Innovation Strategy Management Lecture 10

Programme Part 1 – The basis of Innovation Part 1 – The basis of Innovation Part 2 – Innovation and New Product Development Part 2 – Innovation and New Product Development Part 3 – Innovation and Technology development Part 3 – Innovation and Technology development Part 4 – Innovation and Intellectual Property Part 4 – Innovation and Intellectual Property Part 5 – EU Green paper of Innovation Part 5 – EU Green paper of Innovation Part 6 – Innovation policies in different countries Part 6 – Innovation policies in different countries

Part 2 Innovation and New Product Development

Lecture 10: Managing the new product development team I New products as projects New products as projects The key activities that need to be managed The key activities that need to be managed NPD across different industries NPD across different industries

Managing the NPD team New products as projects New products as projects The key activities need to be managed: The key activities need to be managed: Assembling knowledge Assembling knowledge The generation of business opportunities The generation of business opportunities Existing productsExisting products TechnologyTechnology Unexploited patentsUnexploited patents Customers and vendorsCustomers and vendors Sales forceSales force Senior and top managementSenior and top management Brainstorming and synecticsBrainstorming and synectics IndividualsIndividuals

NPD terminology NDP terminology Definition Business opportunity A possible technical or commercial idea that may be transformed into a revenue-generating product. Product concept A physical form or a technology plus a clear statement of benefit Screening A series of evaluations, including technical, commercial and business assessments of the concept Specifications Precise details about product, including features, characteristics and standards Prototype/pilot A tentative physical product or system procedure, including features and benefits

NPD terminology NDP terminology Definition Production The product produced by the scale-up manufacturing process Launch The product actually marketed, in either market test or launch Cojoint analysis A method for deriving the utility values that consumers attach to varying levels of a product's attributes Commercialisations A more descriptive label would be market introduction, the phase when the product is launched and hopefully begins to generate sales revenue Commercial success The end product that meets the goals set for it, usually profit

The key activities that need to be managed Business managers and the managers of project teams need to know what particular activities should be undertaken. Business managers and the managers of project teams need to know what particular activities should be undertaken. From this partitioner standpoint it is more useful to view the NPD process as a series of linked activities. From this partitioner standpoint it is more useful to view the NPD process as a series of linked activities.

The NPD process as a series of linked activities

Maintaining an organizations knowledge base

Sources of business opportunity

Developing products concepts Turning business opportunities into product concepts Turning business opportunities into product concepts For a product idea to become a new product concept, Crawford argues that three inputs are required: For a product idea to become a new product concept, Crawford argues that three inputs are required: form form technology technology need. need.

Form: This a the physical thing to be created (or un the case of a service, the sequence of steps by which the service will be created). It may still be vague and not precisely defined. Form: This a the physical thing to be created (or un the case of a service, the sequence of steps by which the service will be created). It may still be vague and not precisely defined.

Technology: In most cases there is one clear technology that is at the base of the innovation. Technology: In most cases there is one clear technology that is at the base of the innovation.

Need: The benefits gained by the customer give the product value. Need: The benefits gained by the customer give the product value.

The screening of business opportunities Do we have the necessary commercial knowledge and experience? Do we have the necessary commercial knowledge and experience? Do we have technical knowledge to develop the idea further? Do we have technical knowledge to develop the idea further? Would such a product be suitable for our business? Would such a product be suitable for our business? Are we sure there will be sufficient demand? Are we sure there will be sufficient demand?

Screening! Dreams and reality Dreams and reality Initial screen, entry screen Initial screen, entry screen Customer screen, concept testing Customer screen, concept testing Technical screen, technical testing Technical screen, technical testing Final screen Final screen Business analysis Business analysis

Development of prototypes Development of prototypes Technical testing Technical testing Market testing and consumer research Market testing and consumer research Market introduction Market introduction Launch! Launch!

Marketers claim that consumer research techniques are now so sophisticated that full-blown tests are no longer necessary. Besides, once they have invested in R&D plus new plant, and created an advertising campaign, they might as well go national immediately. The fixed costs are so high that you might as well get on with it, says Mark Sherrington of marketing consultancy Added value. Management Today

NPD across different industries Cross-functional teams helped shorten the development of times of truly innovative products. Cross-functional teams helped shorten the development of times of truly innovative products. More bureaucratic structures may provide better outcomes for less innovative products. More bureaucratic structures may provide better outcomes for less innovative products.

Classification of NPD activities across different industries