Table of Contents

Handbook of Research on Strategy and Foresight

Handbook of Research on Strategy and Foresight

Elgar original reference

Edited by Laura Anna Costanzo and Robert Bradley MacKay

Drawing together a collection of 29 original chapters, the Handbook makes an invaluable contribution to theory and practice by stimulating disciplined, rigorous and imaginative enquiry into the relationship between strategy and foresight. Leading scholars in the field of strategic management are brought together to offer innovative and multi-disciplinary perspectives on the past, present and future of strategy formation and foresight. In so doing, they challenge research in four key areas: strategy and foresight processes; strategy innovation for the future; understanding the future; and strategically responding to the future.

Chapter 21: Interactions with Customers for Innovation

C. Annique Un and Alvaro Cuervo-Cazurra

Subjects: business and management, strategic management


* C. Annique Un and Alvaro Cuervo-Cazurra Introduction In this chapter we analyze how managers can interact with customers to identify their needs and preferences and create innovations that meet these needs and preferences. The creation of innovations that satisfy customer needs is crucial for the firm’s success (Teece, 1986). Despite several decades of research on this topic, it remains challenging for many firms (Hoopes and Postrel, 1999). In some instances, a firm launches a new product that it considers highly innovative but is disappointed by unexpectedly low sales as it missed the market. Despite being a new product with no rival, customers do not appreciate it and avoid it. In other instances, a firm may be surprised when an innovation performs above expectation in the market, but the firm is then unable to meet the unanticipated demand. In both cases, the firm faces a problem. In the first scenario, the innovative efforts of the firm are not rewarded by the market. In the second, the firm is unable to meet demand and may pave the way for competitors. To avoid both problems, the firm can benefit from interacting with customers. This helps it obtain knowledge needed to innovate the product in a way that improves its success in the marketplace (Flores, 1993; Griffin and Hauser, 1993). This interaction with customers helps the firm better manage the unexpected performance of the innovation by helping to better foresight the needs and preferences of customers. Such foresight goes beyond forecasting...

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