rapaccini, Saccani, Kowalkowski, Paiola,
and Adrodegari (2020) document how certain industrial firms in
northern Italy used servitization and digital transformation to navigate
the COVID-19 lockdown-induced crisis. They identify entrepreneurial
preparedness as a critical element of resilience. Resilient entrepreneurs
are more optimistic, energetic, open to new experiences, and curious to
learn new approaches (Fredrickson et al., 2003). They navigate various
challenges, seek creative options, and believe in their ability to rebound
and grow in adverse environments (Corner, Singh, & Pavlovich, 2017;

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G.K. Sahi et al. Industrial Marketing Management 111 (2023) 19–29

Table 4a
Hierarchical regression: Consumer firms (DV: New product innovations).
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 Model 9 Model 10 Model 11 Model 12

Independent Variable
EO 0.301 – – 0.365 0.322 0.417 0.384 – – 0.354 0.329 0.471
(0.010) (0.001) (0.011) (0.000) (0.000) (0.001) (0.001) (0.000)
Moderators
Networking – 0.061 – 0.072 – 0.081 – 0.152 – 0.124 – 0.018
(0.482) (0.432) (0.424) (0.107) (0.147) (0.913)
Resilience – – 0.126 – 0.074 0.086 – – 0.186 – 0.091 0.074
(0.208) (0.421) (0.345) (0.043) (0.879) (0.406)

Interaction Effects
EO*NW (H1) – – – 0.264 – 0.686 – – – 0.284 – 0.718
(0.011) (0.000) (0.006) (0.000)
EO*RS (H2) – – – – 0.097 0.097 – – – – 0.113 0.094
(0.301) (0.322) (0.227) (0.312)
EO*NW*RS – – – – – 0.592 – – – – – 0.537
(H3) (0.000) (0.001)

Control Variables
OD1 − 0.053 − 0.032 − 0.032 − 0.056 − 0.056 − 0.076 – – – – – –
(0.621) (0.739) (0.707) (0.571) (0.546) (0.372)
OD2 0.201 0.342 0.124 0.143 0.168 0.146 – – – – – –
(0.042) (0.025) (0.097) (0.129) (0.109) (0.202)
OD3 − 0.026 0.041 − 0.003 0.043 0.021 0.007 – – – – – –
(0.761) (0.812) (0.995) (0.856) (0.726) (0.945)
OD4 0.032 0.031 0.045 − 0.041 0.032 − 0.045 – – – – – –
(0.820) (0.797) (0.604) (0.996) (0.701) (0.831)
OD5 − 0.074 − 0.142 − 0.115 − 0.054 − 0.054 0.012 – – – – – –
(0.543) (0.329) (0.421) (0.731) (0.835) (0.901)
OD6 0.143 0.045 0.062 0.092 0.087 0.124 – – – – – –
(0.204) (0.626) (0.537) (0.318) (0.466) (0.164)
OD7 0.052 0.034 0.087 0.032 0.062 0.085 – – – – – –
(0.600) (0.813) (0.457) (0.923) (0.511) (0.386)
OD8 − 0.213 − 0.254 − 189. − 0.193 − 0.175 − 0.259 – – – – – –
(0.030) (0.154) (0.061) (0.057) (0.062) (0.008)
F-Value 2.235 1.798 1.984 2.765 2.430 3.432 14.52 2.45 3.99 6.03 3.89 5.81
2
R 0.147 0.113 0.118 0.287 0.184 0.341 0.185 0.065 0.078 0.145 0.172 0.327
R2 Change – − 0.034 0.005 0.169 0.103 0.157 – − 0.12 0.013 0.067 0.027 0.155

Note: Table reports bootstrapped standardized co-efficients and p-values in parantheses.

Renko et al., 2021). Renko et al. (2021) report that resilience is more
critical than self-efficacy in a highly adverse environment to form an
intention to pursue new initiatives. This finding corroborates previous
studies on the relevance of entrepreneurial resilience under adversity (e.
g., Branzei & Abdelnour, 2010; Bullough et al., 2014; Corner et al., 2017;
Rindova et al., 2009; Shepherd, Saade, & Wincent, 2020). A crisis may
deplete other psychological resources; however, resilience motivates
entrepreneurs to thrive, exhibiting a paradoxical increase in other psy­
chological resources like optimism, life satisfaction, and tranquillity
(Fredrickson et al., 2003). Entrepreneurs who have thrived in the face of
adversity essentially acquire new skills, learn new knowledge, and gain
confidence and mastery in their abilities to cope with future disruptions
(Fredrickson et al., 2003).
Women entrepreneurs recognize the importance of stronger
networking and greater resilience to overcome difficulties. Networking
provides WEs with significant inputs like new ideas, knowledge, process,
and business models to develop new offerings demanded by the market
(Martinez-Perez et al., 2016). It is a primary source of knowledge cre­
ation and inculcates innovative culture within SMEs (Buttice, Colombo,
& Wright, 2017; Khan, Johl, & Johl, 2021; Lefebvre, Sorenson, Hen­
chion, & Gellynck, 2016). The present study explicitly recognizes the
significant role of social capital (i.e., networking) and psychological
capital (i.e., resilience) in introducing innovative products during a
crisis. It explains why some WE are more successful at running their
businesses through normal and disruptive situations. Women entrepre­
neurs’ socio-psychological resources can alter their thought-action
repertoires, allowing them to survive and thrive through crises. Our
study premised on the broaden-and-build theory and social network
theory demonstrates that the impact of entrepreneurial orientation on
new product innovations is contingent on the degree of networking and
resilience of the women entrepreneurs and that the usefulness of these
socio-psychological resources varies according to the industry type
being consumer or industrial goods.
As a synthesis of our research findings, we propose a 2 × 2 contin­
gency framework that represents entrepreneurs’ differentiated levels of
networking and resilience resources and their impact on new product
innovations during a crisis (see Table 6 below). We propose that at a low
level of networking and resilience of owner-CEOs, firms shall not be able
to innovate significantly during a crisis as they would lack the desired
socio-psychological resources and capability to think through new ideas.
However, if the level of networking is high and that of resilience is low,
explorative innovations will occur during crises. On the other hand, a
high level of resilience and low networking during a crisis will produce
exploitative innovations. Finally, owner-CEOs with a high level of
networking and resilience will introduce exploitative and explorative
innovations. Overall, we suggest that entrepreneurs can foster signifi­
cant new product innovations when high on networking and resilience
during a crisis. We propose this typology hoping that future research
shall empirically examine and further refine this contingency framework
of new product innovations during a crisis.
5.2. Managerial implications
Amidst a crisis like COVID-19, the survival of an enterprise is
significantly reliant on both the external networking relationships and
the psychological strength of top managers. Post-pandemic, a firm must

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G.K. Sahi et al. Industrial Marketing Management 111 (2023) 19–29

Table 4b
Hierarchical regression: Industrial firms (DV: New product innovations).
Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Model 8 Model 9 Model 10 Model 11 Model 12

Independent Variable
EO 0.132 – – 0.114 0.128 0.098 0.184 – – 0.148 0.167 0.131
(0.027) (0.062) (0.041) (0.116) (0.002) (0.021) (0.004) (0.021)

Moderators
Networking – 0.184 – 0.185 – 0.152 – 0.236 – 0.213 – 0.184
(0.002) (0.005) (0.012) (0.000) (0.001) (0.005)
Resilience – – 0.142 – 0.142 0.097 – – 0.183 – 0.162 0.098
(0.017) (0.022) (0.124) (0.004) (0.012) (0.112)

Interaction Effects
EO*NW (H1) – – – 0.098 – 0.092 – – – 0.121 – 0.101
(0.114) (0.181) (0.043) (0.083)
EO*RS (H2) – – – – 0.092 0.119 – – – – 0.121 0.128
(0.124) (0.048) (0.054) (0.040)
EO*NW*RS – – – – – 0.157 – – – – – 0.163
(H3) (0.012) (0.007)

Control Variables
OD1 − 0.021 − 0.012 − 0.018 − 0.008 0.012 − 0.007 – – – – – –
(0.788) (0.833) (0.788) (0.902) (0.723) (0.923)
OD2 − 0.076 − 0.097 − 0.052 − 0.074 − 0.065 − 0.056 – – – – – –
(0.267) (0.173) (0.156) (0.276) (0.287) (0.513)
OD3 0.145 0.110 0.105 0.076 0.042 − 0.065 – – – – – –
(0.051) (0.073) (0.083) (0.187) (0.476) (0.432)
OD4 − 0.043 − 0.052 − 0.040 − 0.058 − 0.030 − 0.067 – – – – – –
(0.387) (0.341) (0.548) (0.535) (0.601) (0.413)
OD5 − 0.025 − 0.022 − 0.036 − 0.019 − 0.014 − 0.010 – – – – – –
(0.645) (0.687) (0.634) (0.802) (0.813) (0.901)
OD6 − 0.131 − 0.125 − 0.117 − 0.114 − 0.138 0.023 – – – – – –
(0.062) (0.071) (0.090) (0.073) (0.021) (0.713)
OD7 0.025 0.016 0.021 0.024 − 0.005 − 0.042 – – – – – –
(0.791) (0.870) (0.687) (0.765) (0.972) (0.357)
OD8 0.014 0.032 0.019 − 0.023 − 0.009 0.014 – – – – – –
(0.831) (0.687) (0.852) (0.715) (0.910) (0.879)
F-Value 2.532 3.956 3.175 3.093 2.983 3.245 8.96 14.93 10.37 9.67 8.78 8.96
R2 0.091 0.101 0.147 0.140 0.114 0.167 0.059 0.076 0.047 0.032 0.074 0.125
R2 Change – 0.01 0.046 − 0.007 − 0.026 0.053 – 0.017 − 0.029 − 0.015 0.042 0.051

Note: Table reports bootstrapped standardized co-efficients and p-values in parantheses.

Table 5a
Hayes process results: Consumer firms (DV: New product innovations).
Interaction effects Unstandardized coefficient B Standard error (SE B) t-value p-value LLCI ULCI

Entrepreneurial Orientation*Networking 0.6515 0.2744 2.5913 0.0205 0.1246 1.2138

Entrepreneurial Orientation*Resilience 0.1832 0.1654 1.0128 0.3146 − 0.168 0.4364
Networking*Resilience 0.3133 0.2533 0.6494 0.4297 − 0.308 0.6578
Entrepreneurial Orientation*Networking*Resilience (3-way) 1.0217 0.4126 2.3432 0.0178 0.1785 1.7854
OD1 − 0.0200 0.0064 1.3214 0.2503 − 0.0022 0.0146
OD2 0.0745 0.0643 1.5647 0.9085 − 0.0625 0.3421
OD3 − 0.0134 0.0054 − 0.1963 0.8360 0.0691 0.0457
OD4 0.0143 0.0602 0.0798 0.0472 − 0.1435 0.1256
OD5 0.0343 0.1543 0.2453 0.2883 − 0.1983 0.2867
OD6 0.2234 0.2243 1.1324 0.1638 − 0.1721 0.5489
OD7 − 0.1675 0.2254 − 0.7659 0.1197 − 5643 0.3567
OD8 0.0013 0.0879 0.0254 0.3345 0.1632 0.1856
Model Summary: R R-Sq MSE F df1 df2 p
0.8799 0.7743 0.1424 26.9173 13.0000 102.0000 0.0000

encourage networking engagements with channel partners and other
stakeholders to secure access to valuable resources and develop resil­
ience to guard itself against potential future disruptions. The manage­
ment of industrial firms should recognize the value of positive emotions
in expanding their cognitive abilities, allowing them to build resources
and capabilities that will help them grow, survive, and thrive in the face
of adversity. They should strive to accumulate social and psychological
capital for their firms’ long-term survival and sustenance.
The firms manufacturing industrial goods need to capitalize on their
psychological resource to develop new ideas that require changes in the
existing processes, technology, systems, and structures. These firms can
introduce new products only when they prepare their mindset for such
new offers and make necessary plans to arrange the resources partly
owned by them and the rest by their business partners. The success and
survival of these firms hinge on their ability to bounce back during any
crisis by strengthening their willpower and internal strength. They
ought to overcome their weaknesses and leverage their strengths to take
advantage of the opportunities arising out of any crisis. The confidence
and courage of these entrepreneurs reinforce new ideas that boost them
to establish new relationships and explore new markets for existing

26
G.K. Sahi et al. Industrial Marketing Management 111 (2023) 19–29

Table 5b
Hayes process results: Industrial firms (DV: New product innovations).
Interaction effects Unstandardized coefficient B Standard error (SE B) t-value p-value LLCI ULCI

Entrepreneurial Orientation*Networking 0.0345 0.1356 0.2914 0.7703 − 0.2035 0.2628

Entrepreneurial Orientation*Resilience 0.2256 0.1235 1.7843 0.0487 0.0079 0.4480
Networking*Resilience − 0.1204 0.1456 − 0.7089 0.4850 − 0.4236 0.1867
Entrepreneurial Orientation*Networking*Resilience (3-way) 0.6023 0.2540 2.5431 0.0113 0.1347 1.1109
OD1 − 0.0034 0.0055 − 0.8921 0.4578 -0.0123 0.0065
OD2 − 0.05643 0.0532 − 0.6540 0.4543 − 0.1427 0.0682
OD3 − 0.0024 0.0014 − 1.1098 0.2789 − 0.0146 0.0020
OD4 − 0.0356 0.0246 − 0.9100 0.2652 − 0.1135 0.0490
OD5 0.0278 0.2367 0.2217 0.8595 − 0.2247 0.3820
OD6 0.0346 0.0873 0.5554 0.5913 − 0.1054 0.2984
OD7 − 0.1135 0.2389 − 0.9597 0.3682 − 0.3153 0.1198
OD8 0.0267 0.0673 0.6124 0.4746 − 0.0646 0.1429
Model Summary: R R-Sq MSE F df1 df2 p
0.8656 0.7493 0.1697 12.3890 13.0000 261.0000 0.0000

Future studies should include other components of socio-psychological

Table 6
resources. COVID-19 is a unique and rare crisis that affected the entire
A framework of new product innovations during a crisis.
world. Our study does not consider other crises that future research
Capital/Level Networking capital during a crisis should examine.
Low High

Resilience capital during a Low Insignificant Explorative Data availability

crisis innovations innovations
High Exploitative Ambidextrous Data will be made available on request.
innovations innovations

products or new products for existing markets.
Women entrepreneurs are a relatively small number in India. They
face several social and financial hurdles in managing their industrial and
consumer businesses. They are also innovative (Gundry et al., 2014).
They can leverage their socio-psychological resources, such as
networking and resilience, to introduce new product innovations that
lay the foundation for the future growth of their businesses in the face of
adversity. Resilience will enable survival, and networking will allow
them to manage their operations during difficult times.
5.3. Limitations and directions for future research
The study’s findings must be read, keeping its significant limitations
in mind. This study used cross-sectional data collected from SMEs owned
and managed by women entrepreneurs in the immediate aftermath of
the pandemic crisis in India. Future studies should compare our findings
with studies in developed countries to draw meaningful theoretical in­
sights. The cross-sectional research design limits our ability to draw
causal inferences from the results. Hence, the generalizability of the
findings is not conclusively established. We also acknowledge that the
construct of innovation has powerful alternative conceptualizations that
could provide more interesting findings. Some of these limitations also
provide future research opportunities. This study is confined to women-
owned SMEs in the context of the COVID-19 crisis. More research needs
to be conducted to find out the performance of these new product in­
novations in the long term. Our study does not take a nuanced view of
the innovation types, which future research should correct. The process
of introducing new product innovations can be compared between the
pre and post-Covid crisis times. This study can be extended to large-scale
companies as well as the services sector firms, which were not part of our
sample. Our study did not explore the personal problems and challenges
faced by women entrepreneurs during the crisis. Future studies should
document a longitudinal processual view of various day-to-day prob­
lems and challenges these entrepreneurs face during a crisis and the
mechanisms they adopt to overcome them. Future studies may also
consider alternative measures of networking and resilience to check the
robustness of the findings (e.g., Fisher, Maritz, & Lobo, 2016). The study
is limited to only one, albeit important, aspect of the social and psy­
chological resources, i.e., networking and resilience, respectively.
Acknowledgement
The authors acknowledges the useful contribution of three anony­
mous reviewers and Prof. Mumin Dayan in improving the quality of the
paper.
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 Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016

Contents lists available at ScienceDirect

Journal of Open Innovation: Technology, Market,

and Complexity
journal homepage: www.sciencedirect.com/journal/joitmc

The effectiveness of strategic alignment between open innovation and

generic strategies: Empirical evidence from restaurant SMEs in Vietnam ]]
]]]]]]
]]

Quang-Huy Ngo
FPT Greenwich center, FPT University, Can Tho Campus, Can Tho City 900000, Viet Nam

A R T I C L E I N F O A B S T R A C T

Keywords: Recently, scholars have indicated that open innovation is appropriate in restaurant enterprises. However, there
Business performance needs to be more understanding of whether open innovation adoption permits restaurant SMEs to gain business
Cost-leadership strategy performance directly and indirectly. In this regard, drawing upon the contingency theory and generic strategic
Differentiation strategy framework, this study examines the effectiveness of strategic alignment between open innovation and two
Open innovation
generic strategies, such as cost-leadership and differentiation strategy, in the context of restaurant SMEs in
Restaurants
Vietnam. To do that, this study proposes the research model suggesting that both strategies mediate the re-
SME
lationship between open innovation and business performance. The sample used in this study consists of 268
restaurant SMEs currently operating in Vietnam. This study executes PLS-SEM to assess the proposed research
model. The findings suggest that open innovation has no direct effects on business performance, while it has two
indirect effects on this performance through cost-leadership and differentiation strategy. These findings cast
light on open innovation by executing quantitative approaches to examining the indirect effects of open in-
novation on performance in the contexts of restaurants operating in Vietnam. Besides, while prior studies in
restaurant and hospitality contexts focus much on one aspect of open innovation, this study focuses on three
aspects of open innovation by conceptualizing open innovation as a high-order construct. Furthermore, this
study contributes to strategic management literature by assessing the mediating effects of strategy. Fourth, this
study casts light on the mixed relationship between generic strategies and performance by examining them in
Vietnam. Last, this study contributes to the theoretical development by examining the alignment between or-
ganizational characteristics with strategies rather than organizational structure.

1. Introduction
Doi Moi, a policy of economic reform enacted by the Vietnamese
government in the 1980s, facilitated the transition of the Vietnamese
economy from a centrally planned to a market economy (Beresford,
2008). Due to this reform, this country's GDP growth has averaged over
6% per year for the past two decades and is forecast to average 5% over
the next quarter-century (World Bank, 2021). The restaurant industry is
one of the economic sectors in Vietnam, keeping pace with growth
because the growth is attributable to changes in the Vietnamese peo-
ple's eating habits. In Vietnam, the restaurant industry is dominated by
small and medium-sized enterprises (SMEs) (General Statistical Office,
2020, p. 392). The majority of these restaurants provide traditional
Vietnamese cuisine. Currently, Vietnamese restaurants confront two
significant threats. First, several international food giants (e.g., McDo-
nald, KFC, and other giant food chains) have entered the Vietnamese
food business since Vietnam joined the World Trade Organization (Binh
and Terry, 2011). It alters the eating habits of Vietnamese people,
especially the youth. Traditional restaurants are under pressure to lose
young customers due to the increasing preference for fast food
(Wertheim-Heck and Raneri, 2020). Second, SMEs lack resources
(Millers and Sceulovs, 2017). These restaurants are less likely to com-
pete with those giant food providers. It poses a threat to those restau-
rants.
For success in the restaurant industry, outstanding service must be
provided effectively and efficiently (Alberca and Parte, 2018; Namin,
2017). Because customer demands are of utmost significance in the
hospitality industry, enterprises within this industry, such as restau-
rants, are constantly searching for novel ways to boost their reputation
and attract new customers (Kiatkawsin and Sutherland, 2020). Res-
taurants rely on knowledge generated by external sources, such as
consumers, business partners, and competitors (Dias et al, 2020; Sun

E-mail address: huynq121@fe.edu.vn.

https://doi.org/10.1016/j.joitmc.2023.100016
Received 19 December 2022; Received in revised form 28 February 2023; Accepted 9 March 2023
Available online 11 March 2023
2199-8531/© 2023 The Author(s). Published by Elsevier Ltd on behalf of Prof JinHyo Joseph Yun. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Q.-H. Ngo
and Lee, 2021), which enables them to innovate their service (Huang
and Liu, 2019). This approach shares similarities with the concept of
open innovation. Open innovation is a collaborative innovation in
which external parties exchange information and resources
(Chesbrough et al., 2006). The concept of open innovation is gaining
prominence in the hotel and tourism industry because it is crucial for
businesses to compete with new ideas and meet customers' evolving
wants (de Larrea et al., 2021). Recently, scholars (Yun et al., 2020; Yun
et al., 2022) executed case study approaches and revealed that open
innovation is sufficient in restaurant industries.
In the literature, scholars generally accept that open innovation
adoption permits SMEs to gain performance implications (Chabbouh
and Boujelbène, 2021; Crema et al., 2014; Pilav-Velic and Jahic, 2021;
Ramirez-Portilla et al., 2017). However, to the best knowledge, prior
mentioned studies focus on manufacturing sectors. A lack of attention
has been paid to service sectors (Chesbrough, 2017; West and Bogers,
2017). According to Obradović et al. (2021), because open innovation
is vast breadth and manufacturing and service sectors are vastly dis-
similar, this concept should be studied separately. Gassmann et al.
(2010) consistently called for more research on open innovation in
service sectors to shed light on this concept in these sectors. In the same
vein, Chesbrough (2011) argued that studying open innovation in ser-
vice sectors improves our understanding of how service providers
create values through customization and personalization to deal with
challenges in value captured. This study focuses on restaurant SMEs.
Assaf et al. (2011) assert that restaurant contexts are distinct from other
service contexts. First, restaurant business environments have a low
barrier to entry. Thus new restaurants may quickly enter the market.
Second, restaurants are also susceptible to price sensitivity, which
limits restaurant SMEs from competing with larger restaurants in terms
of low prices. These two unique characteristics challenge restaurant
SMEs. Despite the literature suggesting that adopting open innovation
is beneficial, there is a lack of knowledge on the impact of this adoption
on the business performance of restaurant SMEs. Therefore, this study
aims to find the answer to the first research question proposed as fol-
lows.
RQ1: Whether adopting open innovation permits the business
performance of restaurant SMEs directly?
In the literature, scholars documented that the relationship between
open innovation and performance is mixed (Du et al., 2014; Lu and
Chesbrough, 2022; Zhang et al., 2023). Some open innovation scholars
(Bagherzadeh et al., 2019; Lo et al., 2020; Rass et al., 2013; Tsai et al.,
2022) suggest that this relationship is contingent upon mediators. It is
consistent with contingency theory in strategic management literature,
suggesting that organizational characteristics should be aligned with a
specific strategy to find performance implications (Peng et al., 2018).
The alignment is established when strategy mediates the relationship
between organizational characteristics and performance (Venkatraman,
1989). According to the competitive strategy framework of Porter
(1980), an organization gains two types of competitive advantages,
cost-leadership, and differentiation advantages, to improve perfor-
mance when pursuing cost-leadership and differentiation strategy.
Several open innovation scholars (Crema et al., 2014; Reed et al., 2012;
Walecka-Jankowska and Zimmer, 2019) integrated this framework
with open innovation to explain how the relationship between cost-
leadership and differentiation strategy, respectively and open innova-
tion. However, to the best knowledge, no study examines whether the
relationship between open innovation and performance is contingent
upon two types of strategy: cost-leadership and differentiation. Fur-
thermore, in open innovation literature, prior studies focused only on
the moderating effects of contingent variables when contingency theory
is used as a theoretical lens to examine the relationship between open
innovation and performance (Lopes and de Carvalho, 2018, p. 293).
Consistently, Boyd, Takacs Haynes, Hitt, Bergh, and Ketchen Jr (2012)
reviewed contingency studies in strategic management and indicated
2
Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016
that the studies on the moderating roles of strategy dominate while
there is a lack of studies on the mediating role of strategy. As Huizingh
(2011) argued that open innovation scholars should execute a quanti-
tative approach to examine the chain of open innovation's effects on
performance through mediators, it is necessary to shed light on how
open innovation has indirect effects on performance through strategy.
Hence, the following two aims of this study are to find the answer to the
next two questions as follows.
RQ2: Whether open innovation has an indirect impact on the business
performance of restaurant SMEs through cost-leadership strategy?
RQ3: Whether open innovation has an indirect impact on the business
performance of restaurant SMEs through differentiation strategy?
Thus, this study draws upon the contingency theory, competitive
strategic framework, and open innovation literature to address those
research questions. To do that, this paper surveys 268 restaurant SMEs
operating in Vietnam to collect data. Next, this study relies on partial
least squared structural equation modeling (PLS-SEM) to assess those
data. The findings reveal that open innovation does not directly affect
restaurant SMEs' business performance. Instead, it indirectly affects
performance through the cost-leadership and differentiation strategy
mediating mechanism.
These findings allow the contributions to the literature in fifth folds.
First, these findings cast light on open innovation by executing quan-
titative approaches to examining the indirect effects of open innovation
on performance in the contexts of restaurants operating in Vietnam.
Second, while prior studies in restaurant and hospitality contexts focus
much on one dimension of open innovation, this study focuses on three
aspects of open innovation by conceptualizing open innovation as a
high-order construct. Third, this study contributes to strategic man-
agement literature by assessing the mediating effects of strategy.
Fourth, this study casts light on the mixed relationship between generic
strategies and performance in Vietnam. Last, this study contributes to
the theoretical development by examining the alignment between or-
ganizational characteristics with strategies rather than organizational
structure.
The paper will follow the format outlined below. The first section
summarizes the research on open innovation, generic strategies, busi-
ness performance, and hypothesis development. The following section
reveals a description of the data collection and analysis methods. In the
subsequent section, the results of the analysis will be reported. The
discussion is located in the fifth section. The conclusion, limitations,
and opportunities for future research are presented in the last section.
2. Literature review
2.1. Theoretical concepts and research models
2.1.1. Open innovation
Innovation can refer to an organization's novel ideas, methods, or
products (Rogers, 2003). There are two perspectives when examining
innovation. The first perspective is closed innovation. This type of in-
novation refers to the organization which is responsible for its own R&
D, production, and marketing (Bae and Chang, 2012). This innovation
is only implemented and generalized within the boundaries of an or-
ganization (Worsnop et al., 2016).
However, the source of innovation is from outside the organization
(Brunswicker and Vanhaverbeke, 2015). Therefore, Chesbrough et al.
(2006) introduced the concept of open innovation. Globalization, the
rise of technical complexity, as well as the development environments,
strategy, and economies of countries drive organizations to alter their R
&D units, which shift their innovation approach from closed to open
(Zanjirchi et al., 2019). Open innovation, which focuses on technolo-
gical knowledge and resources from outside the organizations, permits
organizations to successfully create and develop novel ideas (Ahmed
Q.-H. Ngo
et al., 2018). It contrasts closed innovation, which promotes innovation
through employees' intellectual and mental capabilities (Del Vecchio
et al., 2018; Hagedoorn and Zobel, 2015). According to Hagedoorn and
Zobel (2015), this perspective is based on sharing knowledge between
organizations and their stakehoders as customers, suppliers, and com-
petitors. According to Saebi and Foss (2015), organizations that em-
brace open innovation benefit from a better and quicker insight into
scientific resources and technological knowledge, which allows the
innovation to be completed more quickly, reduce costs, and increase
economic value.
In the literature, open innovation is suggested to include various
activities, such as outside-in, inside-out, and coupled activities.
Outside-out (inbound) activities include networking or collaborating
with other partners (e.g., suppliers, customers, competitors, con-
sultants, research institutes, universities, or governments) to acquire
and explore external knowledge (Cheng and Huizingh, 2014; Huizingh,
2011). Inside-out (outbound) activities cover the activities relating to
the external exploitation of internal knowledge for commercializing
purposes (e.g., licensing, knowledge-selling, and spinning-off activities)
(Cheng and Huizingh, 2014; Huizingh, 2011; Lichtenthaler, 2009).
Coupled activities refer to collaboration and creation with com-
plementary partners to combine the inflow knowledge from outside-in
activities with outflow knowledge from inside-out activities to jointly
develop and commercialize innovation (Bogers, 2011; Enkel et al.,
2009).
2.1.2. Open innovation in SMEs
The extant literature suggests that open innovation is sufficient for
SMEs to implement open innovation. Some unique characteristics of
SMEs allow them to be better off when exerting open innovation ac-
tivities than the large ones (Christensen et al., 2005; Stam and Elfring,
2008; Vossen, 1998). These characteristics include less bureaucracy,
more inclined to take risks, possessing more specialized knowledge, and
faster reaction to changing market demands. In addition, according to
Wynarczyk et al. (2013), open innovation has two beneficial effects on
SMEs. First, innovative SMEs successfully develop new products and
gain more access to the new market because innovation assesses inter-
firm resources at a low cost and permits them to address obstacles re-
lating to location, technology, and internal financial and human re-
sources. Second, it also enhances the accessibility of SMEs to gain in-
formation, technologies, and laboratory facilities, which requires
internally long-term and significant investments in R&D. In this regard,
it is generally accepted that open innovation induces innovation and, as
such, improves competitive advantages.
2.1.3. Open innovation in restaurants
Prior researchers investigate the open innovation practices in the
food industry. Because food service providers share many similarities
with restaurants, it is crucial to understand how and why open in-
novation framework is adequate in the restaurant industry.
Traditionally, the food enterprise was focused on minimizing manu-
facturing costs and, as a result, paid little attention to consumer de-
mands (Lienhardt, 2004). However, the sector has experienced a
transformation, concentrating increasingly on food safety and quality,
as well as customer health, wellness, and satisfaction (Aguilera, 2006).
In this regard, food enterprises focus on innovation (Omta and Folstar,
2005; Traill and Meulenberg, 2002) to improve the production of goods
to meet customers' needs.
As argued by Bigliardi and Galati (2013), in the food industry, the
development of novel products requires the involvement of several
actors, and as a result, the open innovation model is sufficient for food
enterprises to overcome the barriers to innovation. In this regard, these
authors proposed several models for the adoption of open innovation
for food enterprises. Since then, scholars have attempted to shed light
on the adoption of open innovation as well as its consequences in the
food industry. For instance, Chesbrough et al. (2014) drew upon open
3
Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016
innovation to conduct a case study, the Chez Panisse. They examined
how a small enterprise gains commercial success by developing a solid
business ecosystem that exchanges knowledge, fosters the individuals'
growth and enhances trust between actors. Arcese et al. (2015) carried
out a case study in the food and beverage supply chain to explore the
importance of open innovation among green practices and the degree of
implementation of this innovation. Annosi et al. (2022) performed a
case study in a large Dutch food service organization to reveal practices
used by this organization to allow the actors within the organizational
network to conduct inbound open innovation.
Recently, some scholars attempted to integrate open innovation
framework with restaurant studies. For instance, Yun et al. (2020)
conducted a case study in Naples, Gyungju, and Phnom Penh to in-
vestigate the open innovation ecosystem, including food ingredients,
menus, recipes, and recipes, and services, permits these restaurants to
gain success. Yun et al. (2022) executed a case study in Cardiff, Daegu,
and Nanjing to examine the difference between the open innovation
and multi-homing of the smart delivery sector in these three cities based
on the restaurant industry maturity of their respective capitalist
economies. However, those mentioned studies are based on case-study
approaches. According to Huizingh (2011), open innovation scholars
should execute a quantitative approach to examine the chain of open
innovation's effects on its consequences through mediators. Therefore,
it is necessary to employ quantitative approaches to study this issue.
Because of a lack of quantitative open innovation research in res-
taurant contexts, this study borrows open innovation literature in ser-
vice sectors to address open innovation activities in restaurants. Prior
studies reveal a wide range of open innovation activities in service
sectors. Most studies found that cooperating with external stakeholders
is a form of open innovation. For instance, Mention (2011) argued that
open innovation in services includes two types of activities: co-opera-
tion and co-opetition. Co-operation activities permit the organization
and its partners, such as suppliers and customers, science partners,
competitors, and enterprises belonging to the same group, to pursue
together the same assignment. Co-opetition activities allow an organi-
zation to compete and cooperate with rivals simultaneously. Both ac-
tivities allow organizations to gain more knowledge from their partners
to innovate. Similarly, Shin and Perdue (2022a) suggested that en-
hancing customer engagement improves open innovation through co-
creation activities between customers and the organization because
these activities permit customers to share their knowledge and, as such,
improve innovation. Also, Iglesias-Sánchez et al. (2020) argued that in
hospitality organizations, open innovation consists of two types of ac-
tivities, such as crowdsourcing and co-creation activities. Crowdsour-
cing activities permit the voluntary contributions of stakeholders' time,
finance (in the case of crowdfunding), and expertise to execute a task of
varied complexity and modularity to solve a specific issue. Co-creation
activities allow customers' contribution of experiences with products
and services to find innovation in product and service development.
Similar to service contexts, in the restaurant context, co-creation
activities are gained much attention. Particularly, scholars focus on
how these activities positively impact organizational outcomes. For
instance, Lin et al. (2019) argued that co-creation activities such as co-
development permit restaurants to reduce the development processes
and minimize the cost of failure. Yun et al. (2020) argued that co-
creation activities, the engagement of customers in developing in-
gredients, menus, and services, permit restaurants to enhance their
knowledge. As such, they can deliver their dishes, improving customer
experience through enhancing uniqueness.
However, the mentioned activities focus much on outside-in activ-
ities because they describe how external knowledge can be acquired
and explored. Open innovation includes other activities, such as inside-
out and coupled activities. In the restaurant literature, several activities
can be called inside-out activities because they aim to commercialize
internal knowledge. For instance, franchising in restaurant industries
allows restaurants to exploit their internal knowledge by franchising
Q.-H. Ngo Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016

their brand, recipes, operating procedures, and other proprietary widespread use. This variable has been defined using three perspec-
knowledge to their partners (Srinivasan, 2006). The provision of con- tives. First, Nazarian et al. (2017) argued that the performance of an
sultant services permits restaurants to exploit internal knowledge to organization is referred to as achieving organizational objectives.
make consultants on menu development, staff training, operational Second, Lee et al. (2015) suggested that researchers should consider
efficiency, customer service, branding, and others to their partners how businesses seek strategies and practices to reach their aims. Lastly,
(Baraban and Durocher, 2010). Coupled activities are also sufficient for Al-Weshah et al. (2019) described it as the extent to which organiza-
restaurants because this type of activity refers to the combination be- tions accomplish their goals. In this regard, an organization's perfor-
tween outside-in and inside-out activities. mance measures how well it accomplishes its goals.
According to Huizingh (2011), these activities vary in degree of Management science researchers view an organization's perfor-
openness. Open innovation is a multidimensional concept, and it causes mance as a sign of organizational success (Al-Samman and Al-Nashmi,
open innovation to be challenging to analyze because of the appro- 2016). The performance of an organization must therefore be appro-
priateness of dimension selection (Spithoven et al., 2013). It is argued priately assessed (Lin and Kuo, 2007). Early studies used financial ratios
that open innovation should be conceptualized as a broad concept en- to assess an organization's operations (Lau and May, 1998; Rai et al.,
compassing these three activities (Cheng and Huizingh, 2014). Thus, 1997; Vos and Roulston, 2008). This approach, however, has drawn
this study conceptualizes restaurants' open innovation as higher-order criticism for needing to be completed and having a short-term focus
reflective constructs, including three dimensions: outside-in, inside-out, (Chen and Liang, 2011). In addition, relying on financial metrics to
and coupled activities. measure performance limits assessments of potential future growth
because it focuses on previous performance (Lee and Choi, 2003). Non-
2.1.4. Generic strategies financial aspects are recommended to be included to comprehensively
A most well-known strategic framework of competitive advantages, measure the performance in addition to financial aspects (Dossi and
supported theoretically and practically, is the generic strategies fra- Patelli, 2010). Similarly, strategic management experts have claimed
mework proposed by Porter (1980). He suggested that cost leadership that there are two ways to measure business performance, such as fi-
and differentiation strategies are two general competitive strategies to nancial and non-financial measurements. As a result, similar to Prieto
gain advantages: cost-leadership and differentiation. and Revilla (2006), this study conceptualizes that the business perfor-
Organizations should use a cost-leadership strategy to mass-produce mance of SMEs in the restaurant industry has two components: fi-
standardized goods and services at a lower cost (Li and Li, 2008). High nancial performance and non-financial performance.(Table 1).
operational efficiency resulting from cost reduction improves organizational
performance (Raval et al., 2020). According to Torgovicky et al. (2005),
cost leadership strategy takes into account operations, facilities, overhead, 2.1.6. Contingency theory
cost savings from past mistakes, and being reasonably conservative in areas According to the contingency theory, organizational characteristics
like R&D, salesforce, service, training, and development. As a result, orga- are influenced by contextual factors which affect the performance of an
nizations that employ technologies and methods that save cost can maintain organization (Donaldson, 2006b). In the literature on strategic man-
prices that are more in line with or even lower than the average price of agement, strategic alignment is a key topic. Based on the contingency
their industry (Acquaah et al., 2011; Akingbade, 2014). Organizations im- theory, strategic management scholars propose this concept (Bruns and
plementing this strategy can gain a significant market share with price- Stalker, 1961; Lawrence and Lorsch, 1967). This concept highlights
sensitive customers, which increases profits (Murray, 1988). However, ac- performance as a consequence of an organization's alignment with its
cording to Lee et al. (2015), there is some cautiousness when aiming for cost environment, strategic choice, and organizational characteristics and
advantages. First, technological advancements cause the traditional pro- designs (Miles and Snow, 1978; Peng et al., 2018; Venkatraman, 1989).
duction system, production design, and experience to become obsolete. The term "strategic alignment" (also called "strategic fit") refers to the
Second, new or current businesses in the market might imitate low-cost degree to which organizational strategy shares common requirements,
methods. Third, flexibility is more important to satisfy the ever-changing and goals, with the organizational environment and organizational
demands of customers and the market than offering lower prices. Last but
Table 1
not least, the effectiveness of cost leadership depends much more on busi-
Business performance measures.
ness characteristics and the cost structure of a specific industry.
The differentiation strategy aims to offer unique products and ser- Sources Financial indicators Non-financial
vices, enabling organizations to charge higher prices, outperform indicators
competitors, and boost financial performance (Becerra et al., 2013).
Lau and May (1998) Sales growth None
Customers continuously compare the differences in the added value of Asset growth
product/service features offered by the organization and its competitors Return on asset
(Zhou et al., 2009). In this regard, a differentiation strategy is used to Return on equity
Rai et al. (1997) Return on asset None
tackle and manage the dynamic and unpredictable environment, in-
Return on equity
cluding new technology and new and unpredictable customer trends Vos and Roulston Return on asset None
(Hsieh and Chen, 2011). Organizations combine various approaches to (2008) Return on equity
enhance differentiation to acquire competitive advantages resulting Net profit
from differentiation (Altuntaş et al., 2014). For instance, brand, pro- percentage
Equity ratio
duct, technology, and service differentiation are a few examples of the
Current ratio
various types of differentiation (Kaleka and Berthon, 2006). Besides, Total asset
organizations, which successfully pursue differentiation strategy, invest Sales growth
significantly in product or service design, research and development, Sustainable growth
Prieto and Revilla Return on assets Customers
and marketing (Brenes et al., 2014; Gebauer et al., 2011; Sousa and da
(2006) Sales growth satisfaction
Silveira, 2020). Profitability Customer’s growth
Productivity Employees
2.1.5. Business performance Cost reduction satisfaction
The most common dependent variable in management research is Product/service's
quality
the performance of an organization. According to Richard et al. (2009),
Reputation
researchers frequently need to include its definition because of its

4
Q.-H. Ngo
characteristics and design (Nadler and Tushman, 1980). It describes
how an organization adjusts, transforms, and reconfigures itself to
reach a state of alignment between strategy and its environment, as
well as organizational characteristics and design (Venkatraman, 1989).
Misalignment in these actions may impede an organization from timely
responding to market developments (Carmeli et al., 2010; Zajac and
Shortell, 1989). It increases risk and lowers performance. The align-
ment is a crucial resource that allows an organization to enhance its
competitive advantages and, as such, sustain its growth despite the
constant need to adjust to the market (Murray et al., 2009). Hence, the
alignment between organizational strategy and organizational en-
vironment, as well as organizational characteristics and design, has
gained much attention from strategic management researchers because
this alignment has an impact on performance (Ginsberg and
Venkatraman, 1985; Miles and Snow, 1994; Siggelkow, 2002, 2017;
Venkatraman and Prescott, 1990).
The effectiveness of strategic alignment refers to improving perfor-
mance when an organization successfully aligns its characteristics with
its strategy. According to Venkatraman and Camillus (1984), there are
various forms of alignment, such as alignment as moderation, media-
tion, deviation, matching, gestalts, and profile deviation. The re-
ductionistic perspective formulates analytical models to assess align-
ment by matching, moderation, and mediation, whereas the holistic
perspective formulates analytical models by gestalt, covariation, and
profile deviation (Venkatraman and Prescott, 1990). It is argued that
researchers should select a specific form of alignment based on their
research interests (Venkatraman and Camillus, 1984).
2.1.7. Proposal of the research model
The contingency theory in strategic management literature suggests
that organizational characteristics should be aligned with a specific
strategy to find performance implications (Peng et al., 2018). According
to the mediating form of the alignment, the alignment is established
when this strategy mediates the relationship between organizational
characteristics and performance (Venkatraman, 1989). Open innova-
tion can be referred to as a specific organizational characteristic. Pre-
viously, several scholars (Crema et al., 2014; Reed et al., 2012;
Walecka-Jankowska and Zimmer, 2019) integrated the competitive
strategy framework (Porter, 1980) with this characteristic (e.g., open
innovation) to explain the relationship between cost-leadership and
differentiation strategy, respectively and open innovation. This study
takes a step further by relying on contingency theory to propose that
both cost-leadership and differentiation strategy mediate the relation-
ship between open innovation and performance. This proposal is ade-
quate because assessing mediating effects allows this study to examine
three proposed research questions simultaneously. Because examining
mediating effects requires the examination of the interrelationship be-
tween independent variables, mediators, and dependent variables
(Baron and Kenny, 1986), this paper proposes the research framework
illustrated in Figure 1. The next section presents arguments to test the
relationship between variables in the model.
2.2. Hypothesis developments
2.2.1. The impact of open innovation on business performance
Implementing open innovation leads to the enhancement of co-
creation activities (Iglesias-Sánchez et al., 2020). In restaurant in-
dustries, co-creation can be referred to as one of these activities. Co-
creation activities allow a restaurant to reduce the cost during the de-
velopment of new services and dishes (Lin et al., 2019) and the cost of
maintaining a relationship with customers (Carvalho and Alves, 2022).
In addition, these activities allow customers to engage in the develop-
ment of developing ingredients, menus, and services in restaurants, and
as such, they enhance customer experience (Yun et al., 2020). When a
restaurant can provide services and dishes at a lower cost and value to
customers, they perform better. In addition, restaurants can use open
5
Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016
Fig. 1. Research model.
innovation to find performance implications through commercializing
activities such as franchising. Franchising is a common method in res-
taurant industries, which helps restaurants to scale up (Sorenson and
Sørensen, 2001) quickly. Therefore, this method permits restaurants to
expand their market share and, as such, grow better (Sen, 1998). In
addition, franchising in restaurant industries allows restaurants to
perform better than restaurants do not (Madanoglu et al., 2011). Taken
together, in restaurant industries, open innovation is expected to po-
sitively and directly impact performance. Moreover, this study hy-
pothesizes as follows.
H1: Open innovation has a positive and direct impact on business
performance.
2.2.2. The impact of open innovation on cost-leadership and differentiation
strategy
In hospitality industries, restaurants are more openly innovative,
and open innovation plays a crucial role in innovation enhancement
(Shin and Perdue, 2022b). Hameed et al. (2021) found that hotels
execute a high degree of open innovation performance in the hospitality
industry and improve their service innovation. According to Rodgers
(2007), innovation drives food service organizations to pursue cost-
leadership and differentiation strategies. This study expects open in-
novation to have relationships with cost-leadership and differentiation
strategies pursued by restaurant SMEs.
On the one hand, scholars argue that innovation is crucial for res-
taurants to gain cost-leadership advantages, which is the aim of the
cost-leadership strategy. For instance, according to Hilman and
Kaliappen (2014), when hospitality organizations successfully in-
novate, they reduce their operational cost through economies of scale,
which results in market share expansion. Similarly, according to Alegre
and Berbegal-Mirabent (2016), the restaurant business's management,
core, and support processes need innovation to improve cost manage-
ment. In this regard, open innovation in restaurant SMEs drives these
organizations to pursue the cost-leadership strategy.
On the other hand, Ivkov et al. (2016) argued that innovation in
restaurant industries consists of the improvement of the following as-
pects such as decor and design, food and beverages, and technology
application. Prior studies reveal that those aspects are crucial for res-
taurants to gain differentiation advantages. For instance, Ryu et al.
(2008) argued that decor and interior design allows the restaurant to
establish a distinctive image, and as a result, customers differentiate
these restaurants from competitors. In addition, it is suggested that
using new ingredients, cooking techniques, and distinct drinking menus
allows restaurants to be different in the market compared to competi-
tors (Berenguer et al., 2009; Ottenbacher and Harrington, 2007). Last
but not least, it is revealed that restaurants implement information and
communication technologies to gain differentiation advantages in the
market (Ruiz-Molina et al., 2014). Therefore, open innovation drives
Q.-H. Ngo Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016

restaurants to pursue a differentiation strategy. It is proposed the next 2.2.4. The mediating effects of cost-leadership and differentiation strategy
two hypotheses as follows. In the literature, the link between open innovation and performance
results is mixed (Du et al., 2014; Lu and Chesbrough, 2022; Zhang et al.,
H2: Open innovation has a positive and direct impact on cost-leadership
2023). Therefore, this study draws upon the contingency theory to
strategy.
propose that aligning open innovation and generic strategies improves
H3: Open innovation has a positive and direct impact on differentiation business performance. On the one hand, open innovation permits res-
strategy. taurants to innovate, and as a result, they gain economies of scale and
cost management through innovation (Alegre and Berbegal-Mirabent,
2016; Hilman and Kaliappen, 2014). In this regard, the cost-leadership
strategy needs to be pursued because this strategy's advantage is based
2.2.3. The impact of cost-leadership and differentiation strategy on business
on cost reduction. On the other hand, open innovation fosters a high
performance
degree of innovation, which allows restaurants to find innovation in
The literature shows that the relationship between cost leadership
decor and design, food and beverages, and technology application
strategy and business performance and between differentiation strategy
(Ivkov et al., 2016). The innovation in such aspects enhances the res-
and performance is inclusive. First, Kankam-Kwarteng et al. (2019)
taurant's ability to differentiate itself from other rivals (Berenguer et al.,
revealed that pursuing low-cost strategies in Ghana allows restaurants
2009; Ottenbacher and Harrington, 2007; Ruiz-Molina et al., 2014; Ryu
to find firm performance. However, Altuntaş et al. (2014) indicated that
et al., 2008). In this regard, a differentiation strategy should be pursued
a cost-leadership strategy does not significantly affect operational per-
because the advantages of this strategy are based on the degree of
formance in the Turkish restaurant context. Besides, Parnell (2011)
uniqueness. To sum up, open innovation fosters innovation. However,
demonstrated that a cost-leadership strategy permits restaurants lo-
this innovation does not directly lead to high performance because
cated in Argentina and the USA to gain performance implications, while
innovation has two aspects: cost reduction through process innovation
this strategy does not significantly affect the performance of restaurants
and differentiation through product innovation (Chesbrough, 2011).
in Peru.
Therefore, strategic alignment between open innovation, cost-leader-
Second, Kankam-Kwarteng et al. (2020) demonstrated that in
ship, and differentiation strategy is demanded restaurants to take ad-
Ghana, restaurants pursuing a differentiation strategy gain the im-
vantage of open innovation. Therefore, they perform better than their
provement of restaurant performance, while Altuntaş et al. (2014)
rivals. Therefore, this study expects the last two hypotheses as follows.
found that Turkish restaurants following a differentiation strategy do
not significantly have high operational performance. In addition, H6: Cost-leadership strategy mediates the link between open innovation
Parnell (2011) indicated that the differentiation strategy permits res- and business performance.
taurants in the USA to find performance implications, while in Argen-
H7: Differentiation strategy mediates the link between open innovation
tina and Peru, restaurants following this strategy cannot find perfor-
and business performance.
mance.
Parnell (2011) states that the country's unique characteristics may
cause these mixed results. Therefore, further study is required to ex- 3. Methods
amine the impact of differentiation strategy on performance in a spe-
cific country. This study employs a quantitative approach to examine the pro-
This study expects a positive association between cost-leadership posed hypotheses (Emmert-Streib and Dehmer, 2019).
strategy and business performance in Vietnamese restaurant SMEs. In
daily operations, restaurants pay a premium on cost optimization be-
3.1. Survey approach
cause it maximizes profitability (Kankam-Kwarteng et al., 2019). A
cost-leadership strategy allows restaurants to provide standardized
This research utilized internet-based survey methods. Compared to
products and services at the lowest cost (Tse and Olsen, 1990). Cost-
standard survey methodologies, this approach has several advantages,
leadership restaurants emphasize the efforts of cost reduction of the
including (1) a shorter collection period; and (2) a simpler im-
processes by continually analyzing costs (Espino-Rodríguez and Lai,
plementation (Fricker and Schonlau, 2002). However, this approach is
2014). Hence, cost-leadership permits restaurant SMEs to gain business
also susceptible to a poor response rate (Fan and Yan, 2010). A low
performance by reducing costs.
response rate is subject to non-response bias. To address this bias, this
Also, this study holds that a differentiation strategy permits
study also performs a test to assess this bias. Internet-based surveying is
Vietnamese restaurant SMEs to find business performance. It is con-
acceptable for this study because the intended respondents are only
sistent with the literature. For instance, Ozdemir and Caliskan (2014)
accessible via email. These businesses qualify as SMEs if they have less
highlighted that a differentiation strategy by differentiating menu items
than 200 employees. This analysis also excludes micro restaurants (e.g.,
builds customers' perception of a distinct meal experience without re-
employing less than 10 people). Due to a lack of financial funding, this
ferencing the rivals' prices. As a result, this restaurant increased in sales.
study relies on a website's database. From a database of 250,000 Viet-
Similarly to this, Berenguer et al. (2009) suggested that a restaurant
namese businesses, a dataset of 2000 SMEs was extracted. This data set
utilizing the wine lists as a differentiation strategy is predicted to have
was obtained through the Vietnamese Golden Page (Vietnam Yellow
additional sales accompanying main courses since it improves con-
Pages, 2022). Particularly, this paper collects the email addresses of
sumer perception of this restaurant. So, according to the argument of
these restaurants.
Sun and Lee (2019), a restaurant that employs the differentiation
The collection process commenced in June 2022. The email was sent
strategy will perform better than restaurants that do not. Hence, this
to 2000 addresses. Two months later, 268 respondents had completed
study posited that differentiation strategy induces the business perfor-
the survey. These observations were used for the research. The rate of
mance of restaurant SMEs. Taken together, this study expects the next
response is 13.4%.
two following hypotheses.
This research also evaluates the validity of the sample size. The 10-
H4: Cost-leadership strategy has a positive and direct impact on time rule (Barclay et al., 1995), gamma-exponential method (Kock and
business performance. Hadaya, 2018), and power table (Hair et al., 2021) are three ap-
proaches utilized in PLS-SEM that were considered when analyzing the
H5: Differentiation strategy has a positive and direct impact on business
sample size. Based on these approaches, the current sample size of this
performance.
study is sufficient for PLS-SEM analysis.

6
Q.-H. Ngo
3.2. Data analysis
PLS-SEM is utilized to examine the proposed research model. This
method uses a series of ordinary least squares regression in order to
maximize the variance explained by endogenous constructs (Hair et al.,
2011). This analysis includes two stages such as measurement and
structural model assessment (Sarstedt and Cheah, 2019).
In addition, Zhao, Lynch Jr, and Chen (2010) presented a frame-
work for analyzing the mediating effects. Nitzl (2016) and Carrión et al.
(2017) elaborated on the PLS-SEM method for examining mediating
effects. Thus, this study employs the previously indicated approaches to
evaluate the mediating effects.
3.3. Common method bias
A Harman one-factor test is used as a post hoc statistical test to
determine whether common method bias poses a potential threat to the
results. When the first factor is the only factor with an eigenvalue
greater than 1 and the first factor explains more than the majority of the
total variance in all items, the existence of common method variance is
determined (Podsakoff and Organ, 1986). Therefore, this study per-
forms a factor analysis without rotation, and all indicators are added to
the test. The results show that the first factor only accounts for 31.363%
of the total variance in all items, which suggests that this bias does.
3.4. Non-response bias
As mentioned earlier, a low-response rate causes non-response bias.
Non-response bias may challenge the survey results because re-
spondents, which did not participate in the survey, may be significantly
different from those of the participating respondents (Wagner and
Kemmerling, 2010). To address this bias, this study utilizes a t-test to
compare the respondents who arrive at the survey early with those late
(Clottey and Grawe, 2014). This study found no significant difference
when comparing respondents arriving early with those arriving late to
the survey. Hence, the absence of this bias is supported by the analysis.
3.5. Measures
The paper utilizes measurements from previous research. A translation
from English to Vietnamese was performed because the target respondents
were Vietnamese. In addition, this study also asked five restaurant man-
agers to examine the questionnaire before distribution to the target re-
spondents. It improves the quality of the questionnaire in terms of word
and phrase choices as well as reduces the ambiguity in the statements. A 5-
point Likert scale is utilized in order to apply to those item statements.
This scale asks the respondents to indicate their agreement based on a
scale ranging from 1 (strongly disagree) to 5 (strongly agree).
3.5.1. Open innovation
Gassmann (2006) defined that open innovation (OP) consists of
three types of activities: outside-in, inside-out, and coupled. Therefore,
this study relies on these instruments to measure three open innovation
processes. This study operationalizes OP as a reflective-reflective
second-order construct that comprises three underlying dimensions
such as outside-in (OIA), inside-out (IOA), and coupled (CA) activities.
One reason is that this study focuses on the composite effect of open
innovation on its consequences rather than each dimension of open
innovation. Because the concept of Gassmann (2006) indicates that OP
permits an organization to organize three types of OIA, IOA, and CA,
these three types of activities reflect the degree of OP. This study's
operationalization is similar to Pundziene et al. (2022). They also op-
erationalized OP as a reflective-reflective second-order construct, which
includes three sub-dimensions.
There are three items in each dimension.
7
Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016
3.5.2. Generic strategies
This research relies on two unidimensional scales developed by Zahra
and Covin (1993) to operationalize cost-leadership and differentiation
strategies pursued by restaurant SMEs. This methodology was utilized in a
previous study in the hospitality setting (Köseoglu et al., 2013). As a result,
it applies to the context of this investigation (e.g., restaurants). The dif-
ferentiation strategy (DS) and cost-leadership strategy (CLS) are both op-
erationalized as reflective first-order constructs. DS scale contains seven-
item statements, while CLS scale contains five statements.
3.5.3. Business performance
An instrument to assess an organization's financial and non-financial
performance was created by Prieto and Revilla (2006). Rehman and
Anwar (2019) used it to assess the performance of SMEs. In order to
assess the business performance (BP) of restaurants, this study uses this
unidimensional scale. In this study, BP is operationalized as a reflective
first-order construct. This scale consists of ten components. It is an
objective measure of performance. It asks respondents to express their
agreement on the financial (e.g., 5 items) and non-financial (e.g., 5
items) performance of their restaurants.
3.5.4. Control variables
It is argued to include two control variables, restaurant size and age,
in the model to prevent model misspecification (Kankam-Kwarteng
et al., 2019). Therefore, two controlled variables were added to the
model. The number of restaurant employees determines restaurant size
(SIZE). Restaurant age (AGE) was determined by how long these res-
taurants had been in the business.
4. Results
4.1. Measurement model
A two-stage process was executed to assess the measurement model
(Sarstedt, Hair Jr, Cheah, Becker, & Ringle, 2019). The initial stage
evaluates first-order constructs (e.g., OIA, IOA, CA, CLS, DS, and BP).
The second stage is evaluating the second-order construct (e.g., OP).
4.1.1. First-order constructs' assessment
To examine the validity of the measurement model, this study
considers the following criteria: indicator loading, construct validity,
and reliability. According to Hair et al. (2019), items are retained when
their loading is above 0.708. Table 2 demonstrates that all the loadings
to their corresponding constructs are qualified.
The internal consistency reliability of the constructs was assessed
using Cronbach's Alpha and composite reliability. These figures surpass
the minimum of 0.7 (Hair et al., 2011). According to Table 3, this re-
liability has been verified.
Examining construct validity requires the assessment of convergent
and discriminant validity. This study investigates convergent validity
utilizing extracted average variance (AVE). AVE exceeding the criterion
of 0.5 indicates the establishment of this validity (Sarstedt et al., 2019).
The discriminant validity of the constructs was established when het-
erotrait-monotrait (HTMT) ratios were all smaller than 0.850 (Sarstedt
et al., 2019). Consequently, the values in Tables 3 and 4 support the
convergent and discriminant validity.
4.1.2. Second-order construct assessment
The evaluation of the second-order construct (e.g., OP) is con-
sistent with examining the first-order constructs. In this stage, OIA,
IOA, and CA are the indicators of OP. The scores of those indicators
were obtained from the analysis of the first stage. Next, this study
assesses indicator loading, construct validity, and reliability of OP.
According to the results and Tables 4 and 5, the validity of OP con-
structs is sufficient.
Q.-H. Ngo Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016

Table 2
Loading and cross-loading of construct items.

AGE BP CLS CA DS IOA OIA SIZE

AGE 1.000 0.073 -0.034 0.145 0.116 0.016 0.094 -0.018

BP_1 0.069 0.745 0.248 0.175 0.179 0.138 0.135 -0.097
BP_10 0.011 0.783 0.219 0.210 0.313 0.141 0.168 -0.052
BP_2 0.031 0.781 0.246 0.174 0.270 0.232 0.183 0.000
BP_3 0.036 0.782 0.270 0.205 0.277 0.165 0.224 -0.021
BP_4 0.023 0.772 0.203 0.158 0.252 0.186 0.212 0.006
BP_5 0.072 0.771 0.364 0.235 0.220 0.220 0.295 0.035
BP_6 0.042 0.813 0.281 0.236 0.326 0.215 0.268 -0.004
BP_7 0.143 0.790 0.278 0.201 0.237 0.146 0.200 0.000
BP_8 0.005 0.781 0.258 0.107 0.255 0.100 0.086 -0.018
BP_9 0.132 0.802 0.265 0.242 0.290 0.191 0.194 -0.002
CLS_1 -0.066 0.216 0.826 0.265 -0.252 0.280 0.294 -0.050
CLS_2 -0.053 0.281 0.828 0.268 -0.200 0.289 0.257 -0.097
CLS_3 -0.070 0.226 0.783 0.218 -0.223 0.225 0.234 0.020
CLS_4 0.026 0.338 0.819 0.273 -0.194 0.261 0.297 -0.017
CLS_5 0.002 0.315 0.862 0.320 -0.165 0.310 0.264 0.013
CA_1 0.116 0.204 0.301 0.920 0.308 0.681 0.674 0.071
CA_2 0.175 0.233 0.318 0.922 0.347 0.643 0.624 -0.012
CA_3 0.108 0.256 0.291 0.925 0.355 0.672 0.635 0.043
DS_1 0.091 0.254 -0.209 0.308 0.803 0.268 0.217 -0.011
DS_2 0.135 0.251 -0.226 0.303 0.790 0.276 0.221 -0.012
DS_3 0.171 0.266 -0.189 0.311 0.814 0.328 0.287 0.015
DS_4 0.083 0.258 -0.165 0.282 0.827 0.310 0.267 -0.007
DS_5 0.051 0.272 -0.138 0.348 0.817 0.343 0.309 0.002
DS_6 0.087 0.341 -0.250 0.234 0.824 0.208 0.197 -0.016
DS_7 0.050 0.290 -0.244 0.299 0.844 0.271 0.188 -0.003
IOA_1 0.034 0.154 0.268 0.611 0.287 0.903 0.639 0.016
IOA_2 0.021 0.184 0.309 0.693 0.324 0.922 0.683 -0.029
IOA_3 -0.006 0.263 0.334 0.675 0.351 0.929 0.663 0.023
OIA_1 0.072 0.238 0.306 0.655 0.292 0.683 0.922 -0.073
OIA_2 0.102 0.259 0.335 0.628 0.231 0.638 0.930 -0.038
OIA_3 0.087 0.208 0.263 0.648 0.298 0.675 0.916 -0.004
SIZE -0.018 -0.017 -0.032 0.035 -0.005 0.004 -0.042 1.000

4.2. Structural model
The bootstrapping approach evaluated the structural model with
5000 replacements (Hair et al., 2011). First, before examining the
structural model, Hair et al. (2019) argued that collinearity, ex-
planatory power, and prediction accuracy were sufficient when the
following criteria were met. Collinearity is not a concern when the VIF
value is less than 3. Explanatory power is small when R2 is less than
0.25. Q2 values higher than zero suggests the satisfaction of prediction
accuracy. Table 6 shows that the values of VIF, R2, and Q2 are sufficient.
The subsequent analysis is the path assessment. It examines the
viability of a proposed causal model of observable variables. Table 7
shows that the paths between OP and CLS (β = 0.435, p < 0.001) and
between OP and DS (β = 0.339, p < 0.001) are significant and posi-
tive. Also, according to this table, the paths between CLS and BP
(β = 0.509, p < 0.001), and between DS and BP (β = 0.495,
p < 0.001) are significant and positive. Therefore, the second, third,
fourth, and fifth hypotheses are accepted. However, the analysis shows
insignificant results of the path of direct effects between OP and BP
(β = −0.105, p = 0.324). As a result, the first hypothesis is rejected.
According to Zhao et al. (2010), in PLS-SEM, the mediating effect of two
strategies exists because of the following conditions. First, the OP has a
significant association with CLS and DS. Second, CLS and DS are significantly
related to BP. Third, when OP and BP are controlled, a direct association
between OP and BP is insignificant. Fourth, Table 7 demonstrates that both
CLS (β = 0.221, p = 0.001) and DS (β = 0.167, p = 0.002) significantly
mediate the association between OP and BP. Furthermore, a confidence in-
terval is examined that whether zero is in between the lower and upper
confidence limits. If zero does not fall inside the interval, the researcher can
ensure that the indirect effect is sufficient. Table 7 demonstrates that zero is
not in between the lower and upper confidence limits. Thus, the sixth and
seventh hypotheses are supported by this analysis. Moreover, in this case, the
mediating effects are the form of full mediation.(Table 8).
5. Discussions
5.1. Theoretical implications
This study examines whether the strategic alignment between open
innovation and generic strategies permits restaurant SMEs to improve

Table 3
Cronbach's Alpha, composite reliability, and AVE.

Variables Cronbach's Alpha Composite Reliability Average Variance Extracted

First-order constructs AGE 1.000 1.000 1.000

BP 0.930 0.940 0.612
CLS 0.882 0.914 0.679
CA 0.912 0.945 0.851
DS 0.917 0.934 0.668
TOP 0.907 0.941 0.843
OIL 0.912 0.945 0.851
SIZE 1.000 1.000 1.000
Second-order constructs OP 0.890 0.932 0.820

8
Q.-H. Ngo Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016

Table 4
HTMT between the first-order constructs.

AGE BP CLS CA DS IOA OIA SIZE

AGE
BP 0.075
CLS 0.056 0.366
CA 0.151 0.269 0.363
DS 0.122 0.363 0.280 0.398
TOP 0.023 0.236 0.367 0.790 0.381
OIL 0.099 0.272 0.363 0.766 0.322 0.792
SIZE 0.018 0.031 0.051 0.047 0.012 0.026 0.043

Table 5 performance implications. Consistently, Cheng and Huizingh (2014)

HTMT ratios between the second-order and first-order constructs. suggested that the performance implications of open innovation depend
AGE BP CLS DS OP SIZE
on three organizational characteristics: the ability to process knowl-
edge, research and development, and networking. In this regard, when
AGE Vietnam restaurant SMEs need to consider their ability to exploit open
BP 0.075 innovation sufficiently, they are less likely to improve business per-
CLS 0.056 0.366
DS 0.122 0.363 0.280
formance directly.
OP 0.057 0.310 0.487 0.372 The second and third hypotheses predict the positive and direct
SIZE 0.018 0.031 0.051 0.012 0.020 relationship between open innovation, cost-leadership, and differ-
entiation strategy. The results are in agreement with these hypotheses.
These findings share similarities with prior researchers (Crema et al.,
Table 6 2014; Reed et al., 2012; Walecka-Jankowska and Zimmer, 2019), who
Q2, R2 and VIF. suggested the link between open innovation and these two strategies.
Q2 R2 VIFs These findings have two implications for restaurant SMEs in Vietnam as
follows. According to the literature (Hameed et al., 2021; Shin and
AGE BP CLS DS OP SIZE Perdue, 2022b), open innovation fosters high innovation in hospitality
AGE 1.014
enterprises. Innovating hospitality enterprises reduce operational costs
BP 0.181 0.313 through economies of scale (Hilman and Kaliappen, 2014). Drawing
CLS 0.125 0.189 1.577 upon the literature and the findings, it implies that successfully
DS 0.074 0.115 1.453 adopting open innovation allows restaurant SMEs in Vietnam to gain a
OP 1.671 1.000 1.000
high degree of innovation, which results in high operational cost re-
SIZE 1.002
duction. In addition, successful innovation permits cost improvement in
restaurants (Alegre and Berbegal-Mirabent, 2016). Because the cost-
business performance. First, this study hypothesizes that open innova- leadership strategy aims to focus on cost reduction, in Vietnam, res-
tion directly and positively impacts business performance. However, taurant SMEs successfully adopting open innovation follow the cost-
the analysis is inconsistent with this hypothesis. It is implied that al- leadership strategy to exploit the benefits of cost reduction.
though open innovation permits restaurants to gain external knowl- Besides, the literature also reveals that innovation permits restau-
edge, exploit internal knowledge through commercialization, and co- rants to improve the restaurant's decor and design, food and beverages,
operate with complementary partners, it is less likely to impact and technology application (Ivkov et al., 2016). Moreover, the litera-
performance directly. This finding aligns with prior studies (Tjahjadi, ture also suggests that those restaurant's improvement aspects enhance
Soewarno et al., 2022; Tsai et al., 2022), which suggest open innovation the degree of uniqueness of the restaurants (Berenguer et al., 2009;
has no direct relationship with performance. The contingency theory Ottenbacher and Harrington, 2007; Ruiz-Molina et al., 2014; Ryu et al.,
provides insight into this insignificant relationship. This theory argues 2008). Since the differentiation strategy aims to improve uniqueness, it
that organizations should align their internal characteristics to find implies that in Vietnam, restaurant SMEs successfully adopt open

Table 7
Mediating analysis.

Total effects Direct effects Indirect effects

To BP To BP To CLS To DS Estimate Confident interval

From OP c= 0.298 c′= −0.105 a1 = 0.435 a2 = 0.339

p < 0.001 p = 0.324 p < 0.001 p < 0.001
From CLS b1 = 0.509
p < 0.001
From DS b2 = 0.495
p < 0.001
From AGE 0.039
p = 0.434
From SIZE 0.001
p = 0.987
OP - > CLS - > BP 0.221 [0.124; 0.335]
p < 0.001
OP - > DS - > BP 0.167 [0.076; 0.280]
p = 0.002

9
Q.-H. Ngo
Table 8
Hypothesis testing.
Hypotheses Path Path coefficient T statistic
H1 OP - > BP -0.105 0.986
H2 OP - > CLS 0.435 7.257
H3 OP - > DS 0.339 4.450
H4 CLS - > BP 0.509 6.025
H5 DS - > BP 0.495 6.362
H6 OP - > CLS - > BP 0.221 4.083
H7 OP - > DS - > BP 0.167 3.133
- AGE - > BP 0.039 0.782
- SIZE - > BP 0.001 0.017
innovation to improve the degree of innovation. As such, they improve
their uniqueness in the market by following the differentiation strategy.
The fourth and fifth hypotheses predict the positive and direct as-
sociation between the two strategies and business performance. The
analysis supports these two hypotheses. These findings share simila-
rities with Kankam-Kwarteng et al., (2019, 2020), while they are op-
posite to Altuntaş et al. (2014). These findings can be interpreted as
follows. Vietnam is one of the most steady and high-growth economies
in the world. For instance, the Vietnamese GDP has grown by nearly 6%
yearly over the past two decades since the nineties, and it is anticipated
to expand by 5% annually for the next quarter-century (World Bank,
2021). It was revealed that income positively impacts Vietnamese'
willingness to pay for food (Tran, Broeckhoven, Hung, Diem My, De
Steur, and Verbeke, 2022). On the one hand, despite the booming
economic growth, the poverty rate is about 5% (Pham and Riedel,
2019), approximately 4.8 million people. Restaurant SMEs following a
cost-leadership strategy still gain business success when they serve this
type of customers. Because cost-leadership strategy allows to provide
standardized products and services at the lowest cost (Tse and Olsen,
1990) as well as emphasize the efforts of cost reduction of the processes
by continually analyzing costs (Espino-Rodríguez and Lai, 2014). On
the other hand, due to the economic bombing, the middle class in
Vietnam is increasing quite quickly (De Koning et al., 2015). These
Vietnamese people are more selective in choosing a dining place. For
instance, it is indicated that Vietnamese people are more likely to select
a restaurant with a well-known brand (Pham, Do, and Phung, 2016).
Differentiation strategy promotes brand value (Panwar and Khan,
2020). Pursuing a differentiation strategy permits restaurant SMEs in
Vietnam to improve their brand, which gains popularity among middle-
class customers in Vietnam. Thanks to that, these restaurants charge
premium prices and, as such, improve business performance.
The sixth and seventh hypotheses expect the mediating impact of
both two strategies on the relationship between open innovation and
business performance. The analyzed data support these expectations.
These results are similar to prior studies, which found that the re-
lationship between open innovation and performance is contingent
upon various mediators (Tsai et al., 2022). From the contingency theory
perspective, these findings imply that restaurants cannot find high
business performance implications when adopting open innovation.
Instead, superior business performance results from the alignment be-
tween open innovation and two types of strategy: cost-leadership and
differentiation. These findings have two implications as follows. On the
one hand, the literature suggests that open innovation permits restau-
rants to innovate. As a result, they find an innovative way to reduce
costs through economies of scale and cost management (Alegre and
Berbegal-Mirabent, 2016; Hilman and Kaliappen, 2014). The cost-lea-
dership strategy promotes competitive advantages through cost reduc-
tion (Li and Li, 2008). In this regard, the alignment between open in-
novation and cost-leadership strategy permits restaurant SMEs in
Vietnam to execute this strategy and exploit the cost reduction ad-
vantages resulting from open innovation. As a result, these restaurants
offer their products and services at lower costs than their competitors,
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Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016
p-value Lower confidence limit Upper confidence limit Result
0.324 -0.312 0.096 Rejected
0.000 0.308 0.543 Accepted
0.000 0.174 0.479 Accepted
0.000 0.335 0.666 Accepted
0.000 0.336 0.640 Accepted
0.000 0.124 0.335 Accepted
0.002 0.076 0.280 Accepted
0.434 -0.057 0.141 -
0.987 -0.106 0.089 -
which leads to business success. On the other hand, the literature also
demonstrates that open innovation fosters a high degree of innovation,
which allows restaurants to find innovation in decor and design, food
and beverages, and technology application (Ivkov et al., 2016). The
innovation in such aspects enhances the restaurant's ability to differ-
entiate itself from other rivals (Berenguer et al., 2009; Ottenbacher and
Harrington, 2007; Ruiz-Molina et al., 2014; Ryu et al., 2008). The
differentiation strategy fosters competitive advantages by enhancing
uniqueness (Becerra et al., 2013). Hence, open innovation allows res-
taurant SMEs in Vietnam to differentiate themselves through innova-
tion in their decor and design, food and beverages, and technology
application. These differentiations improve these restaurants' unique-
ness. Hence, the alignment between open innovation and differentia-
tion strategy permits restaurant SMEs in Vietnam to execute this
strategy and exploit the differentiation advantages of open innovation.
In this regard, these restaurants charge premium prices because their
products and services are unique in the market and valuable to custo-
mers. It leads to business success.
5.2. Research contributions
With those findings, the research findings contribute to the body of
knowledge in several ways. First, prior studies (Yun et al., 2020, 2022)
reveal that open innovation is sufficient in restaurant industries.
However, these studies execute qualitative-based approaches. Besides,
open innovation scholars (Bagherzadeh et al., 2019; Lo et al., 2020;
Rass et al., 2013) suggest that the link between open innovation and
performance is contingent upon various mediators. According to
Huizingh (2011), open innovation scholars should execute a quantita-
tive approach to examine the chain of open innovation's effects on its
consequences through mediators. Addressing these gaps, this study
draws upon contingency theory and competitive strategic framework to
indicate that open innovation has positive and indirect impacts on the
business performance of restaurant SMEs through the mediating effects
of cost-leadership and differentiation strategy. Furthermore, according
to Hossain and Anees-ur-Rehman (2016), although the number of open
innovation studies in the Asian region is growing, this number is still
low, and some countries have a limited understanding. This study ex-
amines the consequences of Vietnamese restaurants' adoption of open
innovation. This study contributes to the literature by shedding light on
the consequences of adoption in Vietnam.
Second, prior restaurant studies (Lin et al., 2019; Yun et al., 2020)
focus much on one aspect of open innovation such as co-creation ac-
tivities. Similar to restaurant industries, the nature of operations in the
hospitality industry causes open innovation to occur naturally through
customer engagement and interaction (Shin and Perdue, 2022a), two
forms of co-creation activities (Jaakkola and Alexander, 2014; Luo
et al., 2019). According de Larrea et al. (2021), in the hospitality in-
dustry, there needs to be more understanding of one aspect of open
innovation, such as inside-out activities. According to Huizingh (2011),
open innovation varies in degree of openness. Open innovation is a
multidimensional concept, and it causes open innovation to be
Q.-H. Ngo
challenging to analyze because of the appropriateness of dimension
selection (Spithoven et al., 2013). It is argued that open innovation
should be conceptualized as a broad concept encompassing these three
activities (Cheng and Huizingh, 2014). Thus, this study contributes to
the hospitality literature by conceptualizing that open innovation in
restaurant industries consists of three separate activities: outside-in,
inside-out, and coupled.
Third, in the literature on strategic management, both the moder-
ating and mediating assessment of strategy can be used to evaluate the
effectiveness of strategic alignment. It is criticized that little research
executes mediating analysis to examine the impact of strategic align-
ment between organizational characteristics and strategy on perfor-
mance (Boyd et al., 2012). Addressing this gap, this study contributes to
the strategic alignment literature by assessing the mediating effects of
strategy on the relationship between organizational characteristics such
as open innovation and performance.
Fourth, although prior studies examine the impact of generic stra-
tegies on the performance of restaurants, the results are mixed.
According to Parnell (2011), a specific condition of the researching
country may lead to this issue. In this regard, additional research must
be conducted in a particular economy to gain insight into those re-
lationships. To the best knowledge, there needs to be more under-
standing of these relationships in Vietnam. Therefore, this study con-
tributes to the existing body of knowledge by casting light on the link
between cost-leadership and differentiation strategy, respectively, and
the business performance of restaurant SMEs in Vietnam.
Last but not least, contingency theory is a compelling theory used to
describe how the alignment between internal and external elements and
a specific strategy leads to high performance. Regarding factors within
an organization, classical contingency theorists focus much on the
alignment between structure, an aspect of organizational design, and
strategy (Donaldson, 2006a). However, due to the changing competi-
tive landscape nowadays, focusing on organizational design as the or-
ganizational structure is insufficient to explain how this design leads to
competitive advantages (Pertusa‐Ortega et al., 2010). Besides, organi-
zational design extends beyond organizational structure to take into
account cognitive processes such as sense making, creativity, and dis-
covery, as well as social, economic, and political activities such as the
establishment and modification of policies, programs, and routines
(Van de Ven et al., 2013). It demands more research to expand the
boundary of the classic view of contingency theory by examining or-
ganizational characteristics rather than structure. This study con-
tributes to theory development by focusing on organizational char-
acteristics, such as open innovation.
5.3. Managerial implications
This paper provides some crucial managerial implications for
managers and owners currently managing restaurant SMEs in Vietnam.
The results show that in the context of restaurant SMEs operating in
Vietnam, open innovation does not directly impact business perfor-
mance. In contrast, open innovation has two indirect impacts on BP
through cost-leadership and differentiation strategies. In this regard,
open innovation is crucial for restaurant SMEs to gain business success
by pursuing cost-leadership and differentiation strategies.
To successfully develop open innovation, the managers of restaurant
SMEs in Vietnam should improve three types of open innovation ac-
tivities: outside-in, inside-out, and coupled. First, many outside-in ac-
tivities permit restaurant SMEs to innovate their products and services
by absorbing external knowledge. For instance, restaurants can colla-
borate with suppliers to use external knowledge to modify and develop
new ingredients, flavors, and food products (Murphy and Smith, 2009).
Besides, restaurants use external customer feedback knowledge to
modify and develop new menu items, improve customer service, and
enhance their overall brand experience (Jin et al., 2012). Second, a high
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Journal of Open Innovation: Technology, Market,and Complexity 9 (2023) 100016
degree of internal knowledge resulting from restaurants' product and
service innovation can be used for franchising and consulting purposes,
two specific examples of inside-out activities. Franchising in restaurant
industries allows restaurants to exploit internal knowledge by fran-
chising their brand, recipes, operating procedures, and other proprie-
tary knowledge to their franchisees (Srinivasan, 2006). The provision of
consultant services permits restaurants to use internal knowledge to
advise their partners on menu development, staff training, operational
efficiency, customer service, branding, and others (Baraban and
Durocher, 2010). These two approaches allow restaurant SMEs to ex-
ploit and commercialize their internal knowledge successfully. Last but
not least, coupled activities refer to co-creation activities with com-
plementary partners to combine the inflow knowledge from outside-in
activities with outflow knowledge from inside-out activities to jointly
develop and commercialize innovation. In this regard, the managers of
restaurant SMEs should combine outside-in activities with inside-out
activities simultaneously in order to absorb external knowledge to im-
prove innovation and exploit internal knowledge to their partners.
However, it is noted that open innovation only allows restaurant
SMEs to gain business success indirectly. Instead, managers should pay
more attention to strategic pursuits such as cost-leadership and differ-
entiation strategies. On the one hand, co-creation activities as co-de-
velopment activities permit restaurants to reduce the development
processes and minimize the cost of failure (Lin et al., 2019). For in-
stance, co-development with customers allows those restaurants to
improve external knowledge by gaining valuable insights into what the
customers want, which can help them optimize their menu offerings
and reduce waste. Besides, those restaurants can exploit internal
knowledge and commercialize this knowledge through franchising ap-
proaches. According to Hsu and Jang (2009), franchising approaches
allow restaurants to utilize the franchisee's management and financial
resources, resulting in quicker growth, fewer capital requirements,
decreased monitoring expenses and decreased risk. Coupled activities
permit those restaurants to use external knowledge to reduce costs
during the development of menus and franchise their business models
to lower monitoring costs. In this regard, because the cost-leadership
strategy aims to gain competitive advantages of cost reduction, the
alignment between this strategy and open innovation is required for
those restaurant SMEs to fully exploit the benefits of those types of
activities in order to gain business success.
On the other hand, co-creation activities, such as the engagement of
customers in developing ingredients, menus, and services, permit res-
taurants to gain external knowledge, and as such, they can deliver their
dishes, which improves customer experience through the enhancement
of the restaurant's uniqueness (Yun et al., 2020). Besides, inside-out
activities such as franchising also permit restaurant SMEs to gain dif-
ferentiation advantages. According to (Sun and Lee, 2019), franchising
approaches permit restaurants to improve differentiation advantages by
developing market-specific strategies, conducting national marketing
campaigns or other marketing programs that increase brand awareness
and image, and obtaining prime locations. Coupled activities permit
restaurant SMEs to fully exploit the benefits of the first two types of
innovation activities. Because the enhancement of differentiation ad-
vantages and uniqueness are the aims of the differentiation strategy, the
alignment between open innovation and this strategy permits restau-
rant SMEs can gain business success.
6. Conclusions, limitations, and future research
The goal of this study, which is anchored on the theory of con-
tingency, is to assess the effectiveness of strategic alignment between
open innovation, cost leadership, and differentiation strategy. Drawing
upon the analytical framework of contingency theory, this study ex-
pects that two generic strategies, such as cost-leadership and differ-
entiation strategy, mediate the link between open innovation and the
Q.-H. Ngo
business performance of restaurant SMEs operating in Vietnam. Data
were obtained from 268 restaurant SMEs in Vietnam. According to the
findings, these two strategies fully mediate the relationship between
open innovation and business performance.
This study also has a number of drawbacks. The sector selection is
the first limitation. The restaurant industry in Vietnam includes fine-
dining restaurants, casual restaurants, fast-food restaurants, take-out
restaurants, family restaurants, cafe restaurants, and others. However,
this study is limited to casual restaurants. Therefore, the results are
restricted to those restaurants only. Second, this study is restricted by
its sample's demographic characteristics. Only respondents from
Vietnamese restaurants were chosen for this study. Thus, future studies
might evaluate the model with populations from countries other than
Vietnam. Thirdly, this study has certain limitations due to its cross-
sectional design and the fact that the generated data only allow for one-
time judgments about the replies. Consequently, a longitudinal study is
chosen to assess changes in responses over time and establish the causal
links between variables. Next, this study also utilized a subjective
performance measurement. Consequently, to increase the findings' va-
lidity, the future study may seek to collect objective metrics in addition
to subjective ones. Last but not least, this research depends on the re-
sponses of a single responder for each question. Future research could
improve the reliability of its conclusions by incorporating replies from
many persons at each company.
Appendix A. Supporting information
Supplementary data associated with this article can be found in the
online version at doi:10.1016/j.joitmc.2023.100016.
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