The Effect of New Product Development on Organizational Performance: the case of Biscuit Manufacturing Companies in Addis Ababa.

Abstract

New product development has become potentially valuable way of securing competitive advantage by improving organizational performances. The main purpose of this research is to assess the effect of new product development on organizational performance in the case of biscuit manufacturing companies in Addis Ababa. Quantitative research approach, descriptive research design and cross-sectional field survey was applied for this study. Probability sampling technique specifically stratified random sampling method was applied in order to select sample respondents from the total population. Primary data was collected using structured questionnaire. Data were analyzed using descriptive statistics (mean and standard deviation) and inferential statistics (Pearson correlation and multiple linear regression) with the help of SPSS Version 20. The findings indicated that three of the independent variables such as product quality, product size and product design have moderate and positive relationship and; significantly affects the organizational performance. Whereas, product line which is the fourth independent variable have weak relationship and insignificant effect on the performance of target organizations. Therefore, the new product development dimensions product quality, product size and product design affect the profitability and sales volume, which in turn affects the performance of the case company. In other word, the overall performance of the case companies has affected by their new product development. Based on the findings, the researcher recommends that biscuit manufacturing firms shall improve the quality of their product, respond to the dynamic changes in customers need in product size and product design through introduction of new products to improve the performance of their organization.