1.1 Introduction
New product development is the process of bringing a new product to the marketplace, which involves ideation, design, testing, and commercialization (Kotler and Keller, 2016). Corporate growth is a crucial objective for businesses seeking to remain competitive in today’s dynamic market environment. Among the various strategies available to achieve growth, new product development (NPD) has emerged as a pivotal tool. Companies must continuously innovate and introduce new products to meet evolving customer needs, gain market share, and sustain profitability. New product development is particularly important in industries where consumer preferences are constantly changing, and technological advancements are frequent. As highlighted by Cooper (2011), organizations that prioritize innovation and NPD often outperform their competitors, as they are better positioned to respond to market trends and disruptions. For instance, tech giants like Apple and Google have sustained their growth by consistently introducing cutting-edge products that revolutionize the market.
This approach to corporate growth allows companies to enhance their brand image, attract new customers, and retain existing ones. However, the path to successful new product development is fraught with challenges. Companies face risks such as high research and development (R&D) costs, market uncertainty, and the potential for product failure. As noted by Ulrich and Eppinger (2019), up to 40% of new products fail within the first year of launch due to various factors, including poor market research, inadequate product differentiation, and misalignment with consumer expectations.
As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of terms.
1.2 Background of Study
Historically, the development of new products has been essential for businesses to maintain competitive advantage and achieve growth. During the Industrial Revolution in the 18th and 19th centuries, technological innovations led to the mass production of goods, which revolutionized the way products were developed and introduced into the market. Early industrialists such as Thomas Edison, with his invention of the lightbulb, used NPD to create entirely new markets and transform industries, thereby setting the foundation for modern corporate growth strategies (Jones & Zeitlin, 2008). By the early 20th century, the importance of product innovation became more pronounced with the advent of mass production techniques introduced by Henry Ford. Ford’s assembly line production not only revolutionized manufacturing but also made it possible for companies to introduce new products at a faster pace and at a lower cost. This marked a significant turning point where companies began to see the strategic value of continuously developing new products to drive corporate growth and maintain market dominance (Schroeder, 2017).
The post-World War II period saw further advancements in NPD as global economies expanded, and consumer demand grew for a variety of products. Companies like Procter & Gamble and General Electric were among the first to institutionalize NPD processes, integrating research and development (R&D) departments into their corporate structures. These firms recognized that the consistent development of innovative products was essential for maintaining long-term growth and profitability. As noted by Chesbrough (2003), this period marked the beginning of the “R&D era,” where businesses began heavily investing in research to create cutting-edge products that could differentiate them in competitive markets.
With the rise of globalization in the late 20th and early 21st centuries, NPD took on even greater strategic importance. The rapid advancement of digital technologies, coupled with the opening of global markets, created both opportunities and challenges for businesses. Companies now had to develop products not just for local markets but also for a global consumer base, requiring more sophisticated and agile NPD strategies. The success of companies such as Apple, which introduced groundbreaking products like the iPhone, is a testament to the critical role of NPD in driving corporate growth in the modern era (West & Mace, 2010).
In today’s highly competitive and rapidly changing business environment, organizations are constantly seeking ways to maintain growth and profitability. One of the most effective strategies for achieving this is New Product Development (NPD). NPD involves the creation of new products or the improvement of existing products to meet changing consumer needs, penetrate new markets, and enhance corporate competitiveness. As businesses strive to achieve sustainable growth, the development of innovative products has become a cornerstone for maintaining relevance in the marketplace. According to Griffin (2017), companies that prioritize NPD often outperform their competitors by responding quickly to market trends and consumer preferences.
Corporate growth, defined as the expansion of a business’s operations, revenue, and market share, is vital for the long-term survival of an organization. Companies that fail to innovate risk stagnation and may ultimately be outpaced by more innovative competitors. This has been particularly evident in industries such as technology, consumer goods, and pharmaceuticals, where product life cycles are short, and customer preferences change rapidly. As noted by Schilling (2020), organizations that successfully integrate NPD into their corporate strategy tend to achieve higher growth rates, increased profitability, and stronger market positions.
Historically, the concept of new product development has evolved alongside advances in technology and globalization. The rise of global markets has intensified competition, compelling businesses to continuously seek innovative solutions to gain a competitive edge. For instance, the introduction of smartphones revolutionized the telecommunications industry, with companies like Apple and Samsung using NPD to dominate the market and drive corporate growth. This example highlights the strategic importance of NPD, not only as a tool for meeting customer demands but also as a key driver of corporate success. However, the process of NPD is fraught with challenges. It requires significant investment in research and development (R&D), as well as a thorough understanding of market needs and technological advancements. According to Cooper (2019), approximately 30-40% of new products fail within the first year of launch, primarily due to inadequate market research, misalignment with customer preferences, and ineffective execution. Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the effects of new product development as a strategy for corporate growth.
1.3 Statement of Problems
Investigation revealed that developing a new product often requires substantial investment in research and development (R&D), product testing, and marketing. For many companies, especially small and medium enterprises (SMEs), the financial burden of these costs is overwhelming, limiting their ability to pursue innovative growth strategies. According to Griffin (2017), firms that do not have sufficient capital to fund the NPD process face difficulty in competing with larger corporations that have the financial flexibility to absorb the costs of failed products.
Furthermore, the rapidly changing market environment is a major challenge for companies engaging in NPD. Consumer preferences, technological advancements, and market trends are evolving at an unprecedented pace, making it difficult for firms to keep up. Companies often find that by the time a new product is developed and ready for launch, consumer needs may have shifted, rendering the product obsolete or less attractive. As Kotler and Keller (2016) point out, companies need to be agile and responsive to market shifts, but many struggle to do so due to lengthy development cycles and rigid internal processes.
There is also the problem of alignment between NPD and overall corporate strategy. In many cases, businesses develop products without fully integrating them into their broader corporate goals, leading to a lack of coherence between product innovation and long-term growth strategies. This misalignment often results in products that, while innovative, do not contribute meaningfully to corporate growth or market expansion. Ulrich and Eppinger (2019) emphasize that without clear strategic direction, NPD efforts are less likely to drive sustainable growth and may even divert resources from more promising ventures.
Lastly, organizational culture is a significant barrier to successful NPD. Many firms struggle to foster an innovative culture that encourages risk-taking and creativity. Resistance to change, hierarchical decision-making, and a fear of failure within organizations is hindering the NPD process. This issue is particularly pronounced in more established companies where innovation is seen as disruptive to traditional operations (Schilling, 2020). Without a supportive organizational culture, even the most promising new product ideas are unlikely to reach the market.
1.4 Aim and Objectives of Study
The aim of the study is to investigate the effects of new product development as a strategy for corporate growth. In achieving this aim, the following specific objectives were laid out as follows:
- To evaluate the challenges businesses face during the new product development process and how these challenges affect corporate performance.
- To assess the impact of new product development on corporate growth and market expansion.
- To identify the key factors that contributes to the success of new product development strategies.
- To explore the relationship between innovation, consumer needs, and the effectiveness of NPD as a growth strategy.
- To examine how organizations align new product development with their overall corporate strategies for sustainable growth.
- To investigate the role of organizational culture in facilitating or hindering the success of NPD initiatives.
1.5 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- How does new product development impact corporate growth and market expansion?
- What are the key factors that contribute to the success of new product development strategies?
- What challenges do businesses face during the new product development process, and how do these challenges affect corporate performance?
- How does innovation influence the effectiveness of new product development in meeting consumer needs?
- In what ways do organizations align new product development with their overall corporate strategies to achieve sustainable growth?
- What role does organizational culture play in the success or failure of new product development initiatives?
1.6 Research Hypothesis
In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.
- H01: New product development positively influences corporate growth and market expansion.
- H02: Effective alignment between new product development and corporate strategy significantly enhances business performance.
- H03: Organizational culture plays a critical role in determining the success of new product development initiatives.
1.7 Significance of Study
The findings of this research will help businesses understand how NPD contributes to market expansion and competitive advantage in rapidly changing industries. The research will also offer a clearer understanding of the factors that lead to the success or failure of NPD efforts, enabling companies to optimize their innovation processes.
Additionally, the study will contribute to the academic field by offering empirical data on the relationship between corporate strategy and innovation, which will help researchers and students further explore the dynamics of NPD in various sectors.
Finally, policymakers and business leaders will benefit from the findings as they will provide practical recommendations on how to foster an innovative organizational culture that supports sustainable growth through NPD.
1.8 Scope of the Study
The scope of the research is focused on the effects of new product development as a strategy for corporate growth in Unilever Nigeria Limited.
1.9 Limitations of the Study
During the course of this study, many things militated against its completion, some of which are:
- Delays in Response from Respondents: Many participants, including corporate leaders and product managers, were unable to respond promptly to questionnaires and interviews, causing setbacks in gathering necessary insights.
- Time Constraint: The time frame given to accomplish this project was very short due to school academic calendar and it was carried out under pressure which made the researcher not to implement some necessary features.
- Financial Constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
1.10 Definition of Terms
New Product Development (NPD):
New Product Development refers to the process through which companies conceive, design, and introduce new products to the market. It involves multiple stages, including idea generation, product design, development, testing, and commercialization. NPD is a critical factor for sustaining competitive advantage and driving corporate growth (Ulrich & Eppinger, 2019).
Corporate Growth:
Corporate growth is defined as the expansion of a company's operations, market share, or profitability over time. This growth may be achieved through various strategies such as mergers, acquisitions, or the introduction of new products. It is often used as a measure of a company’s success and long-term sustainability (Hitt, Ireland, & Hoskisson, 2017).
Innovation:
Innovation is the process of developing new ideas, products, or services that create value for businesses and customers. in the context of NPD, innovation plays a vital role in differentiating products from competitors and meeting the evolving needs of the market (Schilling, 2020).
Market Expansion:
Market expansion refers to a company’s efforts to increase its customer base by entering new geographic areas, targeting new customer segments, or introducing new products. It is a growth strategy aimed at increasing market share and revenue (Kotler & Keller, 2016).
