The effect of customer-centric strategy and structure alignment on new product portfolio innovativeness and firm performance

Abstract

The authors build on configuration theory to argue that the alignment of a customer-centric strategy and a customer-centric structure allows a firm to increase firm performance through new product portfolio innovativeness. They further contend that the influence of customer-centric strategy-structure alignment on new product portfolio innovativeness can be amplified by increasing the firm’s strategic resource emphasis toward R&D, relative to advertising. The model is tested using a 9-year panel dataset (2011–2019) involving 695 firm-year observations comprising 8,899 product launches across 91 firms. The findings indicate that new product portfolio innovativeness mediates the positive effect of customer-centric strategy-structure alignment on firm performance, and that the increase in strategic resource emphasis toward R&D amplifies the effect of customer-centric strategy-structure alignment on new product portfolio innovativeness. Implications for theory and practice are discussed.