product innovation

• New products


  Tangible goods or services
• New product management


  Managers face the world as it is, not as they would it to be – downsizing, regulatory actions, competitive moves, the impact of the new Internet technologies, and even personal problems such as illnesses
• Radical innovation


  • Innovation that displaces or obsoletes current products and/or creates totally new product categories
• Firms invest much in new products because they hold the answer to most firms' biggest problems
• Competitors do the most damage when (1) there is so little product differentiation that price-cutting takes everyone's margins away or (2) when they have a desirable new item that we don't
• The new products process is exceedingly difficult
• Reasons why products fail

  • The firm doesn't understand the customer
  • Underfunds the required research and development
  • Doesn't do the required homework before beginning development (sometimes called the ready—fire—aim approach)
  • Doesn't pay enough attention to quality
  • Lacks senior management support
  • Chases a moving target
• Global innovation culture


  • A firm is open to global markets, mindful of differences in customer needs and preferences, and respectful of different national cultural and business environments
• Process innovation


  Usually applies to functions, especially the manufacturing or distribution process, and every new product benefits from this type of innovation
• Product innovation


  Applies to the total operation by which a new product is created and marketed, and it includes innovation in all of the functional processes
• The objective of product innovation is to create value for customers by leveraging internal learning and knowledge in order to have marketing (company visibility, brand availability, advertisement) and economic success (Sales, Revenue, ROI, Profit)
• Stage-gate process


  Provides the blueprint for structuring the process of product innovation
• Advantages of Stage-Gate


  • Better planning and scheduling through short-term goals
  • Ensuring the continuous reduction of uncertainty
  • Managing uncertainty and risk by a step-wise resource allocation
• New products process


  The procedure that takes the new product idea through concept evaluation, product development, launch, and postlaunch

  
• Product innovation charter


  Can be thought of as a strategy for new products. It ensures that the new product team develops products that are in line with firm objectives and strategies and that address marketplace opportunities
• Well-managed product portfolio


  Helps the firm assess which new products would be the best additions to the existing product line, given both financial and strategic objectives
• All three strategic elements (new products process, product innovation charter, well-managed product portfolio) must be in place, and each is coordinated with, and supports, all the others
• Fuzzy gate


  An evaluation task that includes conditional Go decisions
• Hollow-gate problem


  When teams actually make a full "Go" decision, but fail to commit any resources to the project
• The new products process might look very different for new-to-the-world, breakthrough products as compared to more incremental new products
• Product innovation charter (PIC)

  A systematic way for managers to develop a new product strategy that considers the goals for their product innovation efforts and how these efforts fit overall business strategy
• Voice of the customer (VOC)


  Used to drive product development
• Opportunity identification


  1. Ongoing marketing planning

  2. Ongoing corporate planning

  3. Special opportunity planning
• Categories of opportunities


  • Underutilized resource
  • New resource
  • External mandate
  • Internal mandate; product innovation gap
• Product protocol


  The first list of customer needs, or a more common generic term for product description or product definition
• The first three phases (strategic planning, concept generation, and, especially, concept/project evaluation) comprise what is popularly called the fuzzy front end
• Development phase


  1. Resource preparation

  2. The actual development of the item or service itself, the marketing plan for it, and a business (or financial) plan

  3. Comprehensive business analysis
• Launch


  The time or decision when the firm decides to market a product
• Evaluation tasks throughout the new products process

  1. Opportunity concept

  2. Idea concept

  3. Stated concept

  4. Tested concept

  5. Fully screened concept

  6. Protocol concept

  7. Prototype concept
• New product development process

  1. Opportunity concept

  2. Idea Concept

  3. Stated Concept

  4. Tested Concept

  5. Fully screened Concept

  6. Protocol Concept

  7. Prototype concept

  8. Batch concept

  9. Process concept

  10. Pilot concept

  11. Marketed concept

  12. Successful concept (i.e., new product)
• Agile product development


  Objective is to provide customer satisfaction by continuous software improvement and delivery
• Accelerated product development (APD)

  • Offers many benefits to the firm such as longer time on the market before becoming obsolete, attracting customers early, blocking competitors, and building/supporting firm's reputation
• Methods to accelerate time to market

  1. Clear product innovation charter

  2. Third-generation new products process with overlapping phases or parallel processing

  3. Portfolio management approach

  4. Focus on quality at every phase

  5. Empowered cross-functional team
• Being first to mindshare is valuable rather than just being first to market
• New service development


  • Getting customer participation early is critical, service delivery personnel are critical players at the concept generation phase, launch phase can be particularly challenging
• New-to-the-world products


  • Have a lower survival rate but higher profits, require discontinuities to succeed, experimentation in the marketplace is needed, discovery-driven planning approach is required, voice of the customer is especially important
• Disruptive innovation


  Creates a new market or value network, over time the disruptor improves functionality and wins over mainstream customers, can come from business model or technology innovation
• Serial innovators


  • Mid-level, technical employees who are good at bridging the gap between technology and market, follow an iterative process of finding important customer problems, understanding the problem, determining customer interest and fit with firm, inventing a solution, and gaining market acceptance
• Spiral development


  Build-test-feedback-revise process, involves creating early prototypes, testing with customers, and iterating based on feedback
• Product platform


  A set of subsystems and interfaces that form a common structure from which a stream of derivative products can be efficiently developed and produced