Journal of Engineering, Design and Technology

Design-oriented strategy typology and innovation framework

Yen Hsu
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Yen Hsu , (2017),"Design-oriented strategy typology and innovation framework ", Journal of
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Design-oriented strategy typology Design-oriented

strategy
and innovation framework typology
Yen Hsu
Tatung University, Taipei, Taiwan
13

Abstract Received 3 September 2015

Revised 31 October 2015
Purpose – Using Taiwanese enterprises that produce computer and consumer electronics products as case Accepted 12 December 2015
subjects, this study aims to explore the effective product innovation strategies applied to cope with
competition in the global market and develop a competitive advantage. The product design strategies and
methods of companies that used different types of innovation strategies were then analyzed. Finally, a
mapping framework for product innovation and design strategies was proposed for enterprises in the
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computer and consumer electronics industry in Taiwan.

Design/methodology/approach – The two stages of this study were a questionnaire survey and case
studies. Stage 1: A questionnaire survey and literature review were performed to explore the innovation
strategies used by companies in the Taiwanese computer and consumer electronics industry. The purpose of
the literature review was to determine the definitions and content of innovation strategies. Stage 2: Design and
R&D managers were interviewed to explore the practical design strategies and approaches to product design
in the industry.
Findings – These four innovation strategies and ways of product design are closely related to the scale,
business type and product development conditions in enterprises. Notably, different innovation strategies
have different approaches to product design. Generally, product design emphasizes “new experience” in
aggressive innovation enterprises, “new value” in market innovation enterprises, “new service” in technical
innovation enterprises and “new positioning” in opportunity innovation enterprises. The findings of this
study provide a reference for product R&D and design in enterprises.
Originality/value – In recent years, the global market of computer and consumer electronic products has
been fiercely competitive. Therefore, only enterprises that can innovate, respond rapidly and maintain
advantages in product design can survive in the market. Hopefully, this case study of companies in the
Taiwan computer and consumer electronic industry can provide a reference for product R&D and design. The
findings of this study provide a reference for product R&D and design in enterprises, especially the Chinese
market.
Keywords Design, Product design, Innovation management, Design strategies,
Innovation strategy, Typology of strategy
Paper type Case study

1. Introduction
Taiwanese computer and consumer electronics products are noted for their modern
appearance, diverse functions and excellent quality. Globally recognized Taiwanese brands
include ACER, ASUS, Benq and HTC. However, the 2008 financial crisis had a large impact
on enterprises in many countries, including Taiwan. To maintain competitiveness, the
research and development (R&D) departments and product designers of these enterprises
must continually address the challenges of the changing market environment (Kim et al.,
2013; Souder and Song, 1997). Moreover, they must develop new products according to the
goals set in their innovation strategies (Gudem et al., 2013; Li et al., 2013; Ulrich and Journal of Engineering, Design
Eppinger, 2012). and Technology
Vol. 15 No. 1, 2017
According to Hamel and Skarzynski (2001), innovation has a large and long-lasting effect pp. 13-30
on the survivability of an enterprise. For an enterprise, constant and successful product © Emerald Publishing Limited
1726-0531
innovation and design provide the momentum required to ensure the growth of business DOI 10.1108/JEDT-09-2015-0053
 JEDT (Baxter, 1995; Hsu, 2013). Particularly during an economic depression, the rapid launching of
15,1 new products can help an enterprise maintain profitability and, in many cases, may even
help an enterprise turn a failure into a success (Aspara et al., 2011; Khan et al., 2013; Ulrich
and Eppinger, 2012).
In 2006, Businessweek published a list of the 100 most innovative companies in the world.
These companies had creative ideas and added value to their products, user interfaces and total
14 services (McGregor, 2006). In addition, case studies of enterprise innovation show that the
effective execution of product innovation or service development is not only essential for the
survival of an enterprise but is also a critical force for maintaining competitiveness (Anderson
and Markides, 2007; Davila et al., 2012; Veryzer and and Borja De Mozota, 2005).
During product innovation, close coordination among different layers of a strategic
hierarchy is essential for achieving the overall goals of the enterprise strategy (McKay et al.,
2012; Mustafa Kamal and Flanagan, 2012; Renee et al., 2007; Yakovleva et al., 2012).
Therefore, on the basis of the goals set in the innovation strategy, an enterprise must
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integrate its innovation resources and perform product design and development through
practical design activities that are well coordinated among all of its divisions (Sari et al., 2007;
Cabantous and Gond, 2011). This has motivated researchers to study how enterprises can
enhance new product development by effectively integrating innovation (Haeussler et al.,
2012; Huizingh, 2011; West and Bogers, 2014; Yang et al., 2012). Many scholars also claim
that integrated product design procedures can enhance performance in new product
development (Ali et al., 2013; Poetz and Schreier, 2012; Vinodh et al., 2012; Ulrich and
Eppinger, 2012).
Many studies have asserted that design can be an integral resource for an enterprise and
a crucial mechanism for integrating product development functions into the serial integral
value chain of an enterprise (Fouchal et al., 2014; Luh and Lin, 2012; Vinodh et al., 2012;
Vinodh and Rathod, 2014). Additionally, Hsu (2011, 2012) showed that Taiwanese
enterprises apply unique product design strategies and methods. However, the integration of
the innovation strategies and product design of enterprises is rarely studied, and collocations
of cases of innovation and design strategies in specific industries are limited.
This study explored the association between innovation and product design strategy in
Taiwanese computer and consumer electronics enterprises. Managers of computer and
consumer electronics manufacturing firms were interviewed to achieve the following goals:
• to determine the current status of innovation strategy execution in the Taiwanese
computer and consumer electronics industry;
• to compare the innovation and design strategies applied in these enterprises; and
• to propose a conceptual framework for mapping product innovation and design
strategies in the Taiwanese computer and consumer electronics industry.

2. Literature review
2.1 Innovation strategy
Innovation strategy refers to the capability of an enterprise to build an environment that
supports innovation and enables it to distinguish itself from competitors on the basis of the
unique products or services that it can offer to customers (Jackson et al., 2012). An enterprise
can use its resources and technology in different combinations to create different innovation
strategies, from which it can develop and apply innovation to achieve its policies and
enhance its performance (Clausen et al., 2011; Doloreux and Shearmur, 2013; Foray et al.,
2012; Martín-Alcázar et al., 2012). According to the literature, innovation strategies were
divided into three categories in this study:
 (1) An innovation strategy is classified as a technological innovation strategy if the ratio Design-oriented
of R&D spending to total revenue exceeds that of the majority of other companies in strategy
the same industry (Clausen et al., 2011). Moreover, companies that apply a
technological innovation strategy aggressively protect their trademarks, royalties
typology
and patent rights (Doloreux and Shearmur, 2013). They also often introduce new
technology to improve products or manufacturing procedures (Ulrich and Eppinger,
2012), and they constantly improve their production procedure and efficiency to
achieve their goals (Martín-Alcázar et al., 2012). 15
(2) An innovation strategy is classified as a product innovation strategy if enterprises
can offer innovative products or services (Andersson et al., 2012), redesign or
improve current products, extend current product lines or add new product lines and
launch unique products (Hassanien and Dale, 2012; Wang et al., 2012). Moreover,
products designed using these strategies are highly compatible with customer usage
and consumption patterns (Hsu, 2012).
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(3) An innovation strategy is classified as a management strategy if it is used by an

enterprise to adapt to environmental change, build and manage marketing channels
(Johne, 1999) and effectively solve customer complaints (Wu and Ho, 2014). Such
strategies also involve aggressively applying methods to improve the performance of
the enterprise, such as encouraging employees to innovate by providing a
competitive salary or employee benefits (Wu and Lin, 2011) and by using
performance evaluations to assess innovation outcomes achieved by the R&D
Department (Czarnitzki et al., 2011).

Table I lists the characteristics identified by Andersson et al. (2012), Clausen et al. (2011),
Czarnitzki et al. (2011), Doloreux and Shearmur (2013), Hsu (2012), Hassanien and Dale
(2012), Johne (1999), Martín-Alcázar et al. (2012), Ulrich and Eppinger (2012), Wang et al.
(2012), Wu and Ho (2014) and Wu and Lin (2011) that were used in this study to construct
variables for measuring innovation strategies. These theories were applied to analyze the
innovation strategies of enterprises on the basis of the results of a questionnaire survey.

2.2 Product design strategy

Product design strategy refers to the manner in which a company conducts new product
design (Castellion and Markham, 2013; Gudem et al., 2013; Vinodh et al., 2011). Olson (1994)
considered product design strategy as an effective means for achieving organizational
objectives by efficiently allocating and coordinating design resources. According to this
notion, Hsu (2011) claimed that design strategy and enterprise policy are mutually dependent
(Rajiv et al., 2014). On the basis of the three fundamental strategies included in the Porter
competition strategy (Porter, 1985), Mozota (2006) described goals for design strategy,
including design for cost, design for image and design for focus.
In a study of successful cases, Keeley (1992) proposed the strategic palette concept of
analyzing design strategy according to 12 strategic factors. Song and You (1999) argued that
design strategy is a practical response to the innovation activities of an enterprise. On the
basis of the strategic factors suggested by Keeley (1992) and Song and You (1999), Hsu (2012)
proposed 10 product design innovation factors and defined product design strategy as a
policy based on a series of related strategic properties established to achieve the innovation
goal of an enterprise and to help it achieve a competitive advantage by providing a unique
design.
According to the aforementioned concepts, design strategy can be considered an
approach to achieving the goal of product innovation in an enterprise. To achieve its
 JEDT Strategy Variables to measure Factor
15,1
Technical innovation The ratio of the amount of expense an enterprise spends on 1
R&D over the total revenue is higher than that of the other
companies in the same trade
Have a proper management system for the intelligent 2
copyright
16 Aggressive in patent application 3
Hold sufficient key technology and patents 4
The number of R&D personnel increased in the past three 5
years
Be able to improve R&D procedure to achieve the 6
company’s goal efficiently
Be able to produce and ship commodities quickly and 7
flexibly according to the temporary demands of the client
Introduce new technology to improve manufacturing 8
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process
Product innovation Faster in commercialize the new technology in industry 9
Be able to launch totally new products to the market 10
quickly
Possess unique and highly innovative new products 11
Be able to extend current product lines 12
New products or services offered can more satisfy the 13
customer’s needs than the competitors
Fast in redesigning current products and uplifting product 14
quality
Being the leader in the new product market 15
New product or technology launched is often copied by the 16
competitors
Managerial innovation Be able to effectively evaluate the R&D personnel’s 17
innovation output
Adopt salary, prize and welfare systems that can 18
Table I. encourage employees to innovate
Variables for Possess customer complaint disposal system to solve the 19
measuring innovation customer’s complaints effectively
strategies in Adopt suitable innovation strategies to cope with change 20
enterprises in the outer environment

performance goals, an enterprise must analyze customer needs and the influences of
competitors and must efficiently apply its core R&D capability through its design team
(Ali et al., 2013; Hsu, 2012; Vinodh et al., 2012). Taiwanese computer and consumer
electronics products feature modern product forms, innovative functions and
outstanding quality, and Taiwanese enterprises have introduced many widely
recognized products and brands to the global market (Engida and Mohd, 2011). On the
basis of the concepts of the product design strategy factors discussed by Song and You
(1999), Gudem et al. (2013) and Hsu (2012), design teams achieve the performance goal of
the enterprise by analyzing customer needs and competitor influences and utilizing the
core R&D ability of the enterprise to execute a design strategy (Hsu, 2011). The current
study applied the design strategy perspective proposed by Hsu (2012, 2013) in dividing
the product design strategies of enterprises into the following four dimensions:
strengthening R&D capacity, reducing production costs, ensuring product quality and
promoting the enterprise image.
 3. Methodology Design-oriented
The two stages of this study were a questionnaire survey and case studies. strategy
typology
3.1 Stage 1
A questionnaire survey and literature review were performed to explore the innovation
strategies used by companies in the Taiwanese computer and consumer electronics industry.
The purpose of the literature review was to determine the definitions and content of
innovation strategies. Table I shows the dimensions and variables used to design the
17
questionnaire for measuring innovation strategies.
The subject pool comprised 1,000 product development departments of electronics and
computer companies in an industry database. Thirty of these companies were used for a pilot
test, the results of which were then used to refine the questionnaire survey. After initial
contact and follow-ups, 293 questionnaires (29.3 per cent of the total distributed) were
collected for data logging.
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On the basis of the 20 innovation strategy factors, the questionnaire samples were
grouped according to the strategy types to facilitate characterizing the samples. This study
applied a two-stage cluster analysis (Punj and Stewart, 1983; Li et al., 2011). First, Ward’s
method of cluster analysis was used to identify the optimal cluster number (which was four)
for the 293 samples. Second, the K-means method of nonhierarchical cluster analysis was
applied. Beginning from the centers of the four clusters determined by the hierarchical
cluster analysis, the samples were reassigned to the nearest center. The samples were then
divided into four innovation strategy types according to the results. Table II shows that 68
represented the Aggressive type, 62 represented the Market type, 85 represented the
Technical type and 78 represented the Opportunity type.

3.2 Stage 2
Design and R&D managers were interviewed to explore the practical design strategies and
approaches to product design in the industry.
3.2.1 Subjects. Three companies were randomly selected for each innovation strategy
specified in Stage 1. In total, 12 product R&D managers or creative directors were
interviewed. Table III lists the titles and departments of the interviewees and their major
products.
3.2.2 Survey questions. A semi-structured questionnaire was used to prepare for the
questions discussed in the interview. The content of the survey included the innovation and
R&D organization, impacts on product designs of market competitors, advantages of
and policy for responding to market competition, methods for coordinating R&D divisions
and strategies and methods for implementing R&D innovation and product design.
3.2.3 Interview procedure. Each enterprise selected for an interview was called in advance
to make an appointment and to ensure that the interviewee clearly understood the purpose of
the interview. All interviewees completed their interviews and provided the requested data.
3.2.4 Analysis of the interview data. The data and notes recorded in the interviews were
converted to text. The content of the product innovation strategies was analyzed and
integrated according to the basic data and innovation strategies observed in the enterprises.

Types of innovation strategy Aggressive Market Technical Opportunity Total

Table II.
Number of enterprise 68 62 85 78 293 Types of innovation
Percentage (%) 22.8 20.8 28.5 26.2 100 strategy
 JEDT Firm Department Title Major products
15,1
Acer Concept Development Section Manager Notebook, MP3 Player, Flash Pen, AV
Player, Communication Product,
Server, Bare System, Computer
Peripherals, Mobile phone
ASUS Design Research Center Manager Monitor, LCD TV, Mobile phone,
18 Computer, Digital camera, Projector,
Scanner, Multi-function business
machine, Mobile phone
Benq Lifestyle Design Center Creative director Notebook, Monitor, LCD TV, TV,
Mobile phone, CD ROM, PDA,
Desktop computer, Mobile phone
Genius Industrial Design Department Manager Mouse, Scanner, Joy Stick, Game Pad,
Digital Scribe, Pen Tablet, Monitor,
CD ROM, Video Camera
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MSI Consumer Product Design Senior manager Notebook, Desktop computer, LCD
Department TV, Monitor, Projector, PDA, Digital
camera
Gigabyte Design Research Center Manager Notebook, GPS, Mobile phone, PDA,
LCD TV
Dlink R&D Design Department Deputy manager Notebook, LCD Monitor, Desktop
computer, Mobile phone
Moshi Industrial Design Department Creative director Digital TV Receiver, Card Reader,
Keyboard
PQI Product R&D Department Manager Flash Pen, Extra Hard disc, Storage
product, Multimedia Player
Intopic Product Design Department Manager Head Phone, Portable Ear Phone, Blue
tooth Ear Phone, Hi-Fi Set,
Microphone
Table III. Pegatron Industrial Design Department Manager Desktop computer, Notebook,
Department, title and Multimedia Player, LCD TV
major products of the Jabra Technical Department Senior manager Ear Phone, Speaker, Multimedia
interviewees Player

Table IV provides a comparison of the status and scale of the enterprises for each innovation
strategy.

4. Enterprise characteristics in each innovation strategy type

4.1 Aggressive innovation enterprises
(1) Acer: Acer emphasizes the business to consumer (B2C) business type, which involves
multiple suppliers, product lines and channels. Its innovation strategy, which is
executed by the Concept Development Section, is user-oriented and dominates the
R&D and design of desktop computers, notebooks and digital home appliances.
Currently, Acer is the second largest notebook computer manufacturer (Lee, 2014a,
2014b).
(2) ASUS: The product innovation strategy applied by ASUS emphasizes flexible
product specifications, providing high value for users and providing high-quality
presale services. Product innovation and design are executed by its Industrial Design
Department. Its innovation strategy emphasizes a flexible product development
procedure and a manufacturing model aimed at minimizing risk and maximizing
benefit for the enterprise. In the Taiwanese computer and consumer electronics
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Aggressive Market Technical Opportunity

Case Acer Asus Benq Genius MSI Gigabyte Dlink Moshi PQI Intopic Pegatron Jabra

Year founded 1976 1980 1984 1983 1986 2001 1984 2004 1997 1973 2007 1979
Business type (%) (B2C/B2B2C/B2B) 100/0/0 100/0/0 90/10/0 65/35/0 15/75/10 0/100/0 0/90/10 30/90/10 10/75/15 10/30/60 0/40/60 5/35/60
Capital in 2014 (In million US$) 3041.0 2800.0 2500.0 1240.0 1801.0 1000.0 2569.0 401.0 1001.0 241.0 1041.0 400.0
employees 10,500 14,000 22,000 6,600 17,500 6,000 27,000 350 1000 600 1000 235
19
strategy

by innovation strategy
enterprises classified
Status and scale of
Table IV.
Design-oriented

typology
 JEDT industry, ASUS is currently the leading enterprise in B2C business value and
15,1 technological advancement (Liao, 2014).
(3) Benq: The innovation strategy applied by Benq combines the development of core
capabilities in product R&D, information technology and experiential marketing.
The enterprise establishes the position of its products through innovation to upgrade
its brand image and to achieve an integrated product line. The Digital Lifestyle
20 Design Center integrates the design resources of Benq to encourage innovation. The
goal of Benq in the global market is “bringing enjoyment and quality” for computer
users (Yang, 2014).

4.2 Market innovation enterprises

(1) Genius: Genius is a mouse and joystick manufacturer recognized worldwide. At
Genius, the Industrial Design Department, responsible for the design and
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development of all products, is a core division for new product R&D. The innovation
strategy of the company is expressed by the slogan “live with ideas”. The enterprise
has also made efforts to increase the added value of its products. With these concepts,
it has created B2C product lines for work, amusement, music and video (Lee, 2014a,
2014b).
(2) MSI: Globally, MSI is the largest computer interface card manufacturer. Its
innovation strategy is to achieve “excellent quality, perfect service, and innovative
value”. Its Consumer Product Design Department is responsible for R&D and design
in all consumer electronics sectors. Additionally, MSI maintains competitiveness by
providing multiproduct lines and a wide product variety (Chen, 2014a).
(3) Gigabyte: Gigabyte is one of the largest professional information and communication
product manufacturers worldwide. Its innovation strategy is to provide an “integral
service” that combines information, communication and technology. The Design
Research Center is responsible for innovation design and conceptual development of
business to business to consumer (B2B2C) products. Gigabyte uses an integrated
innovation procedure that links design, vertically integrated manufacturing,
configuration-to-order, delivery and service (Cheng, 2014).

4.3 Technical innovation enterprises

(1) Dlink: According to sales, Dlink is the largest notebook manufacturer and the third
largest LCD manufacturer in the world. Its innovation strategy is to control key
technology and patent rights. The Dlink R&D Design Department concentrates on
technology for new materials and new machining methods and on reducing defect
rates. The department is also responsible for innovation and the R&D of mobile
information, wireless communication, home entertainment and digital broadband
products (Chen, 2014b).
(2) Moshi: Moshi applies a rapid and flexible product innovation strategy. Its products
are characterized by simplicity, delicacy, fashion and technological advancement.
The Industrial Design Department at Moshi is responsible for product innovation
and coordinates with the Marketing Department to launch new products and services
efficiently. Its two most widely recognized brands are Moshi and Aevoe (Wong,
2014).
(3) PQI: According to product market share, PQI is one of the 10 largest memory product
manufacturers in the world. Its innovation strategy is technology R&D-oriented. The
 company aggressively pursues innovation in products and services and has won Design-oriented
many international design awards in recent years (Huang, 2014). strategy
typology
4.4 Opportunity innovation enterprises
(1) Intopic: Intopic is the largest earphone and multimedia speaker manufacturer in Asia.
Its innovation process and strategy emphasize quality. At Intopic, the Product R&D
Department is responsible for product design and development. By providing highly 21
differentiated B2B services and by establishing advantageous product positioning,
Intopic has become a major supplier of multimedia products in Asia (Chou, 2014).
(2) Pegatron: Pegatron provides R&D and production for many brands of notebook
computers. “Leading the technical trend in the future” is its innovation strategy. At
Pegatron, the Product R&D Department is responsible for the design and innovation
of B2B products. By integrating electronics manufacturing services with original
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design manufacturing, Pegatron has become a leading design and manufacturing

service company (Chang, 2014).
(3) Jabra: Jabra designs and manufactures professional audio products. Its innovation
strategy emphasizes speed and professionalism in the launch of new earphone
products in the middle and advanced B2B market with moderate prices. At Jabra, the
Technical Department controls product design and mechanical development. Most of
its sales are in Japanese and American markets (Yu, 2014).

According to the enterprise scale in the Taiwanese computer and consumer electronics
industry, enterprises with capital exceeding US$2000m are classified as large-scale, those
with capital between US$401 and US$2000m are classified as medium-scale and those with
capital of US$400m or less are classified as small-scale (Table IV). Table V shows a
comparison of the interviewed computer and consumer electronics enterprises according to
enterprise scale, predominant business type and product development type.

5. Analysis and discussion

Analyses of the interview results from the case studies revealed 18 product design strategies:
improving product design and development procedures, enhancing product quality,
including added value in products, reducing production costs, simplifying manufacturing
and maintenance, reinforcing marketing information and adaptation abilities, enhancing the
company and brand image, reinforcing technical cooperation, improving R&D labor
division, developing new target markets, increasing investment in design and R&D,
developing unique product forms, enhancing the design image of the enterprise, increasing
product diversity, designing an effective human–machine interface, developing unique
product functions, emphasizing social and cultural representation and emphasizing
environmental design. Table VI lists these design strategies and the enterprises that applied
them.
Table VI shows that enterprises are the most likely to apply the following six design
strategies: improving product design and the development procedure, increasing product
quality, including added value in products, reducing production costs, simplifying
manufacturing and maintenance and reinforcing marketing information and adaptation
ability. This indicates that these six design strategies are essential for market success in all
enterprise cases. Tables V and VI also show that design strategy is related to the following
enterprise characteristics: scale, predominant business type and method of product
innovation.
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22

cases
15,1
JEDT

Table V.
The scale, major

type of enterprise
business type and
product development
Aggressive Market Technical Opportunity
Item Type Acer Asus Benq Genius MSI Gigabyte Dlink Moshi PQI Intopic Pegatron Jabra

Enterprise scale Big-scale X X X X

Medium-scale X X X X X X
Small-scale X X
Business type B2C X X X X
B2B2C X X X X X
B2B X X X
Product innovation type Computer and peripherals X X X X X X X X X
Mobile communication X X X X X X
Consumer electronic X X X X X X X X X
Web products X X X

Note: “X” means the type to which the enterprise belongs

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Aggressive Market Technical Opportunity

Design strategy/case Acer Benq Asus Genius MSI Gigabyte Dlink Moshi PQI Intopic Pegatron Jabra

Improving product design and development procedure X X X X X X X X X X X X

Uplifting product quality X X X X X X X X X X X X
Including added-value in products X X X X X X X X X X X X
Reducing product production cost X X X X X X X X X X X X
Making it easy to manufacture and maintain X X X X X X X X X X X X
Reinforcing marketing information and adaptation
ability X X X X X X X X X X X X
Enhancing company and brand image X X X X X X X X X
Reinforcing technical cooperation X X X X X X X X X
Improving R&D labor division in companies X X X X X X X X X
Developing new target market place X X X X X X X X X
Increasing the investment in design and R&D X X X X X X
Developing unique product form X X X X X X
Uplifting design image of the enterprise X X X X X X
Adding diversity to products X X X X X X
Designing a good man-machine interface X X X X X X
Developing unique product functions X X X X X X
Emphasizing the social and cultural representation X X X X X X
Emphasizing environmental design X X X X X X

Note: “X” means that the enterprise case adopts the design strategy
23
strategy

enterprise cases
strategies used by
Analysis of design
Table VI.
Design-oriented

typology
 JEDT Different innovation strategies are associated with different design strategies. Two observed
15,1 innovation trends were radical innovation and incremental innovation. By contrast, two
observed design trends were multiple design and exquisite design. Figure 1 illustrates the
mapping of innovation strategy and product design strategy.

5.1 S1: design features in aggressive innovation enterprises

24 Figure 1 shows that the Aggressive enterprises in the Taiwanese computer and consumer
electronics industry are Acer, Benq and ASUS. These three enterprises emphasize product
R&D and investment in technology. All three are market leaders and have wider product
lines compared with other companies.
Aggressive enterprises are outstanding in applying their technical innovation ability to
diversify their products and to meet consumer requirements. Moreover, their service
innovation and diverse marketing measures make their products highly competitive. In
other words, these enterprises become market leaders by emphasizing technological
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innovation and design. In product design, these three enterprises are unique in their
application of new product design trends and in their constant search for new market
opportunities. By providing attractive products, these enterprises tend to maintain their
dominant role in the product market with their Aggressive strategy.
Aggressive enterprises take advantage of their brand image and popularity developed
over a long period, constantly modify their sales system and apply aggressive strategies to
introduce innovative new products to the market. They also make efforts in maintaining
competitive product prices, increasing the proportion of subcontracts and launching new
market regions. Furthermore, Aggressive enterprises strive to provide their customers with
new experiences. These enterprises are characterized by highly diverse design strategies
(Lee, 2014a, 2014b; Liao, 2014; Yang, 2014).
The aforementioned findings show that enterprises that apply Aggressive strategies are
the most likely to develop diverse new products and seek new market opportunities for their
new products and services. Moreover, they are willing to take risks in R&D and innovation.
Generally, they have wide product lines, and their intensive innovation often results in major
changes in the high-technology industry.
Regarding scale, most of these companies are the large-scale enterprises of the B2C
business type. Their product lines are large, and their product designs are diverse. Because
they attempt to provide consumers with completely new experiences and feelings in a
product category, their product design processes are characterized by “new experience
design”.

Figure 1.
Mapping of design
strategy typology and
innovation framework
 5.2 S2: design features in market innovation enterprises Design-oriented
Figure 1 shows that Market enterprises in the Taiwanese computer and consumer electronics strategy
industry include Genius, MSI and Gigabyte. The three enterprises in this group emphasize
incremental innovation. In other words, on the basis of the observed life cycle of products in
typology
the market, they respond to the target market to reduce their production costs and extend
their product lines so that they can simultaneously launch new products and expand their
market share.
To satisfy the needs of their target consumers, Market enterprises must achieve 25
competitive advantages in product appearance, function and price. Specifically, they must
focus on the market resources and the targeted user groups, product line and regional
market. They maintain their product market share by rapidly responding to market changes
and by setting a flexible product price.
Compared with Aggressive enterprises, Market enterprises have fewer product
categories but more varied product specifications. Their goal is to provide a new sense of
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value to their consumers. Moreover, because of their centralized design resources, these
enterprises are superior to their competitors in efficiency, quality, speed and profitability.
Notably, design strategies are centrally distributed in these enterprises. The product
design strategies used by Market enterprises are intended to enhance the company and
brand image, develop new target markets, increase investment in design and R&D, develop
unique product forms, enhance the design image of the enterprise and increase product
diversity (Lee, 2014a, 2014b; Chen, 2014a; Cheng, 2014).
The preceding analysis shows that Market enterprises tend to be medium-sized in
company scale. Their predominant business types are B2C and B2B2C. These enterprises
also concentrate on developing products that are distinctive in the marketplace. Moreover,
they are dedicated to responding to market changes efficiently and to enhancing product
value to increase their profits. The Market innovation type falls between the Aggressive and
Opportunity types. Therefore, Market enterprises feature characteristics of these two other
enterprise types. In other words, the design strategy applied by Market enterprises is “new
value design”.

5.3 S3: design features in technical innovation enterprises

Figure 1 shows that Technical enterprises in the Taiwanese computer and consumer
electronics industry include Dlink, Moshi and PQI. These three enterprises emphasize new
technology and new product specifications that enhance consumer perceptions of their
service quality and product quality.
Enterprises that apply a Technical strategy aggressively design and develop new
products. They emphasize innovation in function, texture and machining methods and
expect a customer consensus that their products and services are superior. Thus, they
encourage consumers to try their new products while expanding their product lines.
Accordingly, enterprises with a Technical strategy can expand market share by challenging
market leaders and other competitors.
Technical enterprises mainly apply the following design innovation strategies:
enhancing company and brand image, reinforcing technical cooperation, improving R&D
labor division, designing an effective human–machine interface and developing unique
product functions (Chen, 2014b; Wong, 2014; Huang, 2014).
These three enterprises apply these strategies because they are successful in the
Taiwanese computer and consumer electronics industry. All of them are medium-sized
enterprises in which B2B2C is the predominant business type. All three enterprises expect to
increase their market share by providing innovative services. They first choose a specific
 JEDT product in the market place as their goal for technical innovation. They then use their
15,1 product design proficiency to enhance their R&D efficiency. They also offer design, R&D
and manufacturing services to their clients to enhance the competitiveness of their products.
Therefore, the design strategy applied by Technical enterprises is characterized by “new
service design”.

26 5.4 S4: design features in opportunity innovation enterprises

Figure 1 shows that Opportunity enterprises in the Taiwanese computer and consumer
electronics industry include Intopic, Pegatron and Jabra. These three enterprises avoid
competition with market leaders. For example, they concentrate on niche products such as
earphones, LCD monitors and speaker systems.
Enterprises of the Opportunity type emphasize a wide variety in a single product line to
increase its depth and the added value of their products. When their products achieve a
market advantage, they rapidly launch new products to increase their competitiveness. All
three enterprises tend to expand their channels by using the media to promote and attract
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dealers.
Regarding product design, the strategies applied by these enterprises emphasize social
and cultural representation, environmental design, technical cooperation through division of
labor in R&D and development of new target markets (Chou, 2014; Chang, 2014; Yu, 2014).
All three enterprises have relatively small market shares. As their predominant business
type is B2B, they specialize in specific products. By combining key technologies and skills
with their own positioning strategies, they achieve high profits and competitive prices. Their
advantage in flexible R&D enables them to increase the depth of their product lines.
Moreover, as many of their products have a high washout rate in the market, they can
concentrate on those with high added values to earn profits quickly. Therefore, Opportunity
enterprises can earn profits without diverse product designs, unlike Aggressive enterprises.
This design strategy can be referred to as “new positioning design”.

6. Conclusions
Enterprises in the Taiwanese computer and consumer electronics industry can be classified
into four innovation types according to the strategies they use to cope with global
competition: Aggressive innovation, Market innovation, Technical innovation and
Opportunity innovation. According to market share from largest to smallest, the order of
these types is Technical innovation (28.5 per cent), Opportunity innovation (26.2 per cent),
Aggressive innovation (22.8 per cent) and Market innovation (20.8 per cent). The type of
innovation strategy used by enterprises in the Taiwanese computer and consumer
electronics industry depends on their scale, business type and product category.
This study revealed 18 product design strategies and methods: improving product design
and development procedures, improving product quality (i.e. added value), reducing
production costs, simplifying manufacturing and maintenance, reinforcing marketing
information and adaptation abilities, enhancing the enterprise and brand image, reinforcing
technical cooperation, improving R&D labor division, developing new target markets,
increasing investment in design and R&D, developing unique product forms, enhancing the
design image of the enterprise, increasing product diversity, designing an effective human–
machine interface, developing unique product functions, emphasizing social and cultural
representation and emphasizing environmental design. All of the surveyed enterprises in the
Taiwanese computer and consumer electronics industry applied six of these strategies:
improving product design and development procedures, improving product quality,
including added value, reducing production costs, simplifying manufacturing and
maintenance and reinforcing marketing information and adaptation ability. These six
 design strategies can therefore be considered essential for a successful product in the Design-oriented
Taiwanese computer and consumer electronics industry. strategy
Analysis of the innovation strategies and design strategies used by the surveyed
enterprises in the Taiwanese computer and consumer electronics industry revealed that their
typology
innovation strategies tend to be either radical or incremental and that their design strategies
tend to be multiple or exquisite design. These two axes can be used to map innovation
strategy and design strategy:
27
• Aggressive innovation enterprises consider new experience in their product design.
They implement diverse design strategies, and they aggressively develop diverse new
products and seek new market opportunities. They offer new products and services to
attract new customers. Moreover, they develop various innovative products. Finally,
the products they offer provide users with a completely new experience and new
feelings.
• Market innovation enterprises create new value in their product design. They
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concentrate on developing distinct products in the marketplace. They also make

efforts to improve the efficiency of their response to market changes, and they increase
profitability by adding market value. These enterprises combine the characteristics of
the Aggressive innovation type and the Opportunity innovation type.
• Technical innovation enterprises offer new services in their product design. Their
technical innovation goals are to use their advantages in product innovation and
service and to choose specific products in the market. Their professional skills in
product design enable highly efficient product R&D. Finally, they take advantage of
the design, R&D and manufacturing technology used by other companies in the sector
to improve the competitiveness of their products and services.
• Opportunity innovation enterprises feature new market positioning into their design
process. Their advantage of being flexible in product R&D enables them to increase
the depth of their product lines. Their products have a short life cycle and high added
value, which enable rapid profit in the market.

In recent years, the global market for computer and consumer electronics products has been
fiercely competitive. Therefore, only enterprises that can innovate, respond rapidly and
maintain advantages in product design can survive in the market. This case study of
companies in the Taiwanese computer and consumer electronics industry provides a
reference for product R&D and design for enterprises, especially in the Taiwanese market.

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Corresponding author
Yen Hsu can be contacted at: erickshi@ms1.hinet.net

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