Strategy Type and Product Innovation: Multinationals and Italian SMEs competing on yogurt

Purpose – The purpose of this research is to present a detailed analytical (qualitative) study of new ―health-enhancing‖ food products. The paper investigates if and how local SMEs compete with multinational by differently handling the New Products Development (NPD) process. A research experiment is performed in the innovative niche of ―health-enhancing‖ yogurts; data availability is limited to the Italian market (as a result of a national research grant) and consequently the nature of the study it is mainly explanatory and introductive. Approach – The analysis is based on an original NPD framework which is operationalized isolating from literature four key strategic variables and other support variables. The theoretical framework is next matched with seven healthy-food categories and seven yogurts marketed by multinational as well as local SMEs in the Italian food retail channel. Findings – Each of the competitors tends to present its offer as unique and differentiated. They each try to formulate new product claims and to enlarge the boundaries of the competition targeting expressed and unexpressed consumer‘s needs. Practical implications – The product development trend highlights how innovations may move towards ventures between drugs companies and cosmetic companies as industry‘s players look for new ways to be perceived as different. Originality/value – The research provides an in-depth analysis of the emerging strategies in the food industry using the NPD theories and referring to a national contest (Italy) where the attention to the food quality is worldwide well-known and the appeal of the so-called ―functional food‖ seems to be mild and low-investigated.