lecture 2

• Bubble diagram


  • Used by senior management to check strategic balance
  • Dimensions used: extent of product change and extent of process change
  • Incremental change on both dimensions leads to enhancement products
  • Major change on the product dimension leads to breakthrough (or really new) products
• Portfolio evaluation model


  • Proposed by the Strategic Decision Group (SDG)
  • Uses expected commercial value (ECV) and probability of technical success to build the grid
  • Four categories emerge

  
• Multiple-objective strategic portfolio model

  • Recommended by product portfolio expert Scott Edgett
  • Extension of the model in Figure 3.8
  • Includes additional objectives to be considered in project selection

  
• Creativity


  An activity at the individual level
• Innovation


  The implementation of a new product or technology at the group or organizational level
• Creativity at the individual level does not necessarily result in innovation, but it is still a main driver of innovation and, ultimately, the firm's ability to provide value to customers
• Creative firms


  Often use a computerized database, or idea bank, to store and document ideas from earlier, unused new product projects for reuse later
• Creative people are usually unimpressed by group rewards. They believe group contributions are never equal, especially if the group is company employees, for many of whom creatives have great disdain
• Itemized response technique


  1. All client trainees must practice it personally

  2. When an idea comes up, listeners must first cite all its advantages

  3. Then they can address the negatives, but only in a positive mode

  4. The recommended language for bringing up a negative is "OK. Now—let's see what would be the best way to overcome such-and-such a problem"
• Creative abrasion


  Technique where firms deliberately encourage conflict by putting certain employees together on the same team—for example, a blue-sky creative person and a practical type
• Product concept


  • A new product only really comes into being when it is successful, that is, when it meets the goals/objectives assigned to the project in the PIC
  • When launched, it is still in tentative form, because changes may still be required to make it successful

  
• Inputs required by the creation process

  • Form (the physical thing created, or in the case of a service, the sequence of steps by which the service will be created)
  • Technology (the source by which the form was attained)
  • Need/Benefit (the product has value only as it provides some benefit to the customer that the customer sees a need for, or has a desire for)
• Putting benefit last is very risky, since it comprises a solution trying to find a problem. Therefore, we often put benefit first
• Product concept statement


  • A claim of proposed customer value
  • It takes the form of a verbal and/or prototype expression that describes need, form, and technology (at least two of these), and how the customer stands to gain (and lose)
• Concept generation approaches


  • The "ready-made" concept
  • The problem-find-solve approach
  • The analytical attribute approach

  
• Concept generation should be an active, not reactive process
• User toolkits


  • A method that formally turns the innovation task over, to some extent, to the users themselves
  • A toolkit is a user-friendly set of design tools that customers can use, together with their understanding of their own needs, to customize a product that would be best suited to them
• Product configurators


  A simple kind of user toolkit that allows the user to mix and match different components and see what the retail price would be
• Crowdsourcing


  • Open idea solicitation from large groups of customers
  • Provides input on customer needs directly from the customers themselves
  • Most likely to generate modest product improvements rather than new-to-the-world products
• Lead users


  • Customers who currently are experiencing needs that are not yet common in the marketplace but may be in coming months or years
  • Have the best understanding of the problems faced, and expect to gain significantly from solutions to those problems
• Open innovation


  • The use of inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation
  • Inbound open innovation refers to working with external partner firms to develop or obtain required technology or know-how and thereby speed up product innovation
  • Outbound open innovation refers to monetizing innovation through external partners
• Open innovation does not mean that the firm outsources its R&D. Rather, the firm's goal is to reach out beyond its familiar research partners and to access R&D carried out globally, so that it will complement the know-how it develops internally
• One of the complicated issues a firm must manage in an open innovation policy is intellectual property protection. Without careful partner selection, the firm opens itself up to the possibility that intellectual property could be accidentally disclosed by a partner, or worse, deliberately used illegally or given to competitors
• The most successful new products match a set of fully understood consumer problems with a cost competitive solution to these problems
• Problem-based ideation


  1. Involves studying the situation, using various techniques of problem identification, screening of the resulting problems, and development of concept statements that will then go into the evaluation phase

  2. The whole system is based on close involvement with parties who have information to help us

  
• The leading cause of new product failure is the absence of a perceived need by the intended end user
• Sources for needs and problems of stakeholders

  • Internal Records (sales call reports, customer/technical service findings, tips from resellers)
  • Direct Inputs from Technical and Marketing Departments
  • Problem Analysis
• Reverse brainstorming


  Participants generate a list of key problems with the product currently in use, then group and prioritize these such that product development can focus on addressing the most important problems
• Bothersomeness index


  Uses (1) the extent of the problem, and (2) the frequency of its occurrence, adjusted by users' awareness of currently available solutions to the problem
• Methodologies to use


  • Experts (as surrogates for end users)
  • Published sources (industry studies, past firm studies, government reports, etc.)
  • Stakeholder Contacts (Interviewing, Focus Groups, Ethnographic Market Research, Customer Site Visits, Role Playing, Complaint Analysis)
• An alternative way to generate concepts is based on product function analysis, where thinking of new combinations of verbs and objects can suggest new product functions
• Ongoing problem analysis is critical to identification of newly emerging problems and continued improvement
• Scenario analysis


  First, paint a scenario; second, study it for problems and needs; third, evaluate the problems and needs for product development
• Qualitative research techniques


  • Focus groups
  • Ethnographic Market Research
  • Customer Site Visits
  • Role Playing
  • Complaint Analysis
• Generating new product concepts using product function analysis

  1. Express product in two words (verb and object)

  2. Think of new combinations of verbs and objects

  3. Identify highest scoring concepts

  4. Conduct in-depth interviews to explore feelings and ideas further
• Scenario analysis procedure


  1. Paint a scenario

  2. Study scenario for problems and needs

  3. Evaluate problems and begin trying to solve the most important ones
• Scenario


  A "stylized narrative" - a clear picture of the future state, containing a "plot" or sequence of believable events
• Types of scenarios


  • Extending the present to see what it will look like in the future
  • Leaping into the future to pick a period that is then described
• Static leap scenario


  No concern about how we get to the future state
• Dynamic leap scenario


  Focus is on what changes must be made between now and the future state