Internal and external design integration, launch strategy proficiency, and new product development performance: The contingent role of market dynamism

Design capabilities have been recognized as drivers of innovation, yet the distinction between internal and external design integration remains largely underexplored, as do the ways through which these integration types contribute to new product development (NPD) performance. Drawing on the dynamic knowledge management view, this study conceptualizes internal and external design integration as distinct loci of market-facing knowledge generation that are associated with launch strategy proficiency and, in turn, with NPD performance. Survey data from 247 U.S. firms show an indirect association between both types of design integration and NPD performance through launch strategy proficiency. Market dynamism reveals a capability reversal. Under stable market conditions, internal design integration is positively associated with launch strategy proficiency, whereas external design integration becomes negatively associated with it at very low levels of dynamism. Under dynamic market conditions, external design integration is positively associated with launch strategy proficiency, whereas the association between internal design integration and launch strategy proficiency is attenuated. The findings connect the design and marketing research streams and offer guidance for decision-makers on aligning the locus of design integration with the level of market dynamism.