Manufacturing and Marketing Interdependence in the New Venture Firm: An Empirical Study

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Vidyaranya B. Gargeya, Professor and Department Head (Creator)
The University of North Carolina at Greensboro (UNCG )
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Abstract: This research addresses the interdependent nature of manufacturing and marketing decisions in new venture firms. Based on an empirical study of new venture firms in the communications and computer equipment manufacturing industry, the research first shows that the perception of key aspects of the environment, entry barriers, and hostility does not differ between successful and unsuccessful new venture firms. Such a finding suggests that new venture success is based on much more than an accurate perception of the environment. In contrast, differences in performances are more likely to be attributable to the manner in which the firms constitute and implement their strategies, given their perceptions of the environment.

The research also reveals no underlying difference in manufacturing and marketing breadth between successful and unsuccessful new venture firms. The research thus, does not support the proposition that successful new ventures must be limited in scope to a narrow product range, a small market segment, a narrow geographic market, and a limited number of distribution channels. A successful firm in this industry may strategically “focus” on alternative competitive advantages such as customization, delivery speed, product development and innovation. Such a concept of focus is not based on the notion of a narrow product mix for a particular market niche, but on a coherent set of tasks based on market requirements.

This research illustrates the importance of the interaction between manufacturing and marketing decisions in predicting new venture firm success. However, the study also suggests that consistency among manufacturing decisions alone may be insufficient to predict firm success. Likewise, consistency among marketing decisions alone is insufficient to predict firm success. As a result, any study that purports to predict new venture firm success based only on an analysis of manufacturing decisions is suspect. The interaction of manufacturing and marketing decisions is only moderately successful in predicting firm success, indicating that the manufacturing and marketing interface is important, but still doesn't provide a complete picture of firm synergy. A more complete model for predicting firm success should likely incorporate other strategic, interdependent relationships with manufacturing and marketing decisions (i.e., the firm's human resource management strategy, financial strategy, R and D posture, etc).

Additional Information

Journal of Operations Management
Language: English
Date: 1991
manufacturing, marketing, new venture firms

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