Categories of new products
•
•
•
•
New-to-the-world ( 3M Post-It Notes)
New product lines for firm
Additions to existing lines
Improvements and revisions to existing
products
• Repositioning
• Cost reductions
Resource expenditure by NPD
phase
Type of
Activity
Predevelopment
activities
Development
&testing
Evaluation
(screening,
business
analysis,
project
approvaCom
mercializatio
nls)
% of Total Project
% of
% of
PersonDollars
days
7
16
4
54
61
23
Deficiencies in NPD processes
·
·
·
·
·
·
·
A lack of market orientation
Poor quality of execution
Moving too quickly
Not enough up-front homework
Lack of product value to customer
Lack of focus, too many products
Lack of disciplined approach
NewProdTM Study Results on
NPD Success (102 successes, 93 failures,
102 companies)
• Product has to offer unique benefits and
superior value for money to customers
• Market orientation leading to marketing
research and launch tasks done well
• Leveraging technology capabilities and
executing well
Stanford Innovation Project Study
Results on NPD Success (86 successes
and 86 failures)
• Strong R&D with strong interface with both
manufacturing and customer
• Technically superior and unique products
• Positive market environment: first to market
and growing market
• Significant value to customers
• Leverage capabilities and resources
Five ways to improve cycle time
profitably
• Do it right the first time
• homework and definition
• organize around a true cross-functional
team
• employ parallel processing
• prioritize and focus
Managing complex risky
decisions
• Break into smaller decisions
• each decision process should reduce the risk
of the next stage
Managing risk
• Lessen the amounts at stake
– if the uncertainties are high keep the amount at
stake low
– as the uncertainties decrease the amount at
stake can be increased
– incrementalize the decision process
– be prepared to pay for relevant information to
reduce risk
– provide for bail-out points
Uncertainty-Stakes relationship
over time
Risk-Stakes in an Out of Control
NPD Process
Marketing Plan
Flow Chart
Stage-Gate Launch Plan
Meshing