New Products Management: Opportunity Identificaiton

Question 1

Why do firms need new product development?

Answer 1

Without new product development, a firm will lose its competitive advantage, due to its product becoming undifferentiated, or a competitor having a product that the firm doesn’t.

This can result in price cuts and reduced market share, or ultimately the death of the firm.

Question 2

Given a good Product Development Process, how many product Ideas does one need in order for at least one to succeed

Answer 2

4 on average

Question 3

6 Categories of new Products

Answer 3

1. New to the world (really new): Inventions that create a new market
2. New to the firm (new product lines): Products that take the firm into a new category
3. Additions to existing product lines: (addition to product lines)
4. Existing product improvement (current products made better)
5. Repositioning: (new use or application)
6. Cost Reduction: New products that replaces existing ones in a line, (offers client similar features, but lower cost

Question 4

New product process

Answer 4

A process that takes a new product from product definition through to product launch and post launch

Question 5

PIC

Answer 5

Product Innovation Charter

The product innovation charter can be thought of as a strategy for new products.
It ensures that the new product team develops products that are in line with
firm objectives and strategies and that address marketplace opportunities

Question 6

Product Portfolio Management

Answer 6

Product portfolio management helps the firm assess which new products would be the best additions to the existing product line, given both financial and strategic objectives.

Question 7

New Product Process Phases

Answer 7

1. Opportunity Identification and Selection
2. Concept Generation
3. Concept/Project Evaluation
4. Development
5. Launch

Question 8

The Goal of a New Product Process

Answer 8

To increase the odds of success, by managing down risk and uncertainty

Question 9

Fuzzy Gate

Answer 9

An evaluation task that includes conditional Go decisions. Like when a product concept is given the Go ahead, on the condition that they will perform some additional task

Question 10

Hollow Gate

Answer 10

When a team makes a full Go decision but fails to commit any resources to the project.

Question 11

Problem with Hollow Gate approvals

Answer 11

Results in too many projects underway, cost overruns, and launch delays.

Question 12

What happens when innovation stops?

Answer 12

“innovation is a prerequisite for sustained growth. No
other path to profitable growth can be sustained over time. Without continual innovation, markets stagnate, products become commodities, and margins shrink.”

Question 13

When does the New Product Process end?

Answer 13

When the product is successful

Question 14

Three main streams of activity that feed strategic planning for new products?

Answer 14

Ongoing marketing planning
Ongoing corporate planning
Special opportunity analysis

Question 15

4 new opportunity categories

Answer 15

An underutilized resource
An new resource
An external mandate: (Changes in market or External Environment conditions)
An internal mandate: (Change in company goals, etc)

Question 16

Opportunity Identification

Answer 16

The process of creatively recognizing such opportunities is called opportunity
identification. The opportunities are carefully and thoroughly described, then analyzed to confirm that a sales potential does, indeed, exist

Question 17

Why might a firm NOT exploit an opportunity?

Answer 17

Too risky
Don’t have the skills
Not enough money
Doesn’t align with the company strategy

Question 18

What is the main question that the first phase of the new product process seeks to answer?

Answer 18

Where should we look? (what sandbox should we play in)

Seeks to set direction

Question 19

What is the Risk of launching “Really new products” compared to launching “incrementally new products”

Answer 19

Firms that launch pioneering
new-to-the-world products into the market incur a significantly lower long-term
survival rate than those that enter the market later. That is, the long-term advantage of going first is greater for firms that launch incrementally new products
than for those that launch really new ones! Still,

Question 20

What off-sets the lower survival rate of “Truly new” products.

Answer 20

The lower survival rate for a new-to-the-world product is offset by higher profits, since the market for such a
product is often larger and also often offers bigger profit margins.

Question 21

What is Google’s failure rate for innovative products?

Answer 21

60%

Question 22

The time horizon for incubation

Answer 22

3 - 5 years

Question 23

The biggest risk in developing a “truly new” product?

Answer 23

Will the market value the product

Question 24

VOC

Answer 24

Voice of the customer

Question 25

How can we involve the VOC early on in the process of developing “New” products

Answer 25

Focussed prototypes

Question 26

How can we reduce the risk of “New” product development?

Answer 26

By involving the VOC early on in the process, using “probe and learn” or “lickety-stick” approaches

Question 27

The time horizon for business process development

Answer 27

approx 2 years

Question 28

Product Platform

Answer 28

A product platform is defined as a set of systems and interfaces that form a common structure. It is from this common structure that a family, or stream, of products, can be developed efficiently. In simple terms, a product platform can be thought of as a basis for all individual product projects within a family of products. 3

Question 29

Brand Equity

Answer 29

The value of an established brand. Usually measured as the amount of free promotion and integrity the brand equity brings to a new item that uses it.

Question 30

3 Kinds of Platforms

Answer 30

Product
Brand
Category

Question 31

Where to look for new opportunities

Answer 31

1. New Trend
2. New Location
3. New Activity
4. New Industry
5. Fringe Market that is becoming mainstream
6. Bottlenecks
7. Ripple effects of opportunities

Question 32

4 Sections of a PIC

Answer 32

Background
Focus
Goals
Guidelines

Question 33

2 major problems that arises from not having a PIC

Answer 33

scope creep and unstable product specifications

Question 34

Scope Creep

Answer 34

Scope creep refers to the constant changing of a project’s definition: Is the project

Question 35

Dual Drive Strategy of the PIC

Answer 35

Combined Technological and Market drivers that create the Area of Focus described in the PIC

Question 36

TPM Linkage

Answer 36

Turning Technical Specification into product features that satisfy a Market need.

Question 37

Two sources of the Market Drivers in the PIC

Answer 37

End-user and End-use

Question 38

Three types of Goals and Objectives as described in the PIC

Answer 38

three types:

(1) profit, stated in one or more of the many ways profit can be stated;
(2) growth, usually controlled, though occasionally charter is used defensively to help the firm hold or retard a declining trend; and
(3) market status, usually increased market share.

Question 39

Three types of guidelines included in the PIC

Answer 39

Degree of Innovativeness
Timing
Miscellaneous

Question 40

Three types of innovativeness

Answer 40

Innovate (New Product, New Use, New Market)
Improve (
Imitate

Question 41

Three types of timing

Answer 41

First, quick second, slow, and late