Chptr 20 - 20-1Understand what challenges a company faces...

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Unformatted text preview: 20-1Understand what challenges a company faces in developing new products and services. Understand what organizational structures and processes are used to manage new-product developmentUnderstand the main stages in developing new products and servicesUnderstand what is the best way to manage the new product development processUnderstand what factors affect the rate of diffusion and consumer adoption of newly launched productsLearning Objectives:Break2 ways to add new products:1.Acquisition i.Buy other companiesii.Acquire patentsiii.Buy license/franchise2 ways to add new products:2.Developmenti.Develop new productsii.Contract with independent researchers or firms - develop new products6 categories of new products:1.New-to-the-world products2.New product lines3.Additions to existing lines4.Improve & revise - existing products5.Repositionings6.Cost reductionsJapan toiletry brand, ShokubutsuShokubutsu, adds new variantsto body foam product line- green tea oil, oat milk & anti-bacteriaChallenges in New Product DevelopmentPrinciples - new-product development:1.Work with potential customers2.Let employees choose projects3.Give employees “dabble” time4.Know when to let goNew-product activity, improve current oneLaunch new products - brand extensions Economy – changes - continuous innovation If not – risk for companyEstablished firms - incremental innovationNewer companies - disruptive technologiesNew-product development - quite riskyMost companies - low innovation productivityFactors hindering new-product development:1.Shortage of important ideas - certain areas2.Fragmented markets3.Social & governmental constraints4.Cost of development5.Capital shortages6.Faster required development time7.Shorter product life cyclesAsian companies – lack research - profit from licensing & tradingHierarchical & paternalistic management style - discourage creativityReluctance to comment on matters outside of one’s assigned responsibilityDevelop successful new products - HOW? 1.Unique, superior product2.Well-defined product concept3.Technological & marketing synergy4.Quality of execution in all stages5.Market attractivenessBreakCustomer-driven engineering - design new productsHigh importance - customer preferences in final designNew-product - define business domains, product categories & specific criteriaHow much budgetHow much budgetto develop new product?...
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Chptr 20 - 20-1Understand what challenges a company faces...

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