What is new product development?
Discussions About New Product Development
New product development is the set of activities that begins with the perception and analysis of a market opportunity, and ends in the production, sale, and delivery of a new product. Risk and uncertainty accompany new product development, and there are many challenges to “integrating the fuzzy front-end of new product development.” The best way to manage the front-end process is to use a systematic approach to integrating your business strategy and technology strategy.
Such a formal process requires a sequence of steps that transforms a set of inputs into a desired set of outputs. A technology strategy defines the venture’s approach to the development and use of technology. It specifies the venture’s “technological goals and the principal technological means for achieving both those technological goals and the business goals of the organization.” The significance of a technology strategy is that it explicitly links the management of a venture’s technology activities to its larger business strategy.
From the technology strategy perspective, technology must be planned and managed so that it is consistent with, and supportive of, the overall business objectives of the venture. A technology strategy aids in quality assurance, coordination of the venture team as informing them on what to do and when, establishing milestones that anchor the schedule of the overall development, management for comparing the plan to action, and helping to identify opportunities for overall improvement.
Establishing Product Specifications
You need to efficiently flesh out the minimum set of features to ensure that the targeted customer will buy the new product, the minimum resources required to accomplish this, and the fastest, most efficient method to getting it done. We have a proven methodology for helping you to establish product specifications. First, it must be assumed that lead-user input and customer needs are clearly identified. Generally, these customer needs are expressed in the “language of the customer.” And in order to provide specific guidance about how to engineer, develop, and market a new product, your team needs to establish a set of specifications that will indicate in precise, measurable detail what the product has to do in order to be commercially successful for your venture.
Taking this step not only ensures that the product is focused on true customer needs, but it can help you identify latent or hidden needs as well as explicit needs, provide a database for justifying the product specifications, create an archival record of your development process, ensure that no critical customer need is missed or forgotten, and develop a common understanding of customer needs among the venture team.
New product specifications also help determine the following:
– annual production volume
– sales for total lifetime
– sales price
– number of unique parts
– development time
– development team size
– development cost
– production investment
Creating Market Entry Strategies
Success comes from insight about the markets, insight about the opportunity, and an ability to execute. Market entry is a strategic challenge and cannot solved with brute corporate force.
Facing these facts, some questions pose an immediate concern:
– What is your proposed entry strategy?
– What is the best way to move a new product into a market?
– How can you get immediate traction?
– Will you have problems with your technology, if it is too disruptive, to overcome the cultural/organizational dynamics of the industry norms?
– Are you facing any particular seasonalities unique to your industry?
– What about “must-attend” trade shows, and when are they?
– Do you have to make alliances for suppliers or marketing channels?
– Are there any governmental hurdles, barriers, or approvals to go through?
– What about special regulations, like third-party spec’ing and testing?
Choosing a market entry strategy depends on the ecosystem that you are going into, the positioning that you seek, and the product portfolio of the existing organisms in the space. Once you select a market entry strategy, it begins to drive everything else. This includes your business strategy, your business model, how you recruit and build your venture team, the resources you will need, your marketing and sales strategy, and it even drives how much money you will need and your leads on potential investors.