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A Study of Product Innovation on Firm Performance
Pages 10 (2510 words)
Running Head: PRODUCT INNOVATION AND FIRM PERFORMANCE Name of student: Subject: Marketing Topic: A Study of Product Innovation on Firm Performance Date of Presentation: Abstract This study applies the perspective of new product development, brand extension and organizational change to highlight the impact of product innovation on firm performance…
It reveals that continuous product innovation increases the capacity of a firm to serve wide ranging consumer needs thereby upholding their loyalty. The issue of early innovator and follower firms also emerge whereby a short-lived monopolistic operation is established through new product launch. The early innovators earn super profits before competing follower firms imitate their products. Generally, the study leads to the conclusion that product innovation is significant for a firm’s performance and survival. Introduction Product innovation is the introduction of a new product in the market that uses different technology and has a higher utility for the consumer than the existing products. In the contemporary competitive environment, a business requires to maintain leverage in relation to its competitors through ensuring that consumer loyalty is maintained and hence a greater market share. Precautions should be observed during product innovations since the process may have a positive or negative impact on the existing product categories. They may result in a greater market share, cannibalism and destabilization of products. Nevertheless, the significance of product innovation can not be ignored. This study explores the positive relationship between product innovation and firm performance. ...
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