The Differential Impact of New Product Development “Make/Buy” Choices on Immediate and Future Product Quality

The academic article explores the differentiated consequences of new product development (NPD) "make/buy" decisions on vehicle transmission system quality within the automobile industry. Utilizing data on 173 models from twelve major firms, the authors determine that NPD outsourcing ("buy") is generally associated with higher immediate product quality, while internal development ("make") leads to greater future product quality. This study establishes that the positive immediate quality impact of outsourcing is amplified by greater technological complexity and higher firm NPD capability. Conversely, the positive long-term quality benefit of internal development is strengthened by post-launch adverse feedback and greater firm NPD capability, highlighting complex trade-offs for managers.