The International Center for Research
on the Management of Technology
The Product Family and the Dynamics of
Core Capability
Marc H. Meyer
James M. Utterback
November 1992
WP # 77-92
Sloan WP# 3490-92
© 1992 Massachusetts Institute of Technology
Sloan School of Management
Massachusetts Institute of Technology
38 Memorial Drive, E56-390
Cambridge, MA 02139-4307
Introduction
Why is it that some firms introduce distinctive new products time and time
again, when so many other firms are far less able to generate new products?
More specifically, some firms while strong in product design, fail to gain
commercial reward, while their more successful counterparts exhibit the
"right mix" of capabilities in implementation, manufacturing, and
distribution as well as product design? Much current management addresses
successfully developing single products as rapidly as possible. Developing
products in this mode has two essential problems: redundancy of both
technical and marketing effort and lack of long term consistency and focus.
We will argue for an approach to managing new products that is broader.
Concentrating at the level of the product family, and more specifically at the
development and sharing of key components and assets within a product
family, is the vital issue. The benefit of examining elements shared by
products within a family is that firms will then develop the foundation for a
range of individual product variations. At an even broader level one can
examine relationships between product families themselves to achieve even
greater commonality in both technologies and marketing. For an existing
product family renewal is achieved by integrating the best omponents in
new structures or proprietary designs. This improves of all products within
the family. Diversification can be achieved by building upon and extending
capabilities to build new, but related foundations. For example, Hewlett
Packard built on a foundation in scientific instruments to create a family of
computers, and then built on both to become a leader in medical patient
monitoring systems.
Figure 1 portrays a set of products and their relationships over time. Earlier
generations are followed by successive generations that refresh existing
products with improved designs and technologies. New product families
branch from existing ones, using expanding technical skills, market
knowledge, and manufacturing capabilities. The development of new
technologies is focused. Market extensions are related. High levels of
customer recognition are the cumulative effect of a robust product family.
Strong financial performance follows.
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Deliberately building product families rather than single products requires
management of a firm's core capabilitiesl. Quinn, Doorley, and Paquette view
the firm as an intellectual holding company where products and services are
the application of its knowledge assets. By targeting and focusing upon the
best ones a firm can dominate its rivals. 2 Core capabilities cannot be divorced
from or viewed separately from the actual products that a company makes
and sells on a daily basis. Core capabilities are the basis of products. Non
distinctive capabilities lead to non distinctive products. Strong capabilities
lead to strong product families.
Our purpose in this article is to define the product family as a basis for
planning and managing new business and product development and to assess
the firm's core capabilities, relating both to management and performance.
We have developed and applied a method to three product families in a large
corporation to illustrate our ideas. The combination of a product family
approach and core capability assessment serves as a genuine and effective
basis for tackling the problem of corporate renewal.
Defining the Product Family
What is a product family? What are those characteristics and properties
shared by and therefore common to a series of related products grouped into a
family?
The term product platform was used earlier-in its common meaning of
encompassing the design and components shared by a set of products. For
example, Chrysler has just released a new line of cars based on a common
platform where three different lines of cars share the same basic frame,
suspension, and drive train. To achieve a powerful definition of the product
family, market understanding, distribution, manufacturing, and service
dimensions must be included. Instead of using the term product platform,
we have coined the term product core to reflect the multifunctional meaning
of our definition.
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A product core is the heart of a successful product family, serving as the
foundation for a series of closely related products. Figure 2 illustrates the idea.
Individual products are refinements or extensions of the product core. For
example, Chrylser's forthcoming upscale New Yorker model will be based on
a longer version of its new platform. Products that share a common platform
but have specific features and functionality required by different sets of
customers will be called a product family. The product family typically
addresses a market segment, while specific products or groups of products
within the family target niches within that segment. The commonality of
technologies and markets leads to efficiency and effectiveness in
manufacturing, distribution, and service, where the firm tailors each general
resource or capability to the needs of specific products and niches.
The technology embodied in a product family has two key parts: design and
the implementation of the design. Design groups dedicated to new product
platform research create basic designs, standard components, and norms for
subsystem integration. Implementation teams create different models
integrating component technologies to achieve specific goals. 3 4
An effective product core for a family of products requires clear and deep
understanding of what target customers need the product for, how they will
use it, and how the customer will integrate the product within the technical
and business infrastructure. 5 Manufacturing cost and reliability are also
required, as are strong and suitable channels for distribution and methods for
promotion. 6 Once in the field, products must be well supported in terms of
helping customers to understand and solve problems. For example, IBM has
designed remote diagnostic capabilities into-its mainframe computers.
To illustrate these ideas consider Sony's WaLkman product family.
Sanderson and Uzumeri catalogued all products introduced in the portable
tape cassette segment. 7 Sony introduced more than 160 variations of the
Walkman from 1980 to 1990. The foundation for these products was a
platform that Sony refreshed with four major technical innovations. The
company combined these major innovations with incremental
improvements to achieve better functionality and quality while lowering
Meyer and Utterback
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production costs. Sony's trademark is virtually synonymous with the
product class.
Black and Decker's power tool business is another example of building
product cores.9 In 1970, the company had hundreds of products. The products
used more than thirty different motors, sixty different motor housings, and
dozens of different operating controls. Further, each of the hundreds of
power tool products had its own unique armature. Management determined
that in order to remain competitive, it would have to decrease its cost of
goods sold by about a third in the coming decade. Black and Decker created a
plan to design and manufacture product families based on shared
components and modules. Nearly $20 million was allocated to the effort.
First, the company developed a hexagonal, copper wire wrapped motor field
with standard electrical plug-in connections that would serve all its power
tools. 10 Engineers designed standard motor housings and controls as well as
a more standardized adhesive bonded armature. The company tacked each
product family in succession (drills, jigsaws, sanders, etc). The results were
dramatic: product costs were reduced by 50%, market share rose from 20% to a
dominant share, and competitors declined from more than twenty to three.
The case also shows the extent to which product families can share design,
market, and production knowledge.
Mapping Product Families
Individual products are therefore the offspring of product cores that are
enhanced over time. Product families and their cores are themselves
generated from the firm's underlying core capabilities that, in well-managed
firms, tend to be of much longer duration and broader scope than single
product families or individual products.
We believe that the product family can be used as a basis for assessing the
dynamics of a firm's core capabilities, i.e.. how these capabilities grow, decline,
and integrate with one another over extended periods of time. The first step
is to map the chronology of a product family. The follow pages will describe
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our method as we applied it to three product families in a large corporation
engaged in the electronic imaging business.
Figure 3 shows a product family map. The general application of the products
shown in that Figure has beento reproduce computer screen images onto
various presentation media. We refer to them as a horizontal market
application in that they are general purpose solutions for a large class of
customers.
Insert Figure 3 here
Management assembled a study group of ten managers, all actively involved
in the product family for many years and representing business, technology,
and marketing functions. Producing the product family map shown in
Figure 3 required several intensive meetings with the group. The top half of
Figure 3 is the summary, and the bottom half the detail, showing the market
introduction and termination date for each product. The product family is
represented in four hierarchical levels:
o The product family itself. Figure 3 shows one product family.
o Groups within a family that are encapsulated in rectangular boxes in
the top half of Figure 3. The three groups shown are based on
departmental boundaries.
o Product platforms are denoted by oval forms starting at the beginning
of the research and ending with the cessation of active marketing of
products based on the platform. We considered "skunk works"
projects, having no commercial product offspring, separate platform
initiatives because they were the source of technology and market
knowledge for subsequent products. The first product group in Figure 3
has had three successive platforms; the second, two; and the third,
three.
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o Specific products (numbered here to disguise real product names) are
placed at their market introduction dates, and in the bottom half of
Figure 3, extend out to the date of marketing termination.
Product family maps convey organizational information. For example, in
Figure 3, why have there been three separate overlapping product groups
aimed at the same target market rather than one continuous group? The
original development team chose not to abandon its initial analog platform
in favor of a newer digital platform. The older products became obsolete.
Management tried to short cut its lack of competitive product with two quick
private-label initiatives, comprising the second product group. Meanwhile,
two product champions resurrected the technical initiative by recruiting from
corporate research. The result, after years of determined technical effort and
marketing development, has been the delivery of what many would call
world-class digital products.
Figure 4 includes the product family map described above with maps for two
other related businesses in the same company. The first family in Figure 4 is a
turnkey system made for a vertical market. It is sold primarily through the
company's own direct sales force, and requires systems integration at the
customer's site. The second family is the horizontal application described
above. The company sells these products through distribution channels. The
third family consists of peripherals and components. These products are sold
through a number of different channels and have been aimed at both
industrial and consumer market segments. The differences among these
three product families provided an arena for testing our ideas.
Insert Figure 4 Here
Assessing Core Capability
The product family idea serves as a basis for assessing the evolution of a
firm's core capabilities. Figure 5 presents a core capability assessment for the
horizontal electronic imaging family. We generated similar charts for the
other two families. The chart has four basic parts:
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A) The product family map as a legend is plotted against time. Key
product events serve as anchors for subsequent data gathering and
analysis; 11
B) The product family team's strengths were assessed in relation to
existing competition for specific core capabilities within the basic
dimensions of product technology, understanding of customer needs as
reflected by products sold at that time, distribution, and
manufacturing. 2 The solid line running across the measurement
strips is a mean of responses from team members, the details of which
will be described shortly;
C) A summary section that shows the means for responses for the core
capabilities within the four basic dimensions, and
D) A final summary of core capability strength as embodied within the
product family.
All four parts show the ebbs and flows of core capabilities over time for the
product family. 3
Insert Figure 5
The process of gathering data started with a group meeting of the team
members of product family. These groups consist of managers and senior
technical staff.1 At this initial meeting, team members defined the product
families, groups, generations, and specific products under a product scope
established earlier by executive sponsors for the study. This process required
several iterations, using recollections of product histories to create product
maps. We also noted key products events, some made by the company itself
or others by its competitors. These served as anchors for gathering
information and then presenting it.
The study team was then reconvened in a second series of meetings to
identify the general product technologies, the major customer segments, the
distribution channels used over time, and the key manufacturing processes
required for the product. s1These are the specific core capabilities embodied
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in a product family and are the vertical legend running down the left side of
Figure 5.
For example, the respondents who provided the data for Figure 5 developed a
consensus that three technologies were central in their products. These
technologies were higher level groupings of more numerous individual
technologies. Participants must determine the appropriate level of grouping
using its understanding of the technologies used in a product family: for
example, "signal processing" or "circuit packaging" or "networked
computing." Everyone understood that the purpose of the study was to
facilitate managerial analysis and action. Too much detail would obfuscate
major trends in past and needs in the future.
Figure 5 also shows that this particular product family had one major
industrial customer group. The company sold these products through
independent dealers and original equipment manufacturers. The team felt
most comfortable combining specific manufacturing processes into one
"Internal Manufacturing" core capability, and relationship management with
suppliers and manufacturing subcontractors into a "External Subcontractors"
capability.16
We produced blank survey forms for each product family. These blank survey
forms appeared exactly as shown in Figure 5. Each measurement strip has
five levels. These levels represent the degree of capability (from Best in Class
to Worst in Class) relative to competitors at that time, for each of the years in
the product family's history as perceived by respondents. 17 Figure 5 also
shows that measurement strips can be extended into the future to learn a
team's expectations .
Respondents then completed the survey forms, using the same response scale
for all core capabilities. We instructed them to indicate levels of strength
relative to existing competitors for capabilities for just those years where they
had worked on the product family. We also asked respondents to assess
capability strength for the key product anchor points and then fill in the
intervening years for which they had knowledge. Averages of responses are
shown in Figure 5. 18
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Figure 6 summarizes with unweighted means the company's capabilities in
product technology, market understanding, distribution, and manufacturing.
19 Then, we plotted a grand average of these capabilities at the bottom of
Figure 6.
Insert Figure 6 Here
Figure 7 shows the core capability assessments for all three product families in
the study. We represent use the thickness and shading of line to represent
levels of strength in core capability (rather than measurement strips) to allow
the reader to more quickly and clearly surmise meaning. The core capability
in the turnkey system family has gradually increased over the years to a
moderate level of strength. The horizontal applications family experienced
strong initial strengthening, then a strong decline, and more recently, an
even stronger rebound in its embodied core capability. Lastly, the company
has yet has yet to build significant core capability in the peripherals family.
Insert Figure 7 Here
Core Capabilities and Performance
Higher levels core capability should be associated with sustained success, be it
in terms of product development effectiveness, financial performance, or
learning and employee satisfaction 20
We asked divisional management of the sponsoring company to provide
their assessment of the success of the product family over its history relative
to other new business developments undertaken by the company at that time.
Using a scale representing levels of performance, six senior vice presidents
completed a measurement strip chart for each product family, basing their
assessments on financial return. 21 We asked them to assess product families
only for those years in which they had actively monitored and otherwise
participated in the management of the product family. We plotted an average
of these responses in Figure 8.22
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Insert Figure 8 here
Data for core capabilities and performance are compared in Figure 9, using
width of line and shading to convey degree. Higher levels of core capability
have tended to precede and remain concurrent with higher levels of
performance. For example, the horizontal application family gained
moderate levels of core capability 1985, and better performance came in 1987.
The obsolete analog platform of this family for the two year period between
1987 and 1989 did not depress performance, because the obsolescence was not
immediately noted by customers. However, participants indicated that the
new digital platform arrived just in time in 1990. By 1991, the product family
achieved very high levels of performance. The history of these three product
families appears to support the cause and effect relationship between core
capability and performance. Obviously, we must study product families in
more companies to generalize this finding and compute meaningful statistics.
Insert Figure 9 here
Achieving high levels of capability can be expected to have less impact in
declining markets. We have recently completed a similar analysis for an
electronic capital equipment company where, despite continuously growing
core capability in its traditional mainstream product line, declining market
conditions (slower growth and more competitors) have nonetheless yielded
poorer performance relative to prior years. This company must find new
market applications for its core technologies.
Market dynamics temper the relationship between core capability and
performance. We asked each family study team to indicate changes in the rate
of market growth23 , the level of competition 24 , and the effective product life
cycle for their product families 25 . Figure 10 shows the results for the
horizontal application family. For all three product families, market growth
rates in their target markets are now moderate to fast and competition has
intensified. Product life cycles have also shortened.
Insert Figure 10 here
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These pictures summarize an enormous amount of data, and emphasize
changes that have occurred over the course of time. The dynamics of
innovation and product development simply cannot be well understood
using a single project lens. We need full motion video, time-phased to
understand the evolution of capabilities and of success and failure over a
span of years.
Core Capabilities as a Basis for Improving Management
A company must continue to invest in renewing product platforms,
particularly for markets with accelerating rates of product introduction and
competitive intensity. For example, if management does not continue to
invest to renew the platform for the horizontal application family for a third
time, the "dip" experienced before will probably occur again.
How is management to choose which requests to satisfy fully, or if the
resources requested are indeed sufficient? Many, if not most firms allocate
resources by individual product effort on an annual basis. Further, allocation
requests tend to be summarized by functional area (R&D versus marketing
versus manufacturing). Single product funding impedes the development of
a core for product families and therefore inhibits creation of the type of
leverage that we have discussed throughout this paper. Summarizing by
functional area obfuscates the what, when, and how much behind the
funding requested for a new product effort.
What does a product family need to do to achieve best in class status in
technology, market knowledge, distribution, manufacturing, and service?
Product family maps may be useful in this regard.
Insert Figure 11 here
For example, Figure 11 shows the computed means of the core capability
assessments for the turnkey systems family. While the first two technologies
have risen above the industry average, the third (which is software and
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systems integration) continues to be well below par. The company must
address this area of weakness to be more successful. In all three product
families studied here, the more detailed core capability assessment charts
clarify this type of tactical decision making.
Explaining the Ebb and Flow of Core Capabilities
Our study illustrates the idea that core capabilities are dynamic. They result
from the efforts of individuals, and are thus affected by the organization of
teams, the selection of products and markets, and the nature and quality of
those markets.
Once gained, competence can be readily lost. Ill-considered policies and
approaches adopted by management can destroy hard won capabilities,
impede learning, hurt the effectiveness of product development, and
ultimately, damage the profitability of the company. Four fundamental
inhibitors of core capability creation have emerged as common themes in our
work:
A lack of patience: Using unrealistic, short time horizons for the
development of new businesses invariably leads promising technical and
marketing development efforts to be killed before capability, visible on the
horizon, is realized and exploited. How long should it take to achieve
excellence in the relevant core capabilities in a new area?
A visual presentation of a product family powerfully conveys the nature of
the embodied core capabilities, how painstakingly they may be gained and
how quickly lost. Of the three product families studied, the company
achieved competitive levels of capability in only one family, and in that case
only after approximately 10 years. This particular experience is by no means
atypical. Other studies have produced time ranges from 7 to 20 years. 26
A failure to adopt innovations and new architecture. Technological
discontinuities can quickly obsolesce a company's products. 27 Dominant
firms in technology-based businesses have been and continue to be
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vulnerable to discontinuous innovations by new competitors. Planned
renewal of product platforms combined with sustained development of core
capabilities as presented here is a defense against technological surprises and
obsolescence. The renewal we observed for one product platform in the
company studied occurred with considerable conflict and organizational
dislocation.
Coasting on Success: Management can dissipate the firm's capabilities by
failing to invest in product and manufacturing technology required to
maintain the competitive distinctiveness of its products. Members of our
study groups called this the coast mentality. Once a product family reaches
high levels of success, management allocates to it only maintenance level
resources and shifts resources to other product families in earlier stages of
development. It is a strategy prone to disaster.
The coast mentality is probably more a result of a portfolio management
approach to new product development than anything else: diversify, spread
risk, and invest by stage of maturity. It leads to large corporations having too
many irons in the fire. As shown in other research, rather than produce
many successful products, this approach yields a portfolio of mediocre
products. 2s Thus, strategic focus and aggressive reinvestment are essential to
leading rapidly changing markets with high levels of technological change.
Breaking up Design Teams: The staffing of business and technical teams has a
strong bearing on the development of core capabilities. Surely core
capabilities cannot be developed nor maintained if key individuals do not
have the chance work with one another in a concentrated way for extended
amounts of time. In many companies, while management brings
multifunctional "hit teams" together to design and complete a product, once
that product is finished, management disbands the team and assigns its
personnel to other high priority product efforts.
Perhaps there is another way. Is it possible for firms to keep the heart of a
multifunctional design team together for at least a generation of a product
family? Will this not provide the momentum behind a product platform
that meets customers' needs and is amenable to effective manufacturing and
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sales? At the same time, management might rotate into the development
effort more frequently persons to implement the product platform and create
specific variations using the latest skills and techniques. These ideas
represent a product family approach to staffing projects and argue for a
delineation between design and technical implementation.
Managing Towards a Better Future
Companies can manage themselves toward a better future by thinking in
terms of the product family, multidimensional product cores, and the policies
required to achieve and sustain core capabilities. Management must fashion
planning horizons and financial commitments towards periods longer than
current practice in many companies. Management must also provide
multifunctional design teams to stay together longer than current practice.
The more diverse a corporation's various businesses, the greater will be the
pressures not to do these things.
We present a framework for managing new product development in Figure
12. Product families consist of a common core and variations that are
refinements and extensions of that core for specific market niches. Different
functional aspects of the product core undergo substantial improvements on
a periodic basis. More flexible and powerful product platforms, new
manufacturing processes to improve unit costs and quality, new techniques
and technologies to provide service, and channel improvements become part
of a new generation of the product core. The improvements contained within
a new generation improve all the products within the family that use the
product core. If a company can enhance the capabilities under girding the
product core, the result should be better products. Conversely, if core
capabilities dissipate, the product core will loose its competitive edge as will
its product offspring. Ideally, the percentage of the product core's contribution
to individual products as whole should increase from generation to
generation.
Insert Figure 12 here
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For the product family idea to have impact, we believe that the firm must
consider several basic steps. First, management must transform product
planning into product family planning that includes generations of product
cores, the product platforms within these cores, and the market niche product
variations within a family. Second, management must adapt its budgeting to
this type of planning. In many companies, individual new product efforts
compete for resources. In our way of thinking, a company must try to
consolidate these individual efforts into basic product families. Each family
requests multiple year commitments from senior management based on its
plans - a major part of which is for product core development, and the other
major part, for the completion and marketing of specific products.
The development of product cores, if well managed, presents a compelling
basis for achieving rapid delivery cycles in the creation of new products. If
one adopts a product family approach to making new products, then a strategy
to "speed management" emerges. A company must be patient and forward
thinking in developing product cores. The completion of a strong product
core then facilitates the far more rapid development of new product
variations. In fact, rather than release a single new product, the firm may
simultaneously introduce many products, each aimed at a specific market
niche. Concurrently, the company must begin designing the product
platform for the next generation of the family. Product obsolescence is
inescapable. The issue is who takes control of the process. Winning
companies retire their own products rather than let competitors do it for
them.
1 Teece, D., 'Profiting from Technological Innovatio Implications for Integration,
Collaboration, Licensing and Public Policy," Research Policy,VoL 15, No. 6,1986, Pp. 285-306;
Prahalad, C. K. and G. Hamel, 'The Core Competence of the Corporation," HaroardBusiness
Review, Vol. 68, No. 3, May-June, 1990, Pp. 79-91.
2 Quinn, J.B., T. L Doorley and P. C. Paquette, 'Technology in Services: Rethinking Strategic
Focus," Sloan Management Review, VoL 32, No. 2, Winter 1990, Pp. 79-87.
3 Sanderson posited that "virtual designs" serve as the basis for a series of 'product
realizations" within particular generations of a product family. See: Sanderson, S., "Cost
Models for Evaluating Virtual Design Strategies in Multicycle Product Fanilies", Center for
Science and Technology Policy, Rensseilaer Polytechnic Institute, 1991 and forthcoming in
Journal of Engineeringand Technology Management..
Meyer and Utterback
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II'
4 Henderson, R and K. Clark, Architectural Innovation: The Reconfiguration of Existing
Product Technologies and the Failure of Established Firms", Administrative Science Quarterly,
Vol. 35, 1990, Pp. 9-30
5 Freeman, C., The Economics of IndustrialInnovation (Second Edition), MIT Press, Cambridge,
MA, 1986; Cooper, R. G., Winning at New Products,Addison-Wesley, Reading, MA, 1986;
Maidique, M. A. and B.J. Zirger, 'The New Product Learning Cycle," Research Policy,Vol. 14,
No. 6, December, 1985, Pp. 299-314.
6 Utterback, J.M., 'Innovation and Industrial Evolution in Manufacturing Industries," in Bruce
R. Guile and Harvey Brooks (Eds.) Technology and Global Industry: Companies and Nations in
the World Economy, Washington, D.C.: National Academy of Engineering - Series on
Technology and Social Priorities, 1987, Pp. 16-48; Roberts, E.B. and M.H. Meyer, 'New
Products and Corporate Strategy, "Engineering Management Review, Vol. 19, No. 1,Spring
1991, Pp. 4-18.
7 Sanderson and Uzumeri, op cit.
8 The four major innovations were miniature stereo headphones, miniature super flat motors,
disk drive mechanisms, and small, rechargeable Ni-Cd batteries.
9 Lehnerd, A., Revitalizing the Manufacture and Design of Mature Global Products," in Guile,
B. and Brooks, -L (Eds.), Technology and Global Industry: Companies andNations in the World
Economy, Washington, D.C.: National Academy of Engineering Press, 1987,Pp. 49-64.
10 By simply varying the length of the motor field, power from 60 to 650 Watts could be
achieved.
11 The use of events and years to anchor data gathering and analysis over a span of time has
been used to study and illustrate that successful R&D teams pursue a number of alternative
technical solutions before arriving at final solutions: Allen, T. J., Managingthe Flow of
Technology, Cambridge, MA: MIT Press, 1977, Pp.. 13-26.
12 A fifth basic dimension, service, has been made part of our research with other companies.
13 For a discussion of the use of graphical display techniques to present quantitative
information see: Tufte, E., The Visual Display of Quantitative Information, Graphics Press,
Cheshire, CT, 1983.
14 For the turnkey systems family, seven individuals participated in the study. For the
horizontal application family, ten individuals participated. The study team for the
peripherals family had nine individuals. In our new work with companies, we are applying
the same method to long term customers of a company's products to validate self assessments
and gain new perspectives on competitive competencies.
15 We settled on these four dimensions of core capability based on the literature. We are also
examining core capabilities in a fifth Service dimension in our current work.
16 In our work with other firms, major internal manufacturing processes involved in a product
family have been identified as core capabilities for data gathering and analysis.
Meyer and Utterback
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17
The metric used to assess capability was as follows:
5.
Best in class - industry leadership
4. Above par
3. OnPar
2. Below Par
1. Worst in class
In our current work, this assessment scale is being further anchored by having participants
identify competitors who represented best in class" or close to it for each core capability during
the years included in the study.
18 The underlying databases for these studies can be quite large. For example, over a thousand
data points were gathered for horizontal application family alone. We computed standard
deviations to examine the variance in responses among participants for each core capability.
These have been left out of this article to simplify the presentation.
19 In our work for other firms, participants have requested that we weight certain core
capabilities more heavily than others to reflect their importance in the products being studied.
20 Prahalad and Hamel, op cit.; Quinn, Doorley, and Paquette, op t.
21 The scale for perfonrmance was:
5. Amongst the most successful new business development efforts in the company
4. Above par
3. OnPar
2. Below Par
1. Amongst the least successful new business development efforts in the company
22 In another study at the same company, we have gathered data on individual product
performance for recent years. Grouping individual products into their respective families
provided a cross check on the validity of the executives' relative assessments. Cross checks for
earlier years were not feasible because performance data for individual products were not
recorded.
23 The scale for market growth was:
5. > 25% per year rapid growth
4. > 10% and < 25%: fast growth
3. > 5and < 10%: moderate growth
2. >= 0% and < 5%: slow growth
1. < 0%: contracting market
24 The scale for level of competition was:
5. Many competitors, with several dominant firms
4. Many competitors, but no dominant firms
3. A few large competitors
2. A few small competitors
1. No competitors
25 The scale for effective product life cycle was:
5. 5 or more years
4. 4 years
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3. 3 years
2. 2 years
1. 1year
26
Sony spent approximately twenty years in basic research for the development of its video
camera products: Cusumano, M., Y.Mylonadis, and R. Rosenbloom, "Strategic Maneuvering and
Mass-Market Dynamics: The Triumph of VHS over Beta," International Center for Research on
the Management of Technology, Working Paper 40-91, 1991.
27 Abernathy, W.J. and JM. Utterback, "Patterns of Innovation in Technology," Technology
Review, Vol. 80, No. 7, 1978, Pp. 40-47; Foster, R.N., 'Timing Technological Transitions,' in M.
Horwitch (ed.), Technology in the Modern Corporation,The MIT Press, Cambridge, MA, 1986;
Abernathy, W. J. and KIB. Clark, 'Innovation: Mapping the Winds of Creative Destruction,"
Research Policy,Vol. 14, No. 1,1985, Pp. 3-22; Tushman, M. and P. Anderson, 'Technological
Discontinuities and Organizational Environments," Administrative Science Quarterly,Vol. 31,
1986, Pp. 439-465.
28 Meyer, M.and E. Roberts, "Focusing New Product Strategy for Corporate Growth,' Sloan
Management Review, Summer 1988, Vol. 29, No. 4, Pp. 7-16; Quinn, Doorley, and Paquette, op
cit.
Meyer and Utterback
Page 18
Figure 1
Patterns in Product Strategy
Product Family Approach
Time
X
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/
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I
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Three Product Family Maps
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1981
1982
1983
1984
1985
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1988
1989
1990
1991
1992
1993
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