Questionnaire Items and Measurement Model Parameters

transcript

Appendix: Questionnaire Items and Measurement Model Parameters 183

Appendix: Questionnaire Items and Measurement Model Parameters

Constructs and indicators

Environmental complexity

In the last five years, how easy was it to predict the effect of events and trends on your firm in the following areas? (1 = very easy, 5 = very difficult)

Innovations related to product design and/or functionality

Potential trends related to customer preferences

Market entry or exit by competitors

Innovations related to product marketing/sales strategies

Cost and/or quality of inputs (e.g., raw materials, semi-finished products)

Strategies of competitors

Environmental dynamism

To what extent do you agree with the following statements with respect to the dynamism of your market environment? (1 = disagree, 5 = agree)

Our customers tend to look for new products all the time

We are witnessing demand for our products and services from customers who never bought them before

New customers tend to have product-related needs that are different from those of our existing customers

Resource and coordination flexibility

To what extent do you agree with the following statements with respect to your flexibility compared to that of your competitors? (1 = disagree, 5 = agree)

The range of alternative products that we can develop, manufacture, distribute and market, is larger

Adaptating our product strategy flexibly (e.g., design, quantities) is easier for us

The use of modular product development and manufacturing processes makes us more flexible

The use of standardized, electronic interfaces with our customers and suppliers makes us more flexible

The cooperation with other firms (e.g., strategic alliances, networks) makes us more flexible

Loadings

Variance Inflation Factors (VIF)

184 Appendix: Questionnaire Items and Measurement Model Parameters

Constructs and indicators Loadings Variance Inflation Factors (VIF)

Quick, cost-efficient product development process To what extent do you agree with the following statements with respect to your product development process? (1 = disagree, 5 = agree)

For most of the products we have developed over the last five years, the 0.37 1.10 most important product characteristics were already set at the beginning of the product development process

Over the last five years, we have frequently reacted to competitors' innovations by quickly changing our product portfolio

Our product development process is less costly than that of most companies in our line of business

When it comes to the development and introduction of products, we are quicker than most companies in our line of business

Product development process focused on creativity and innovation To what extent do you agree with the following statements with respect to your product development process? (1 = disagree, 5 = agree)

When it comes to product development, we are better than our competitors at anticipating future customer needs

Our product introductions over the last five years have significantly influenced our line of business

The products we have developed over the last five years were unique on the market at the time they were introduced

Isolating mechanisms

To what extent do you agree with the following statements with respect to your capabilities and resources? (1 = disagree, 5 = agree)

It is difficult for outsiders to identify the capabilities and resources we use 0.40 1.11 to distinguish ourselves from competitors

Our business units and/or functional units (e.g., marketing, R&D, sales) are 0.71 1.44 closely intertwined and support each other, thereby improving our competitiveness

Compared to our major competitors, our capabilities and resources com- 0.88 1.58 plement each other extremely well

Our competitors could only imitate our distinctive capabilities and re- 0.61 1.35 sources if they invested the same amount of time in building them as we do

Constructs and indicators Loadings Variance Inflation Factors (VIF)

Our most important capabilities and resources require a critical mass (e.̂ with respect to firm size, sales network, customer awareness), without which they could not be imitated

0.28 1.24

Table 14: Measurement model parameters: Formative indicators

Constructs and indicators

Industry foresight

Over the last five years, have your firm's efforts to identify trends been adequate to contribute to... (1 = not adequate, 5 = adequate)

... its awareness of problems and opportunities?

... its knowledge of its own strengths and weaknesses?

... its awareness of environmental conditions?

... its early identification of changing customer needs?

Brand strength

Relative to your competitors, how would you rank your brand (or brands) in terms of the following attributes? (1 = weaker, 5 = stronger)

Brand prestige

Quality (e.g., design, workmanship, materials) that customers associate with our brand(s)

Trust in our brand(s)

High level of awareness of our brand(s) among existing and potential customers

High loyalty of our customers to our brand(s)

Internal transparency

To what extent do you agree with the following statements? (1 = disagree, 5 = agree)

In this firn, it is easy to talk with virtually anyone you need to, regardless of rank or position

There is ample opportunity for informal "hall talk" among individuals from different departments in

1 this firm

Loadings

Convergent validity (AVE)

Composite reliability

Discriminant validity*

Constructs and indicators Loadings Convergent validity (AVE)

In this firm, employees from different departments 0.91 feel comfortable calling each other when the need arises

Ability to adapt to change 0.80

Overall, our firm has adapted well to external 0.89 change over the past five years

Our firm will be able to react adequately to future 0.90 change

Ability to create change 0.87

Our firm has succeeded in shaping its market envi- 0,95 ronment significantly over the past five years

Our firm will be able to positively influence its mar- 0.91 ket environment in the future

Compo- Discrimi-site nant reliabili- validity* ty

0.89 0.25

0.93 0.13

* The entry in each row is the highest squared correlation of the particular construct with another construct. This value needs to be below the one of AVE according to Fomell/Larcker 1981.

Table 15: Measurement model parameters: Reflective indicators

Firm performance

How would you rate the performance of your firm relative to competition in the past 5 years on each of the following dimensions? (1 = worse, 5 = better)

How important are the following dimensions for the long-term performance of your firm? (1 = not important, 5 = important)

Improvement of firm value Size of market share

Return on assets Sales growth

Retention of existing customers Return on sales

Acquisition of new customers Financial liquidity

Creation of customer satisfaction Retention of particularly qualified employees

Development of market share Cost management

This composite measure was built by multiplying the relative performance scores with the importance scores, and dividing the result by the sum of the importance scores.

Scope of areas being scanned; scope of areas for which forecasts are produced

How would you describe the search of your firm for information about the following areas? (Historical & current developments: 0 = Our search for information is mainly ad hoc, 1 = We systematically search for information; Future developments: 0 = We do not produce forecasts for this area, 1 = We produce forecasts for this area)

Product innovation and development Labor market conditions

Marketing innovations Demographics and social conditions

Trends in customer needs Political conditions and government regulations

Entry and exit of competition General economic conditions

Cost and/or quality of inputs Strategies of competitors

Technological conditions

The two composite measures were built by counting the number of areas that were (i) scanned systematically and (ii) for which forecasts were produced, respectively.

Frequency of scanning

For those areas, about which your firm systematically searches for information, please indicated the frequency of the information search. (In the on-line version of the questionnaire, only those areas appeared that the respondent had previously indicated his or her firm scanned systematically.)

(1 = seldom (yearly), 5 = continuously (daily))

Product innovation and development Labor market conditions

Marketing innovations Demographics and social conditions

Trends in customer needs Political conditions and government regulations

Entry and exit of competition General economic conditions

Cost and/or quality of inputs Strategies of competitors

Technological conditions

This composite measure was built by averaging the scores for all areas that were scanned systematically.

Scope of sources being used for scanning

How often does the top management of your firm use the following internal information sources to

get a sense of current and future trends?

Conversations with immediate peers or Computer/MIS reports or accounting (P&L) subordinates (H) reports (L)

Conversations with salesmen, staff specialists, or Special studies and newsletters (L)

other employees (H)

Formal meetings with the top management team (H) Emails, memos and letters from employees (L)

Formal meetings with other employees (H) Analysis of computer databases (L)

How often does the top management of your firm use the following external information sources to get a sense of current and future trends?

Attendance at conferences or trade shows (H) Newspapers and magazines (L)

Letters and phone calls from outsiders (H) Government notice or publications(L)

Personal contacts with suppliers, customers, and Co-operations with other firms, universities, or competitors (H) other research institutions (H)

Personal contacts with friends, colleagues, and Commercial databases (L) associates in other companies (H)

Market surveys (L) Consulting or information providers (H)

This composite measure was built by counting the number of internal and external information sources that were used at least frequently, i.e., which were given a score of 3 or above.

Intensity of use of high rich information sources

This composite measure was built by counting the number of internal and external high rich information sources (marked "H) that were used at least frequently, i.e., which were given a score of 3 or above.

Table 16: Measurement Model Parameters: Composite Measures

Strategy Types

To what extent do you agree with the following statements about the strategy of your firm?

(1 = disagree, 5 = agree)

Compared to our competitors, we search more intensively for opportunities to actively shape our market environment

We believe we can actively influence customer preferences

We usually aim at being the first ones to introduce new brands/products to the market, even if the brand/product may fail

It is important for our firm to identify changes in customer needs early on in order to set new product trends

To be successful in the long run, we believe that firms have to be able to anticipate customer preferences even before customers can express them by themselves

We only adjust our product portfolio and/or features of existing products when a trend has proven to be substantial

In our view, being a first mover with respect to the introduction of new products usually does not pay off in our market environment

In our view, a quick adaptation to changes is more advisable than trying to influence the market environment to one's own benefit

We try to differentiate ourselves from competition rather by an attractive price-value relationship than by more innovative products

The two groups of firms were built by comparing their average scores on the first five items with their average scores on the last four items. Firms were assigned to the "create change" group if their average score on the first five items exceeded their average scores on the last four items and vice versa. Firms with equal average scores on both item batteries were dropped from the group comparison analysis.

Table 17: Indicators of Strategy Types

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