Purpose
This study aims to use the new product development (NPD) perspective to understand why traditional leading telecom equipment companies, such as Alcatel-Lucent (ALu), have stagnated but the newcomer Huawei has achieved steady growth.
Design/methodology/approach
This paper takes the form of a comparative case study.
Findings
Three significant differences in NPD process between the companies were discovered: first, although both companies claim that they are market-oriented, Huawei’s NPD projects are customer-driven, and ALu projects are joint considerations of customer demand and technology leadership; second, Huawei uses a design-to-value strategy, and ALu applies a design-for-quality-premium strategy; third, resources are allocated and shared at the corporate level in Huawei and at the business division level in ALu.
Practical implications
This study offers several implications for NPD managers. First, holding a market leader position is more important than being a technology leader. Companies must fundamentally change their mind-sets, restructure NPD models and prioritize and empower marketing and sales departments in the decision-making and management of NPD projects. Second, to maximize customer value, managers must balance cost and quality and avoid overengineering. A quality premium no longer necessarily leads to product competitiveness. Third, to improve the efficiency of NPD performance, companies must build up a mechanism to enable across-boundary resources.
Originality/value
This study highlights a number of key NPD strategy issues. It was conducted in the telecom equipment industry, but NPD managers of other industries will also gain useful insights from the discussion.
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