Abstract

The aim of the article. Probability of successful innovative decision-making on the early stages of new product development (NPD) process can be increased by abandonment from further development of the decisions deliberately doomed to failure. Such decisions can be identified by certain values of some critical characteristics of innovative system. Ultimate impact of some features of innovative system, e.g. state and characteristics of a new product, innovator, market, NPD process etc. is generally acknowledged though no methodology of the practical taking into account the values of these factors for estimation of project feasibility and risks is available. To great extent it can be explained by a variety of indicators by which the influence of these factors is quantitatively appraised. A purpose of this research was to substantiate the possibility of method application of coefficients (equivalents) of project success confidence for feasibility estimation and selection of innovative projects on the early NPD stages on the basis of comparison of values of these coefficients for actual values of innovative system characteristics for a certain project with a priori confidence coefficients for successful projects and to develop a methodology of determination the priori values of these confidence coefficients for different variants of empiric data presentation concerning impact of success driving factors on project results. The results of the analysis. An advantage of method of confidence coefficients as method of innovative project feasibility estimation and selection consists in the possibility of recalculation of various quantitative indexes (probability of success, failure, risk etc.) and qualitative statements of experts as well as quantitative statistical data referring to probable influence of the critical factors on project success to the value of the confidence coefficient. Extending the estimation of confidence coefficients to the revealed factors of project success presented as attributes of innovative system constituents makes it possible to apply the method of equivalents of confidence for feasibility investigation and selection of innovative projects on the early NPD stages on the basis of information about the value of these attributes. For practical realization of this approach it is necessary to define a priori values of the coefficients of confidence of successful realization under the predefined favorable values of factors-properties on the basis of results of numerous previous studies. These values can be applied as reference values in project feasibility study and risk appraisal. Under the assumption of the sense of coefficient of confidence as difference between «true» and «false» methods of recalculation of various quantitative indexes appraising influence of the attributes of innovative system constituents to the values of the a priori coefficients of confidence referring to these attributes were proposed. Notably the recalculation methods were substantiated and realized for cases in which the impact of critical factors-attributes on project success was estimated after: a ratio of  successful and failed projects in which the constituents of the innovative system had certain properties; a share of companies with different efficiency of innovative activity new products of which possess certain properties; a share of successful projects subject to properties of the innovative system constituents; objectively or subjectively determined probabilities of success for projects with different  properties of the innovative system constituents; subjectively appraised relevancies of critical project success; coefficients of correlation between the degree of project success and value of certain success factors; coefficients of regressive model of project success with properties of the innovative system as variables. Conclusions and directions of further researches. Generalization of conducted calculations resulted in obtaining the values of priori coefficients of confidence for such properties of the innovative system as meeting customer needs; uniqueness, novelty and extent of customer benefit; better customer value for money; fitting the core innovator competencies, such as marketing, technology and manufacturing; matching the innovator strategy; potential of new product market; organizational climate and some others. Calculated values of priori confidence coefficients enable the innovative project feasibility estimation on the early NPD stages and, in case the project is judged as feasible, may be useful for risk premium evaluation.   

Keywords: coefficient of confidence, innovative project, critical success factors, innovative system, innovative product, innovator

JEL Classification: O22, O29, D81, M20.

Cite as: Hlinenko, L. (2015). Estimation of the reference values of coefficients of confidence in innovative project success. Marketing and Management of Innovations, 3, 118-128. https://doi.org/10.21272/mmi.2015.3-10

This work is licensed under a Creative Commons Attribution 4.0 International License

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