lecture 1

• 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 there is little product differentiation or when they have a desirable new item that the firm doesn't
• The new products process is exceedingly difficult, with many reasons why products fail
• Globalization


  Many multinational firms seek to leverage their product development skills across their subsidiaries and gain competitive advantage by setting up global new product teams
• 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
• New products team


  • Cross-functional, comprising personnel from marketing, R&D, engineering, manufacturing, production, design, and other functional areas
• 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
• Objective of new product development is to create value for customers by leveraging internal learning and knowledge in order to have marketing and economic success
• 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 (PIC)

  A strategy for new products that ensures the new product team develops products in line with firm objectives and strategies and that address marketplace opportunities

  
• 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
• New products process


  1. Opportunity identification

  2. Concept generation

  3. Concept/project evaluation

  4. Development

  5. Launch

  
• Opportunity identification


  The process of creatively recognizing opportunities that sort into four categories: underutilized resource, new resource, external mandate, internal mandate/product innovation gap
• Concept generation


  Creating new product ideas, usually called product concepts
• Concept/project evaluation


  Evaluating and screening new ideas before development work can begin, including preparing a product description or product definition (product protocol)

  
• Development phase


  • Resource preparation
  • Actual development of the product, marketing plan, and business/financial plan
  • Comprehensive business analysis

  
• Launch phase


  Traditionally describes the time or decision when the firm decides to market a product, including the critical market test step
• Evaluation tasks throughout the new products process

  • Opportunity concept
  • Idea concept
  • Stated concept
  • Tested concept
  • Fully screened 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


  A complementary process to the phased new product process, with the objective of providing customer satisfaction by continuous software improvement and delivery
• Accelerated product development (APD)

  • Accelerating time to market offers many benefits to the firm, such as the product being on the market for a longer period before becoming obsolete, attracting customers early, blocking competitors, and building/supporting the firm's reputation
• Methods to accelerate time to market

  1. Clear product innovation charter

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

  3. Portfolio management approach

  4. Focus on quality at every phase

  5. Empowered cross-functional team
• Being first to mindshare is valuable, as the firm with mindshare in a product category is seen as the standard for competitors to match
• New service development


  • Getting customer participation early is critical, service delivery personnel are key players, and the launch phase can be particularly challenging with constant monitoring to ensure efficient customer needs and expectations are met
• New-to-the-world products


  • Have a lower survival rate but higher profits, are difficult to manage, require discontinuities to succeed, and need a discovery-driven planning approach that acknowledges unknowns and uncertainties
• 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 think and work differently, follow their own new products process, and know how to bridge the gap between technology and market
• Spiral development process


  Build-test-feedback-revise, using focused prototypes to get customer feedback and iterate
• 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
• There is a trade-off between customers wanting distinct products and common products producing the greatest cost efficiencies, so manufacturers need to decide on the optimal level of commonality
• Firms that take a multinational approach to new products


  • On average do better than those that develop products just for their home market
• Bottom-up procedure


  Piecing together of systems to give rise to more complex systems, thus making the original systems sub-systems of the emergent system
• Top-down platform procedure


  Breaking down of a system to gain insight into its compositional sub-systems in a reverse engineering fashion
• Managers may need to be convinced to commit to top-down platform development rather than development of a single product, as it will certainly be more expensive and time-consuming