Product Strategy Flashcards
What is the purpose of a product strategy?
To both focus and integrate team in order to achieve delegation
Why do firms need product strategies?
- To focus teams who are involved in the NPD
What is included in a product strategy?
- Mission
- Objectives
- Platforms
- Portfolio and more!
How many types of product strategies are there?
Deschamps & Nayak, 1995
- 5
What are the 5 types of product strategy?
Deschamps & Nayak, 1995
- Product proliferation
- Value
- Design (outward appearance)
- Innovation
- Service
Explain Deschamps & Nayaks 1995 Product Proliferation product strategy type:
Deschamp & Nayak, 1995 Product proliferation - Covers the entire market - Launch many new products - Market response to the product determines their support of a product
Explain Deschamps & Nayaks 1995 Value product strategy type:
Deschamp & Nayak, 1995
Value
- Creates products of a high quality and emphasis on reliability
- Continually improves
Explain Deschamps & Nayaks 1995 Design (Outward Appearance) product strategy type:
Deschamp & Nayak, 1995
Appearance
- All about style, the aesthetics, touch and ease of use
Explain Deschamps & Nayaks 1995 Innovation product strategy type:
Deschamp & Nayak, 1995
Innovation
- Typically a market pioneer
- Specialises in technological and market innovations
Explain Deschamps & Nayaks 1995 Service product strategy type:
Deschamp & Nayak, 1995
Service
- They’re at the forefront of service development by being excellent at customer relations/service and distribution
How many types of differentiation aside from product are there?
Hooley et al, 2008
- 5
How many ways can you differentiate a product?
Garvin, 1987
- 8
Discuss the ways in which you can differentiate a product:
Garvin, 1987
- Form: size, shape
- Features: Things aside from the basic function
- Performance quality
- Conformance quality: Product identical and meets the promised performance level
- Durability: Expected life
- Reliability: Probability of malfunction/failure
- Repairability: Ease/cost of repair
- Style: Aesthetics, is it difficult to copy
What is a product portfolio?
The range of items sold by a business
Why is a product portfolio important to a firm?
- Key to survival
- Develops a range of products
- Obsolescence becomes less of an issue
What is a way in which we can analyse a product portfolio of a firm?
Use of the:
Boston Consulting Group Matrix
What elements are there in the Boston Consulting Group Matrix?
- Question Mark (High growth & low share)
- Dogs (Low share & high growth)
- Star (High share & growth)
- Cash Cow (High share & low growth)
Outline the Question Mark of the Boston Consulting Group Matrixes:
- Build these products selectively
- Focus on a defendable niche
- Harvest the remainder
Outline the Dog of the Boston Consulting Group Matrixes:
- Should either harvest or divest
- Focus on a defendable niche
Outline the Star of the Boston Consulting Group Matrixes:
- High share & growth
- Invest in it to maintain
- Leadership in market
Outline the Cash Cow of the Boston Consulting Group Matrixes:
- Hold sales/share
- Defend position in the market
- Use excess cash to support the NPD
Why is innovation important?
Freeman, 1982
- Not to innovate is to die
Therefore it is key to survival
How many organisation characteristics are there that firms can show that facilitate innovation?
Trott, 2008
- 9
What are the characteristics that firms can show that facilitate innovation?
Trott, 2005
- Growth orientation
- Vigilance
- Commitment to technology
- Acceptance of risks
- Cross-functional cooperation
- Receptivity
- Slack
- Adaptability
- Diverse range of skills
What can be done to improve the innovative ability of a firm?
- Training
- Become more open to risk and failure
- Encourage creative activity
- Rewards
- Remove roadblocks (don’t just say no!)
- Allow for slack
What is one way to manage a NPD?
the Product Innovation Charter (PIC)
What is a PIC?
It outlines the conditions in which the organisation will operate
What is included within a PIC?
- Corporate mission
- Strategic fit
- Portfolio planning
Why is it important to have a PIC?
- It acts as a mission statement for product development activities
- Delegation, financing, and personal assignment can be done
How many stages are there in a PIC?
4
Outline the stages of a PIC:
- Background
- Focus
- Goals/objectives
- Guidelines
Outline the Background stage of the PIC:
- Details as to why the strategy was developed
Outline the Focus stage of the PIC:
- Focus an area that is suited to an organization’s capabilities
- Is it market or technology focused
Outline the Goal stage of the PIC:
- What is the NPD purpose
- Long .v. Short term
- Profit/Growth/Market status?
Outline the Guideline stage of PIC:
- Degree of innovativeness: first to market?
- Timing product brought to market
- Any other miscellaneous guidelines
What are some of the factors that influence resource allocation in a product portfolio?
- Objective Measures:
sales, profit, market share - Subjective Measures:
competitive strength, risk, PLC stage
What is product proliferation?
Is when organizations market many variations of the same product. e.g. different colour combinations, product sizes and different product uses
