Determinants of competitive advantage: The roles of innovation orientation, fuzzy front end, and internal competition

Abstract

Although innovation orientation is identified as an effective strategy to enhance an enterprise's competitive advantage, its mechanism remains to be investigated. This study divides the fuzzy front‐end (FFE) activities of new product development (NPD) projects into idea generation, concept definition, and initial planning and investigates the transmission path between innovation orientation and competitive advantage through these three activities. Additionally, we explore the moderating role of internal competition. This empirical study is based on 261 respondents from China. The results suggest that innovation orientation has a positive impact on FFE activities, and these promote competitive advantage. The mediating role of FFE activities in the relationship between innovation orientation and competitive advantage is confirmed. The results also reveal that internal competition regulates the relationship between innovation orientation and FFE activities in an inverted U‐shape. The study further reveals the internal mechanism of innovation orientation on competitive advantage and provides a deeper understanding of the link between them. The study guides research and development (R&D) management practitioners in managing FFE activities and rationalizing internal competition to enhance NPD success.