The impact of firm size and age on knowledge strategies during product development: A study of the drug delivery industry

Shanthi Gopalakrishnan, Paul E. Bierly

Research output: Contribution to journalArticlepeer-review

71 Scopus citations

Abstract

A successful new product development strategy involves the identification, development, and exploitation of key resources. Such exploitation of a firm's unique knowledge base ultimately leads to successful new products and, in turn, a sustainable competitive advantage. In this paper, we look at a firm's knowledge strategy along three dimensions, and examine the impact of firm size and age on the type of knowledge strategies used to build technological strength and competitive success. The three dimensions of knowledge strategy examined are: extent of emphasis on speed of learning, emphasis on internal versus external sourcing of knowledge, and the development of a broad versus a narrow knowledge base. Using a population of 27 firms from the drug delivery sector of the pharmaceutical industry, we found that firm size and age influenced the success of firm knowledge strategies. Interestingly, we found that the differences in the knowledge strategy dimensions between large and small firms and between old and young firms were not as great as expected. However, we found that firm size and age moderate the relationship between knowledge strategies and technological strength. In other words, firms that used appropriate knowledge strategies for their size and age optimized their technological strength. Concerning size, smaller firms that focused on faster learning and developing a narrow knowledge base were able to optimize technological strength. On the other hand, large firms that developed a broader knowledge base and focused on internal learning achieved similar success. Concerning age, younger firms that maintained connections to external sources of learning and developed a narrower, niche-based knowledge optimized their technological strength.

Original languageEnglish (US)
Pages (from-to)3-16
Number of pages14
JournalIEEE Transactions on Engineering Management
Volume53
Issue number1
DOIs
StatePublished - Feb 2006

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Electrical and Electronic Engineering

Keywords

  • Drug delivery industry
  • External sources of learning
  • Innovation speed
  • Knowledge strategies
  • Product development

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