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ISSN : 1738-3110
The Effects of Advanced Design Innovation Strategy on Business Performance
Song, In-Am
Hwang, Hee-Joong
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Abstract
Purpose - This paper empirically studies the effects of advanced design innovation strategy on business performance, to investigate manufacturing industries that can develop design-driven-innovation strategies. Many researchers now recognize the importance of design in a CEO's decision-making process. To analyze these effects, this study deduces the definition of advanced design strategy by reviewing existing studies. The advanced design is a strategy that is applied to improve business performance instead of the appearance of a product for increasing its sales. In terms of business processes, the advanced design strategy is defined as the incorporation of business activities prior to the development of the product, to offer new experiences and values to users, from those designs. Research design/data/methodology - This paper establishes a model for empirical analysis. In this study, we derived factors of the characteristics of advanced design based on previous studies. We tried to investigate whether advanced design innovation strategy and entrepreneur's characteristics could have any impact on business performance. At the same time, we tried to find out the moderating effect of entrepreneurs' characteristics. The advanced design is made up of three elements: precedence, integration, and immersion of design activities. These three elements are independent variables for the model. The dependent variables are: increased rate of sales, R & D performance, and public image of the company. Specifically, this study establishes a CEO's characteristics as a moderating variable between the independent and dependent variables. Results - We proved that the level of entrepreneurs' characteristics has a moderating effect on the business performance. The findings of this study offer the following theoretical implications. The precedence of design activities positively affects the increased rate of sales by offering new experiences to users and creating new values. The integration of design activities also has a positive effect on the R&D performance. In addition, the immersion of design activities positively influences all the elements comprising business performance. The analysis of moderating variables elucidates that CEO's characteristics have a moderating role between precedence, integration, and immersion of design activities, and business performance. Conclusions - The practical implications of the study are as follows. This study contributes to the progression of advance design theories by conducting an empirical study on the advanced design concept. More importantly, the empirical study on the CEO group seeking exploratory innovation supports Verganti's "design-driven innovation" concept, according to which design can make innovation successful by offering useful values to users, as evident in the case of many innovative companies, such as Nintendo and Apple. Future studies need to investigate the reliability of practical examples, including the various activities of business. We suppose that there may be real differences between the results of this study and the applicative situation in the presence of a CEO group.
- keywords
- Advanced Design, Design Driven Innovation, Business Performance
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