Combining Big Visions with Specific Demands : Exploring how product innovation can be managed  in order to support customization

Abstract: In complex and fast-paced times, management of innovation is suggested to explain the success of an organization, making managing innovation an important topic in strategy, organization and innovation literature. At the same time, the demand for customized solutions is increasing and the customers are becoming more important. A current example of an industry under transformational pressure experiencing this is the materials manufacturing and packaging industry, which this study addresses.  The combined need of increased research within the areas of innovation capabilities, innovation in a low-to-medium technology context and customization makes it difficult to know what innovation strategy to use in order to support customization. Therefore, the purpose of this thesis is to investigate how the process of product innovation in a fast-changing market can be managed in order to support customization. Data were collected through a qualitative single case study approach, where semi-structured interviews were conducted within the meal kit and online grocery industry, as well as from different areas within the packaging solutions division within a large incumbent materials and packaging manufacturing company.  The findings indicate that the more a manufacturing provider is able to integrate and coexist an innovation with individual customer's values and needs, the greater is the prospect for adoption. Involving customers also works to better handle fast changing markets and react to changing customer needs. There are possibilities for a manufacturing firm to charge premium prices for customized solutions if the perceived relative advantage is strong enough. Furthermore, the findings in this study indicate the importance of involving the production in an early stage of the product innovation process to ensure that the product is producible and diminish the risk that a new product will be unprofitable. Also, increasing the dialogue between the different functions could enable the organization to work proactively with complementing the current product portfolio with profitable products and counteract the negative consequences of customization.