Sahay, A. & Riley, D. (2003). The Role of Resource Access, Market Considerations, and the Nature of Innovation in Pursuit of Standards in the New Product Development Process.Journal of Product Innovation Management, 20(5), 338-355.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Advanced

Annotation: The authors establish a distinction between technology compatibility standards and customer interface standards. They review the impact of specific antecedent factors that may lead to a focus on one type of standard over the other including: mode of access to complementary assets; learning costs; strength of appropriability regime; and nature of innovation. A survey of 234 manufacturers was conducted and revealed a propensity to pursue customer interface standards when the firm accesses technological complementary assets through vertical integration, there is a strong appropriability regime, there is a greater indirect network externality related to a product, and when there is a greater technological advantage associated with the product. They are more likely to pursue compatibility standards when higher learning costs are associated with the product market, innovation is more radical, and when there is a greater direct network externality related to a product.

Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees)

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

Tip: Compatibility standards differ from customer standards. A decision to give attention to one form of standards over another requires a review of the organization, competition, and level of innovation present in the product.
Survey of 234 manufacturers.
Occurrence of finding within the model: Step 1.5

• To be successful, radical new products frequently require associated services and familiar interfaces that are easily used by consumers. (McIntyre, 1988)
  Occurrence of finding within the model: Step 2.1

• Vertical integration is positively related to increased new product development. It can offer a firm access to complementary assets and resources that give them the ability to tailor products for customer needs. (Collier et al, 1984; Buzzell & Gale, 1987)
  Occurrence of finding within the model: Step 1.5