Dissecting the Innovation Process of New Product Development in SME’s: Case Study Evidence on the Traditional Textile Industry

Abstract

Innovation is crucial in a company’s sustainability. In small-medium enterprises, innovation can be synonymous with the development of new products. This study charts small-medium enterprises’ new product development processes in the traditional textile industry, using qualitative methods with companies in two clusters of the batik industry. A coding process is used for processing the data. Using a contingency theory, the research successfully identified and explained the innovation process stages. In this industry, the stages of the new product development process are ideation, idea selection, product development, market testing and commercialization. The new product is an incremental innovation because of the owner’s dominant role in small-medium enterprises and the characteristics of the batik industry, such as being rich in traditional culture. By employing a contingency approach, this research fills the gaps in the previous research so that practitioners can effectively and efficiently develop new products which will be accepted by consumers