book chapters 1-5

8/13/2019 Book Chapters 1-5

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Opportunity Identification and Selection: Strategic Planning for New ProductsCHAPTER 3

Details the first phase of the New Product Process Phase (Opportunity analysis andstrategic planning)

2 strategic elements!product innovation charter (PIC) & product portfoliomanagement

Company within a Company group of people who lead the development of a new product whom represents all of

the necessary functions, ie develop and allocate budget, do financial analysis andprojections, assign and implement tasks

gives direction of where to go and not go as well as providing objectivesNew Product Strategy Inputs

product platform!set of systems and interfaces that form a common structure fromwhich a family of products can be developed efficiently

oeffected by corporate strengths

sometimes more efficient to design a line of products rather than one single product platforms can evolve through bottom-up or top-down (corporate and platform strategy

development), pg 61

applies to service industry as well tradeoff: customers want distinct products while common products produce the

greatest cost efficiencies brand platforms, pg 62 brand equity!value of an established brand that can be measured through market

research category platform!group levels are mostly targeted therefore any strategic change in

one are may influence all new products developed under that category group level opportunity identification is important, pg 64

o modern trends of consumers: just-in-time life, sensing consumers, transparentself, in search of enoughness, virtual made real, co-creation

noncorporate strategic planningo technical or supply-push conditions, marketing, manufacturing, and others all

can effect new product work

o product-market matrix, pg 66o diversification, pg 67

The Product Innovation Charter Typically a document prepared by senior management designed to provide guidance

to the business units on the role of innovation Reminds us that the strategy is for products and innovation and it is a charter Strategy statements can be for an entire firm, a standing platform, or for a specific

product Needed to direct focus and time as well as directing resources, defines what sandbox

the team is in or wants to be in and also where it does not want to be, pg 70

Scope creep & unstable product specifications, pg 70


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The Sections of the PIC1. Area of Focus Section of the PIC

Core competencies!where to look for charter arena definitions2. Focus achieved through: technology, product experience, customer franchise, and end-useexperience

Dual-drive strategy, pg 72 Technology drivers

o Turning technical specifications into product features that satisfy market needso T-P-M linkage, pg 72

Market drivers, pg 73o Coproducerso Mass customizationo Variation through distributors

Combinations: Dual-Drive, pg 733. Goals & Objectives Section of the PIC

Goals are long term directions whereas objectives are short term measures of success (3) types of goals and objectives

o profit, growth, and market status4. Guidelines

Degree of innovativenesso First-to-market!through leveraged creativity or applications engineering, pg

75o Adaptive producto Imitation or emulation

Timing (first, quick second, slower, late)

Misc Guidelineso Product integrity, pg 76

How to Prepare a PIC Look for opportunities Evaluate, rate and rank opportunities Fill out the PIC form

Product Portfolio Analysis: New Products Strategic Fit

Used to check strategic balance and maintain a dependable, continuous flow ofproducts

Low market newness vs high market newness, pg 80 Extent of product change vs extent of process change, pg 81 Strategic Decision Group portfolio evaluation model, pg 82


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Creativity and the Product ConceptCHAPTER FOURPreparation

PIC provides a playing field and rules for the new product

Top managers should keep control over innovative projects and stay involved to maintaindirection

Two packages of activityone to encourage creativity and another to thwart roadblocksThe Product Concept

New products only come into being when they are successful, launched products are still intentative forms3 inputs required by the creation process, need all three for a product innovation

Formphysical thing or w/ a service, the sequence of steps

Technologythe source from which the form was attainedNeed/benefitproduct only has value if it provides some benefit to the customer

See decaf coffee example if theres a question, pg 100

Product concept statementwhen 2/3 inputs are there, tells the customer and technical

people what they need to know in order to review a product and decide if it should bedeveloped, pg 102

Two Basic Approaches for Developing the Product ConceptReceiving product ideas created by others and a managed process run by a team, most

industries use a ready-made sourceConcept generation should be an ACTIVE processImportant Sources of Ready-Made New Product Ideas

Sources include employees, suppliers, end users, stakeholders, consulting engineering firmsCrowdsourcing, pg 106End user concepts are usually product improvements over product innovations but it dependson the industry

End users w/ wide diversity of perspectives and experiences are beneficialNow incorporated into new product teams

Lead users are more likely to be elicited by firms, front edge of trends, best understanding ofproduct faced, use problem-find-solve method, pg 107

Issue is identifying lead users in the first placeImportant to ask all consumers for outcomes or what they want the product to do for themBenefits from tinkerers, ie dentists, medical technicians, farmersToolkits for user innovation, pg 109

Open InnovationExternal search process used to complement a companys own internal resources

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book chapters 1-5

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