Abstract

Innovation can be best described as the adoption of an idea or behaviour pertaining to a product, service, device, system, policy or programme that is new to an organization. Many companies nowadays develop and pursue innovative new products as a strategic move to gain competitive share in the market, and many do so by launching new products before competitors moving in. However, to produce innovation effectively, they need support from various operating sections and one of the main sections comes from suppliers. Because managers are always confronted with competitive pressures from newly developed products by rivals, collaborative efforts with experienced suppliers can help companies develope new products more efficiently, especially to cut costs and reduce time to develop new product. Innovative new products from major players in the industry can also have a potential detrimental impact on profitability. To deal with this situation, the authors will discuss how the role of supplier influence can minimize this problem. A model and several propositions are introduced to illustrate potential effects between relavant research variables. First, the relationships between all independent variables (threats to innovation and supplier influence) and new product innovativness were examined. Second, the study assesses whether greater supplier influence would positively moderate the domain relationships. The study advocates that supplier influence is an issue of paramount importance for practitioners in most industries and is an essentail element in the marketing mix that impacts directly on revenue. This study contributes to both theoretical and practical perspectives.

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