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Poor project strategy is one of the major causes of project failure. However, many projects do not adequately develop strategy leading to a poor basis in subsequent phases. Thus, implementation of project strategy is critical to the success of any project. The primary purpose of this study was to validate a model for assessing the relationships among implementation of project strategy, new product development (NPD) project outcomes, and market performance. The analyses suggest that implementation of differentiation, operational, and quality strategies may improve NPD project outcomes. The research results also imply that improvement in NPD project outcomes may enhance market performance, while it helps accomplish the market share and sales goals.

Project strategy is a direction in a project that contributes to success of the project in its environment (Artto et al., 2007, Milosevic, 1989 and Samset, 2003). Many studies have shown that project strategy may contribute to project performance in terms of cost, schedule, and operational characteristics (Anderson and Merna, 2003 and Srivannaboon and Milosevic, 2006). Thus, project strategy is critical to the success of all types of projects. The development of project strategy is one of the major tasks during project planning. As the strategy of a firm relates to the firm's aspirations to achieve a desired position in its competitive external environment, the strategy of a project relates to the project's aspirations to achieve a desired position in its competitive stakeholder environment (Artto et al., 2007 and Chaffee, 1985). Additionally, development of project strategy is the stage where project risk assessments are undertaken and the specific project execution methods are analyzed. Success during the subsequent phases of a project is highly dependent on the level of effort expended during this stage (Cho and Gibson, 2001). A project strategy should concern not only operative and tactical levels, but also the institutional level, and thereby enable a project's significant interaction with its context (Artto et al., 2007 and Morris, 1982). However, the literature has largely ignored the impact of project strategy on project success. In recent years, there has been a growing trend towards development of project strategy on new product development (NPD) projects. Some high-tech firms adopt the best industry practices for project strategy development in the attempt to reduce the cost and schedule of a NPD project. These companies also examine their operations for ways to improve innovation performance. However, since the importance of strategy can be rather intangible, this has slowed the implementation of project strategy. Accordingly, the importance of project strategy development has been one of the major issues for both industry and academic fields. Project strategy in many cases is not developed well for large and complex projects (Artto et al., 2007 and Chaffee, 1985). In other words, the large and complex projects suffer from poor strategy. Many studies indicated that one of the major challenges in NPD is also the development of project strategy. In order to understand the issue, there is a need for quantification of the associations among project strategy, NPD project outcomes, and market performance. Research on the relationships should offer guides to development of project strategy. The primary objective of this study was to validate a model for assessing the relationships among implementation of project strategy, NPD project outcomes, and market performance. A data collection tool was developed to assess project strategy adoption, NPD project outcomes, and market performance in Taiwan and Mainland China. The data analyzed in this study are project-specific, meaning the data are representative of the level of strategy adoption within a project. This research was designed to include strategies that were thought to have substantial impact on NPD projects. Based on previous studies (Anderson and Merna, 2003, Ansoff and Stewart, 1967, Artto et al., 2007, Dietrich and Lehtonen, 2005, Hauc and Kovač, 2000, Qureshi et al., 2009, Subramanian et al., 2007 and Thompson et al., 2007) and interviews with new product development practitioners, four types of strategies (differentiation, cost, operational, and quality) were used to investigate the association between project strategy implementation and NPD project success.

This research is the first to provide empirical evidence that supports the expectation of gaining significant benefits from implementation of diverse project strategies in new product development. This study adds to the literature in a valuable way. It validated a framework for assessing associations among project strategy implementation, NPD project outcomes, and market performance. It reveals the importance of implementing project strategy to improve NPD project performance and enhance market success of the new product. The research results also offer guides to achieve NPD project performance and increase new product advantage to improve market performance. The research findings indicate that implementation of differentiation, operational, and quality strategies is associated with NPD project outcomes in terms of schedule, quality, and innovation performance. These results are in line with previous studies in project management, which have shown that project strategy plays a crucial role in project success. Additionally, in agreement with previous studies (Sabourin and Pinsonneault, 1997, Collis and Montgomery, 1995, Prahalad and Hamel, 1990 and Porter, 1980), the research findings imply that implementation of differentiation strategy may improve innovation performance. The research results also show that improvement in NPD project outcomes may enhance market performance, while it helps accomplish the market share and sales goals. In other words, it may act as a catalyst for greater success in the market. The results are in line with previous findings (Chen et al., 2005, Schmidt and Calantone, 1998 and Tatikonda and Montoya-Weiss, 2001) in that improvement in NPD project success may gain a product competitive advantage, which results in product success in the market. Most of the research findings are in line with prior studies representing existing body of knowledge in strategy implementation. However, the results suggest that cost strategy implementation does not have significant influence on project outcomes. This indicates that while adopting differentiation, quality, and operational strategies yields significant results on NPD projects, cost strategy implementation may be appropriate for some projects. Thus, the need for cost strategy implementation (i.e., use new technology and equipment that can reduce development cost, reduce total development cost of the project, improve operational efficacy to minimize development cost, and conduct cost control) may be a project-specific issue. In other words, the association between cost strategy implementation and project outcomes may depend on job condition related variables (e.g., job satisfaction, job security, working hours, and information availability) and project characteristic related variables (e.g., time availability, complexity, team relationship, materials and supplies availability, and project duration). For example, project duration may act as a moderator between cost strategy implementation and project outcomes. Projects with longer duration may involve more complicated tasks, uncertainty, and high risk. This type of project usually involves diverse and complex requirements. It is not easy to manage the requirements and control the budget for projects with high complexity and uncertainty. Thus, short projects may be more likely to be successful in project performance when they experience a high level of cost strategy implementation than long projects. However, an objective for future study is to determine the moderating effect of job condition related variables and project characteristic related variables on the relationship between cost strategy implementation and project performance. While this study offers important insights into implementation of project strategy, there are some limitations. The targeted respondents were identified as product managers or senior individuals in R&D departments. In other words, this study employed a narrow functional perspective to analyze the issue. Although professionals in R&D departments play an important role in developing new products, they are not the only stakeholders involved in the new product development process. Future research may use broader cross-functional approach and measure strategy implementation from the viewpoints of customer, production, and marketing groups. It may focus on the joint consideration of the various perspectives. In addition, importance of strategy implementation from different viewpoints should also be investigated in future research. Another limitation is associated with evaluating the environmental factors. Like many previous studies (Lau et al., 2007, Rahim et al., 2002, Wei and Morgan, 2004 and Weng et al., 2010), this study is also based on the subjective perceptions of a single respondent. Thus, the reliability of survey relies on the truthfulness of the respondents and the expertise of the investigators in questionnaire design. A total of 269 NPD projects were investigated in the study. Thus, it is not an efficient way to use document review or action-based research to collect the necessary data or interview all team members participating in a NPD project. Although the data were based on subjective opinion, prior research suggested that subjective measurement allows rational comparisons among organizations operating in different situations (Ledwith, 2000). Respondents may be biased towards having their projects perceived positively, which may influence their evaluations of project success. However, this study was designed to eliminate mono-source bias. The mono-source bias was not a threat in this study for the following reasons: 1) this study attempted to select the right respondents who possess adequate knowledge and are capable of answering all of the survey questions, 2) third-party reports have been shown to be moderately consistent with self-reported measure (Van Dyne and LePine, 1998), and 3) the confirmatory factor analysis showed that the one-factor measurement model was a poor fit to the data (Podsakoff and Organ, 1986). In addition, because all the research data are self-reported and collected through the same questionnaire during the same period of time, a common method variance (CMV) may result in a systematic measurement error and may further bias the estimates of the true relationship between the theoretical constructs (Podsakoff and Organ, 1986). This study used the Harman's one-factor test to investigate the potential problem of common method variance, suggesting that common method bias was not considered a serious threat to this study. Although prior research argued that subjective measurement allows rational comparisons among organizations operating in different situations (Ledwith, 2000), objective measures should be used in future research to complement subjective measures.