New product and emerging business growth in Kwara State
| Pages | 207-227 |
| Published date | 11 July 2016 |
| DOI | https://doi.org/10.1108/WJEMSD-09-2015-0038 |
| Date | 11 July 2016 |
| Author | Seun Oladele,Femi Oladele |
| Subject Matter | Strategy,Business ethics,Sustainability |
New product and emerging
business growth in Kwara State
Seun Oladele
Department of Business and Entrepreneurship,
Kwara State University, Malete, Nigeria, and
Femi Oladele
Department of Accounting, Bowen University, Iwo, Nigeria
Abstract
Purpose –The purpose of this paper is to examine the effect of new product on growth of emerging
businesses (EBs) through sales volume and market share.
Design/methodology/approach –The study surveyed 137 EBs in Kwara State. Two hypotheses
were formulated and tested using correlation and regression analyses.
Findings –Results show that service industry is dominant among EBs while the manufacturing
industry trails. Many EBs are aware of the complexities of new product, its development and
contribution to increasing sales volume, market share and ensuring competitive advantage with
apparent infrastructural deficiencies. Test results show that there is a significant positive relationship
and effect on sales volume and market share.
Originality/value –Encouraging EBs to step up and focus on improving product/service portfolio to
transform their fortune is explored giving focus to the benefits of increasing sales volume and
market share.
Keywords Growth, Emerging businesses, Kwara, New product
Paper type Research paper
1. Background and statement of the problem
Emerging businesses (EBs) are rather describable than defined, due to the fact that
common definitions are offshoots of statutory and/or regulatory frameworks and
institutional underpinnings, which describe EBs based on ownership structure that is,
mostly privately owned, small number of employees, low revenue/turnover and
available starting and running financial resource. Finance is no longer favored as a
major factor among others affecting EBs in Nigeria as there are many avenues for
accessing fund. This exposes a fundamental ordeal as access to finance
(United Nations, 2001). Proponents of this view argue that government has done and
is doing enough to make finance available, but entrepreneurs are having issues
accessing the fund due to improper accounts, evidence of succession plans, evidence of
large-scale commercialization plans and inability to meet other requirements. Evidence
from industrialized and developing countries show that EBs deliver a fundamental
contribution to economic development, as they are major vehicles for the generation of
employment and income (UN, 2007). In the same vein statistics (Deros et al., 2006) show
that EBs even constitute a higher percentage of registered ventures carrying on
business activities compared to large companies. Statistics from Ogechukwu et al.
(2013) also reveal that about 90 percent of the manufacturing/industrial sector in
Nigeria (in terms of number of enterprises) is established/managed by EBs, invariably World Journal of
Entrepreneurship, Management
and Sustainable Development
Vol. 12 No. 3, 2016
pp. 207-227
©Emerald Group Publis hing Limited
2042-5961
DOI10.1108/WJEMSD-09-2015-0038
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2042-5961.htm
The authors are grateful for the immeasurable inputs of Professor Sunday O. Otokiti,
Dr Muritala O. Awodun, Dr Hakeem Ajonbadi and the two anonymous reviewers whose review
comments reshaped the work to become a significant research contribution.
207
New product
and emerging
business
growth
significantly tying their efficiency to the efficiency of the nation. In Nigeria, though EBs
account for the majority of total businesses in various areas, they face challenges
relating to huge gaps in infrastructure, poor financial support and credit environment,
high levels of unskilled workforce, and low investment commitment to bring pilot
plants to commercial scale meanwhile most EBs in Nigeria serve as suppliers for large
companies. Therefore, any lack of product quality could adversely affect the
competitive ability of the larger organization (Deros et al., 2006).
New product development (NPD) is the complete process of bringing new product/
service to the market rang ing from the generation of p roduct idea to the
commercialization of the product or service. Popular media is awash with indications
that for EBs to maintain competitiveness under the current economic state of affair s,
apart from the need for a proactive management team, adequate resources and social
infrastructure, there must be a continuous and consistent flow of new products/services
or improvement on existing products that can meet up with the changing customer
demands. This can significantly make EBs engage the privilege of competitive
advantage. Udegbe (2014) highlighted that technological evolution, the highly
competitive environment and the varying (diversified) customer needs, have forced
enterprises to search for and apply new product development processes (NPDPs) that
could improve their product unique characteristics, quality and business performanc e.
Increasing scale of international trade provides consumers with a wide range of
options/choice of products/services and induces frequency in changing taste and
demands, which leaves many EBs very exposed and prone to difficulty, as many are
limited in terms of resources, technological facilities and opportunities to favorably
compete for market share.
In developing new products, the customers’interest is paramount just as the
common parlance that customer is king. The ability to catch up and exceed custome r
demand for quality product/service can deliver to a firm significant competitive
advantage. This view was corroborated by Kusar et al. (2004) highlighting that EBs can
successfully enter the global market if they can fulfill the customer needs regarding
features and quality of products. Given this trend, this research builds on existing
literature on the types of new products developed by EBs, how firms have used NPD to
increase market share and sales volume, particularly the potency of the NPD processes
adopted by EBs in Kwara State and its effect on sales volume and market share.
The process of developing new products that will confer competitive advantage on a
firm is quite complex, time consuming, capital intensive and resource intensive
especially at the design stage. This places burden on EBs that are willing but not able
to commit the requisite resources needed to develop such products/services. Literature
is rife with NPD in large-scale industries, but not so much for EBs (Hermelo and
Vassolo, 2007). In addition, there are few empirical studies to identify the critical
success factors for product development in EBs.
The ultimate objective of NPD teams is their superior marketplace success of the
new product (Akgun et al., 2006). This can only be possible with requisite knowledge,
resources and information about the processes involved, in which many EBs are
deficient and often carry out the NPD process less completely or thoroughly than larger
companies (Woodcock et al., 2000). This has contributed to limited growth of EBs in
Nigeria as many seem scared of investing in radical innovations and would rather
implement incremental innovations, i.e. improvement/adjustments on existing
products. This, by implication may limit their market share and sales level and at
most only strengthens and/or retains their customer loyalty (without necessarily
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