MIT R&D New Business Risks

MIT R&D New Business Risks - R&D...

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Unformatted text preview: R&D Management 2.96 - Management in Engineering, Fall 2004 Massachusetts Institute of Technology Department of Mechanical Engineering Instructors: Professor Jung-Hoon Chun and Professor Alexander d'Arbeloff - 2 - MASSACHUSETTS INSTITUTE OF TECHNOLOGY Outline Risk Factors in R&D Strategic Focus Stage-Gate Process Technology Choice Case - 3 - MASSACHUSETTS INSTITUTE OF TECHNOLOGY Attrition Rate of New-Product Ideas For every 11 serious ideas * 3 enter development * 1.3 are launched * 1 succeeds- 4 - MASSACHUSETTS INSTITUTE OF TECHNOLOGY Causes of New Product Failure Inadequate market analysis Product problem or defects Lack of effective marketing effort Higher costs than anticipated Competitive strength or reaction Poor timing of initiative Technical or production problem All other causes 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Figure by MIT OCW.- 5 - MASSACHUSETTS INSTITUTE OF TECHNOLOGY Attempts to Start New Business One success in ten The odds are much poorer for new ideas- 6 - MASSACHUSETTS INSTITUTE OF TECHNOLOGY Perilous Path to New Business Using technology superiority alone Lack of understanding in additional capabilities Product / service not filling unmet customer need Underestimating competition Unable to nurture the new business- 7 - MASSACHUSETTS INSTITUTE OF TECHNOLOGY The Suicide Square New Technology Increased Risk- 8 -...
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MIT R&D New Business Risks - R&D...

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