The impact of modular design and innovation on new product performance

The purpose of this paper is to propose a modular product design system and a product development roadmap (PDR), which can help to improve modular design (MD) and product innovation capabilities, respectively. Their relationships with product newness (PN) and new product performance are also assessed.,The proposed model was tested through structural equation modelling using data from a survey of 153 manufacturers in the electronic and electrical appliance industries in China.,The findings reveal that the proposed modular product design system and PDR can improve MD and product innovation capabilities. The authors also explore the conflicting relationships of MD and product innovation capability with PN.,The findings contribute to the literature by showing that MD can constrain PN while product innovation can improve it. The study provides new empirical evidence of these relationships and has strategic implications. In addition, this study identifies two product development techniques that can improve MD and innovation capability, respectively.,The authors provide new evidence of the relationship between MD and innovation capability at product level, and confirm a side effect of pursuing both in terms of new product development. Through empirical testing, the authors first verify two product development techniques for implementing modular product design and product innovation.