Effect of new product development on performance of business organizations
New product development has been shown to positively impact financial and non-financial performance of many organizations. Financial impacts of new product development on organizations include increased sales, market share, profitability, return on investment, and share price. Non-financial impacts of new product developments include increased shareholder satisfaction, increased employee satisfaction, increased customer satisfaction, and overall business growth.
The following are empirical studies on the effect of new product development on the performance of business organizations across different parts of the world.
This study explored the impact of product development on the operational performance of Ultimate Motors, located in Addis Ababa, Ethiopia. In particular, the study addressed the following objectives: to determine the effect of product design on operational performance of Ultimate Motors, to find out the effect of product innovation on operational performance of the target firm, to establish the effect of research & development on operational performance of the target firm, and lastly, to assess the effect of assembly line on operational performance of the target firm (Dagnaw et al., 2025).
This being a case study research design, 98 staff members at Ultimate Motors were selected to participate in the study. Data collection was done using a questionnaire. The collected data were analyzed using descriptive statistics, including frequency, percentage, mean, and standard deviation. Pearson’s correlation analysis was used to assess the association between the variables under study. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to establish the effect of independent variables (product quality, product innovation, research & development, and assembly line) on the dependent variable (operational performance of Ultimate Motors). The findings were presented in suitable tables as required (Dagnaw et al., 2025).
The results of correlation analysis revealed that product design had a negative association with production time and manufacturing cost and a positive association with production efficiency. The results also showed that product innovation had a positive and significant association with production time, production efficiency, and manufacturing cost. It was also established that research & development had a positive and significant association with production time, production efficiency, and manufacturing cost; the assembly line had a negative association with production time and manufacturing cost; and a positive association with production efficiency (Dagnaw et al., 2025).
The results of PLS-SEM indicated that 78.3% of the variance in operational performance of Ultimate Motors is explained by the four independent variables, that is, product design, product innovation, research & development, and assembly line (Dagnaw et al., 2025).
This study focused on the impact of product development strategy on the performance of Nzoia Sugar Company, Kenya. In particular, the study sought to establish the following: the use of the existing production system by the company to introduce new products; the use of existing managers/personnel by the company to market new products; the sharing of advertising campaigns to launch new products; the use of existing departments by the company to market products; the use of the existing brand by the company to market new products; the sharing of operations, administration, and management skills by the company to introduce new products; and lastly, the sharing of product development personnel by the company to introduce new products (Omollo & Sije, 2023).
This was a case study research project. Consequently, 87 company employees constituted respondents for the study. Data was collected using a questionnaire. The collected data was analyzed using descriptive statistics, including frequency, percent, mean, and standard deviation. Correlation analysis was used to establish the association between the variables under study. The results were presented using tables as deemed appropriate (Omollo & Sije, 2023).
The results revealed that Nzoia Sugar Company uses an existing production system to introduce new products. It was also shown that the company uses existing managers/personnel in the marketing of new products. The findings also indicated that the company shares advertising campaigns while launching new products. It was also demonstrated that the company shares operations, administration, and management skills during the introduction of new products. Also, the findings revealed that the company shares product development personnel to introduce new products. The results also demonstrated that the company uses existing brands to market new products. Last but not least, the findings also showed that the company uses existing departments to market products (Omollo & Sije, 2023).
The results of the Pearson correlation analysis showed that the product development strategy used by the company has a significant effect on its performance (Omollo & Sije, 2023).
The study explored the effect of new product development (product extension, new channels of distribution, and attractive product presentation) on customer service quality (reliability, responsiveness, tangibles, assurance, and empathy) in selected commercial banks in Nairobi, Kenya. The target population included commercial banks operating in Nairobi County. 164 respondents, including branch customer service staff, customer service managers, customer service department heads, and company CEOs, were selected to participate in the study (Mugambi & Oduor, 2023).
Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics such as percentage, frequency, mean, and standard deviation. Regression analysis was employed to establish the relationship between the independent variable (new product development) and the dependent variable (customer service quality). The results were presented in suitable tables as required (Mugambi & Oduor, 2023).
The findings revealed that most of the targeted commercial banks practiced new product development as part of organizational strategy. The results of regression analysis indicated that new product development had a positive and significant impact on customer service quality in the target commercial banks (Mugambi & Oduor, 2023).
This study investigated the effect of new product development on the performance of biscuit manufacturing companies in Addis Ababa, Ethiopia. In particular, the study addressed the following objectives: to determine the effect of product quality on the performance of target firms, to establish the effect of product size on the performance of target firms, to find out the effect of product line on the performance of target firms, and finally, to examine the effect of product design on the performance of target firms (Kenea, 2022).
The target population included four biscuit manufacturing firms operating from Addis Ababa, Ethiopia. A sample size of 161 respondents was selected to participate in the study. Data collection was done using questionnaires. Descriptive statistics including frequency, percentage, mean, and standard deviation were used to analyze the collected data. Pearson’s correlation analysis was used to assess the relationships between the variables under study. Multiple regression analysis was used to establish the effect of the independent variables on the dependent variable. The findings were presented in suitable tables as required (Kenea, 2022).
The results of correlation analysis indicated that product quality had a moderate, positive, and significant relationship with the performance of biscuit manufacturing firms in the study area; product size had a moderate, positive, and significant association with the performance of target firms; product line had a negative and weak association with the performance of the target firms; and product design had a moderate, positive, and significant relationship with the performance of target firms (Kenea, 2022).
The results of the multiple regression analysis indicated that 56.1% variance in the dependent variable (performance of biscuit manufacturing firms) was explained by the independent variables (product quality, product size, product line, and product design). The results showed that other factors remaining constant: product quality had a positive effect on firm performance; product size had a positive effect on firm performance; product design had a positive effect on firm performance; while product line had a negative and insignificant effect on firm performance. According to the results, all factors remaining constant, product quality explained 22% variance in firm performance, product size explained 21.5% variance in firm performance, and product design explained 25.1% variance in firm performance (Kenea, 2022).
This study examined the effect of new product development strategies on marketing performance in firms operating in the food and beverage sector. The specific objectives of the study included the following: to determine the effect of new product quality on the marketing performance of target firms; to establish the effect of new product packaging on the marketing performance of target firms; and lastly, to find out the effect of new product branding on marketing performance in the target firms (Ogbor & Edeme, 2021).
The target population included six food and beverage firms operating in Lagos, Nigeria. The sample size for the study included 496 staff members from the identified firms. Data collection was done using a questionnaire. Descriptive statistics and regression analysis were used to process the collected data. The findings were presented using suitable tables as required (Ogbor & Edeme, 2021).
The results of the regression analysis indicated that 68% variance in the dependent variable (market performance of the target firms) was explained by the independent variables, that is, product branding, product quality, and product packaging. In particular, the findings showed that product quality, new product packaging, and new product branding had a positive and significant association with market performance in the target firms (Ogbor & Edeme, 2021).
This study investigated the influence of product development on the performance of public universities in Kenya. The target population included 33 public universities in Kenya. Respondents included staff employed in the target universities from the following departments: administration, finance, planning & strategy, and marketing. Data collection was done using a questionnaire. Data analysis was done using descriptive statistics (frequency, percentage, mean, standard deviation) and inferential analysis (correlation and regression analysis models). The results were presented using tables as required (Auma & Waithaka, 2020).
The results of regression analysis indicated that 73.6% of the variance in the performance of the target universities was as a result of the investigated aspects of product development. The results of correlation analysis showed that a unit change in product development by the concerned universities led to a corresponding improvement in organizational performance. Among the product development strategies adopted by the investigated universities are the introduction of parallel programs, the introduction of distance learning programs, and the introduction of virtual learning modules (Auma & Waithaka, 2020).
This study explored the impact of product development on the performance of middle-level chain stores in Nairobi County, Kenya. Specifically, the study sought to determine the effect of product development on the performance of Naivas, Tuskys, and Uchumi supermarkets located in Nairobi County. In other words, the study sought to determine the following: the effect of product innovation on market share, the effect of product innovation on sales volume, the effect of product innovation on market penetration, the effect of product development on customer satisfaction, the effect of product development on the company’s pre-tax profits, the effect of product development on cost management, and lastly, the effect of product development on innovation and creativity (Kyalo & Murigi, 2019).
That target population included the chain stores run by the said supermarkets in the target county. 65 staff members from the said chain stores were selected to participate in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics such as frequency, percentage, mean, and standard deviation (Kyalo & Murigi, 2019).
The results showed that innovation by the target chain stores had led to increased market share; product development had resulted in increased sales volume; product innovation had led to improved development index; product development had led to increased market penetration; product development had caused an increase in the company’s pre-tax profits; product development had led to improved cost management; and finally, product development had led to increased innovation and creativity in the target chain stores (Kyalo & Murigi, 2019).
This study sought to investigate the impact of product innovation on organizational performance in Lagos, Nigeria. In particular, the study sought to address the following objectives: to determine the effect of product innovation on an organization’s profitability, to find out the influence of product innovation on market share, and lastly, to establish the effect of product innovation on the competitive strength of the organization (Onikoyi, 2017).
This was a case study research that targeted Nestle Nigeria Plc. The sample size included 340 staff members from the target company. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics such as frequency, percentage, mean, and standard deviation. Regression analysis was done to establish the effect of the independent variables on the dependent variable. The results were presented using suitable tables as deemed fit (Onikoyi, 2017).
The results of regression analysis showed that product innovation had a positive and significant impact on organizational profitability. Specifically, it was shown that product innovation was responsible for 21.1% variance in organizational profitability. The findings also indicated that product innovation had a positive and significant impact on market share. In particular, product innovation was responsible for 18.1% variance in organizational profitability. Last but not least, the results of Pearson correlation analysis showed that product innovation had a positive and significant relationship with the competitive strength of the organization. This means that product innovation is a function of an organization’s competitive strength (Onikoyi, 2017).
This study examined the effects of product development on the operating performance of firms in the textile industry in Taiwan. In particular, the study sought to address the following objectives: to determine the effect of product development on operational performance in the target firms; to find out the effect of product development on financial performance in target firms; to establish the effect of product development on organization effectiveness in the target firms; to explore the moderating effect of gender on the relationship between product development and operating performance in target firms; to examine the moderating effect of age on the relationship between product development and operating performance in target firms; to investigate the moderating effect of occupation on the relationship between product development and operating performance in target firms; to determine the moderating effect of educational background on the relationship between product development and operating performance in target firms; and to find out the moderating effect of disposable income on the relationship between product development and operating performance in target firms (Liu et al., 2014).
This was a case study kind of research that targeted a company called Tainan Spinning, based in Taiwan. Consequently, a sample size comprising 450 respondents, including supervisors, employees, and customers, was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics were employed to analyze descriptive variables of the study. Regression analysis was used to explore the relationship between the independent variables and the dependent variable of the study. The results were presented in suitable tables as needed (Liu et al., 2014).
The findings of the correlation analysis revealed that product development had a positive and significant effect on operational performance in the target firms, product development had a positive and significant impact on the financial performance of target firms, and product development had a positive and significant impact on organizational effectiveness. The results also demonstrated that gender, age, occupation, educational background, and disposable income moderated the relationship between product development and operating performance in the target firms (Liu et al., 2014).
This study investigated the impact of the new product development process on business performance in Lagos, Nigeria. Specifically, the study addressed the following objectives: to determine the effect of strategy on new product development plan; to establish the effect of personnel skills on new product development plan; to find out the effect of management involvement on new product development plan; to examine the effect of organizational culture on new product development plan; to determine the effect of new product development plan on product quality; to assess the effect of product quality on business performance; and lastly, to find out the effect of new product development plan on business performance (Udegbe, 2014).
The target population included 180 manufacturing firms operating from Nigeria. 360 respondents were selected from the target industries to participate in the study. Questionnaires were used to collect primary data from the respondents. Data analysis was done using descriptive statistics such as frequency, percentage, mean, and standard deviation. Correlation analysis was used to establish the association between study variables. The findings were presented using suitable tables as required (Udegbe, 2014).
The findings revealed that business strategy had a positive and significant impact on the new product development plan; personnel skills had a positive and significant association with the new product development plan; there was no significant association between management involvement and the new product development plan; organizational culture had a positive and significant association with the new product development plan; new product development had a positive and significant association with product quality; product quality had a positive and significant association with business performance; and the new product development plan had a positive and significant association with business performance (Udegbe, 2014).
This study explored the impact of product development on the performance of firms in Nigeria. The specific objectives of the study included the following: to determine the moderating role of consumers’ perception of product innovation on the relationship between product development and organizational performance; to establish the moderating role of creativity/quality of the innovation process on the relationship between product development and organizational performance; and lastly, to find out the effect of product development by creative innovation on organizational performance (Udegbe & Udegbe, 2013).
The target population included 120 manufacturing firms operating in Lagos, Nigeria. 180 respondents were selected to participate in this study. They included product development managers, operations managers, and marketing managers. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics (percentage, frequency, mean, and standard deviation). Regression analysis was used to establish the effect of independent variables on the dependent variable. The findings were presented in suitable tables as deemed fit (Udegbe & Udegbe, 2013).
The findings revealed that product/quality had a positive and significant effect on organizational performance in the target firms. The results also demonstrated that the impact of product development on organizational performance was higher when consumers’ perception of product development was higher and vice versa. It was also established that the impact of product development on organizational performance was high when creativity/quality of the innovation process was high and vice versa. Last but not least, the findings also showed that the impact of product development on organizational performance in the target firms was high when creative innovation was high and vice versa (Udegbe & Udegbe, 2013).
Citation
Auma, S.N. and Waithaka, T. (2020). Influence of product development on organizational performance of public universities in Kenya. International Research Journal of Business and Strategic Management, 1(1), 71-79.
Dagnaw, M.A., Gebreab, F.T., Melisew, C.G., Kiros, H.W., Tekle, K.C., and Ridzki, M.M. (2025). The effect of product development on operational performance: a case study of Ultimate Motors. Journal of Transnational Universal Studies, 3(1).
Influence of product development strategy on the performance of Nzoia Sugar Company in Kenya. International Journal of Social Science and Humanities Research, 11(4), 93-104.
Kenea, D.A. (2022). The effect of new product development on organizational performance: the case of biscuit manufacturing companies in Addis Ababa, Ethiopia. Annals of the University of Craiova for Journalism, Communication and Management, 8.
Kyalo, C.M., and Murigi, E. (2019). Influence of product development strategy on performance of middle-level chain stores. International Journal of Research and Innovation in Social Science, 3(12).
Liu, C.M., Lin, K.W., and Huang, C.J. (2014). Effects of product development on operating performance in the textile industry. Anthropologist, 17(1), 157-163.
Mugambi, Z. and Oduor, P.A. (2023). Effect of new product development on customer service quality in commercial banks in Nairobi County. International Academic Journal of Human Resource and Business Administration, 4(3), 91-100.
Ogbor, J.O. and Edeme, N.C. (2021). New product development strategies and marketing performance in the Nigerian food and beverage industry. Journal of Business and Management, 23(9), 12-23.
Omollo, E.A. and Sije, A. (2023). Influence of product development strategy on the performance of Nzoia Sugar Company in Kenya. International Journal of Social Science and Humanities Research, 11(4), 93-104.
Onikoyi, I.A. (2017). Impact of product innovation on organizational performance (a survey of Nestle Nigeria Plc). Journal of Marketing and Consumer Research, 37.
Udegbe, S.E. (2014). New product development process and its impact on business performance in Nigeria. The Business & Management Review, 4(4).
Udegbe, S.E. and Udegbe, M.I. (2013). Impact of product development and innovation on organizational performance. International Journal of Management and Sustainability, 2(12), 220-230.
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