New Product Development Strategies

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With the aftermath of globalization, companies are carefully thinking about the best ways to extend their product and service offering. Thus, product development strategy is critical for their success. Yet, many companies are in defensive mode and merely want to maintain the position in the market place.

However, staying in a holding position is a definite way for companies to be left behind. Innovative thinking that allows for product/service growth is a too sure way for sustainable success. In today’s discussion, we will explore the importance of product development for the growth of businesses, especially in a competitive market.

Launching into new product offerings is not easy. According to one market research, approximately 75% of consumer-packaged goods and retail products fail to earn even $7.5 million during their first year.[1] Harvard Business School Professor, Clayton Christensen, who is the world’s foremost authority on disruptive innovation, suggests that the failure rate of new products may actually be as high as 95%. Product failure rates relate to the number of products that are launched commercially but fail.

Geoffrey A. Moore, the author of Crossing the Chasm, maintains the challenges of product deployment: “… the less successful product is often arguably superior. No content to slink off the stage without some revenge, this sullen and resentful crew casts about among themselves to find a scapegoat, and whom do they light upon? With unfailing consistency and unerring accuracy, all fingers point to—the vice president of marketing. It is marketing’s fault!” Thus, new product development is a risky proposition to senior executives making these critical positions as well as the organization as a whole.

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Businesses that want sustainable growth must develop new product and services often and consistently. Philip Kotler and Kevin Keller, authors of Marketing Management, “In an economy of rapid change, continuous innovation is a necessity. Highly innovative firms are able to identify and quickly seize new market opportunities. They create a positive attitude toward innovation and risk taking, routinize the innovation process, practice teamwork, and allow their people to experiment and even fail.”

In taking any actions on new product development, businesses should think strategically about their product development. Alexander Chernev, the author of Strategic Marketing Management, further argues that managing growth is the most preferred route to profitability compared to just cutting cost.

He outlines four key issues in managing growth, which include: (a) gaining and defending a market position, (b) managing sales growth, (c) new product development, and (d) product-line management. Chernev maintains, “New products and services are the keys to sustainable growth; they enable companies to gain and sustain their market position by taking advantage of the changes in the market to create superior customer value.”

With that said, new product development meaning having the ability to take a product or service idea and convert it into a tangible offering that customers want. The following are the steps that more products undergo for market consumption: (a) idea generation, (b) concept development, (c) business analysis, (d) product development, (e) market testing, and (f) business deployment.

The Ansoff Matrix is a strategic tool for product development, consisting of market penetration, market development, product development, and diversification.[2] In market penetration strategy, organizations seek to grow using its existing product offerings in existing markets. With this strategy in mind, organizations try to increase market share. In a market development strategy, companies try to expand into new markets like new buyers using their existing offerings. In product development strategy, businesses seek to create new products and services targeted at its existing buyers.

In a diversification strategy, an organization tries to grow its market share by introducing new product offerings while at the same time entering a new market. Diversification is the most-risky approach due to simultaneous making new changes (new product, new market). Kotler and Keller further maintain the difficulty of sustainable product success: “It is increasingly difficult to identify blockbuster products that will transform a market, but continuous innovation can force competitors to play catch-up.” The concept sounds easy. However, it is riddled with problems.

Without a doubt, many companies know that product development is a risky business. Although many consumers will proudly proclaim the success of many innovative products like Apple and Google, these same buyers are not aware of the numerous product launch failures in this country.  In our discussion, I demonstrated the importance of product development for the growth of businesses, especially in a competitive market. Failures often lead to innovation.

American great inventor, Thomas Edison, had his own share of failures, but learned how to innovate because of them: “I have not failed. I’ve just found 10,000 ways that won’t work.” Likewise, today’s businesses can also achieve success if they understand how to deploy their products and services to the marketplace strategically. Although there is enormous danger in failure, there is also the opportunity of unforeseen growth. Don’t wait until it’s too late.

Please share your opinion about new product development from your perspective.

© 2017 by Daryl D. Green

 

[1] “Why Most Product Launches Fail” by Joan Schneider and Julie Hall

 

[2] Ansoff Matrix by Quick MBA

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61 thoughts on “New Product Development Strategies

  1. I think you hit the nail on the head when you say, “Failures often lead to innovation.” In a society where results is king second only to the almighty dollar, the value of employee growth is often left in the dust. Companies that prioritize their employees experiencing risk benefit not only the person’s individual growth but the innovation of the company as a whole. Maya Angelou agrees with Thomas Edison, failure is only the step stool to success. In terms of product development, I find companies struggle with how to shift marketing while not alienating a loyal fan-base. Ford, McDonalds, and Shea Moisture are all examples. It is interesting to consider how this advice might apply to service-oriented industries such as hotel chains. How would one grow that product? Thank you for sharing insight on how companies can successfully expand their brand. With percentages such as high as “95% failure rate for new launched products,” we can all use all the help we can get.

    • I think you hit the nail on the head when you say, “Failures often lead to innovation.” In a society where results is king second only to the almighty dollar, the value of employee growth is often left in the dust. Companies that prioritize employees’ experience with risk and failure benefit not only that person’s individual growth but the innovation of the company as a whole. Maya Angelou agrees with Thomas Edison, failure is only the step stool to success. In terms of product development, I find companies struggle with how to shift marketing while not alienating a loyal fan-base. Ford, McDonalds, and Shea Moisture are all examples. It is interesting to consider how this advice might apply to service-oriented industries such as hotel chains. How would one grow that product? Thank you for sharing insight on how companies can successfully expand their brand. With the added knowledge that “the failure rate of new products may actually be as high as 95%” it’s evident we all can use all the help we can get.

      • I agree with your statement regarding companies succeeding in producing new products, but alienating loyal customer base. There is a brand of shirt sold at target, and, every single season, Target rebrands the product. While I am glad that there are new shirts and styles available every year, I am always angry because the original product I enjoyed is altered during rebranding, so much so that the same basic shirt is unrecognizable and fits completely differently. Target would make more money from me (and several people I know who agree with me), if they would continue experimenting in style, but retain the older styles which they try to re-invent every season. If companies cared more about producing a lasting product, they would have customers more able to trust them, instead of customers hyper-aware of the company’s simple desire to push a product that may be purchased, but not enjoyed and remembered by potentially loyal customers.

      • Hi Tyler,
        Thanks for your personal story about Target! You provide an interesting point. Target is attempting to innovate by offering different offerings seasonly. However, the company has loyal customers who do not want any changes.

        All,
        How does a company balance these competing customers’ needs?
        Is it even possible to do so?
        Dr. D. Green

      • In regards to service industries, one of the ways that they can expand their product line by offering service that appeal to a market or demographic outside of the one they usually cater to. For instance, Holiday Inn is an economic hotel chain that caters to individuals trying to travel on a budget. They could try to broaden their horizons by trying to create upscale rooms or buildings that would appeal to higher dollar clients. They could also try targeting longer staying guests by creating extended-stay sections where individuals could find a greater level of living amenities for a weekly or monthly price. Both of these approaches would carry a substantial amount of investment and risk, but could become lucrative if they worked out. WC 124

    • Hello Sharlita, Thanks for your insightful observations!

      You stated: “In a society where results is king second only to the almighty dollar, the value of employee growth is often left in the dust.”

      Interestingly, companies are often too blind to see beyond their own balance sheets. Value does matter, internally (i.e. employees) and externally (i.e. customers). Chernev (2014) maintained that businesses, when developing its product offerings, should seek to create value for three key market players: its targeted customers, its own company, and its collaborators. Ignoring these critical market partners can be fatal.

      All,
      How do organizations seek to create value for all of their key stakeholders when creating new products?
      Dr. Green

      Chernev, A. (2014). Strategic marketing management. USA: Cerebellum Press.

      • When creating a new product, a company is expanding its reach. Many times, new ideas can come from within the company, so allowing feedback from employees (and offering them credit where it is due) is a great way to encourage people within the company to seek its betterment. Susan Adams (2012) writes on the importance of promoting from within the company rather than externally, citing that “not only do external hires get paid more, but for their first two years on the job, they receive significantly lower marks in performance reviews.” Furthermore, on that note, if a company invests enough thought and time into the new product, it can bring in new customers (and money), while offering diversified items and services to loyal customers. Collaborators benefit by opening new deals and partnerships in regards to the industries and elements manufacturing the product. This causes me to think of a candy company, wherein several employees think of a version of the popular candy bar with extra peanuts. They are offered a bonus for their ingenuity, while the customers (old and new) receive a new type of candy, and the manufacturing plant makes new deals with peanut farmers. WC 196

        Adams, S. (2012). Why Promoting From Within Usually Beats Hiring From Outside. USA: Forbes Magazine

      • Hello Dr. Green,
        This is a very interesting question to ask. I would picture the idea is to align the interests of management with those of stakeholders. An article in the Harvard Business Review actually discusses 10 ways to create this “value.”[1] The most important ways to create this value in my opinion is for a company or firm to not manage earnings or provide earnings guidance and to make strategic decisions that maximize expected value, even at the expense of lowering near-term earnings. If an organization is focused more on the quality of their product, rather than the monetary side of how much profit they will be able to make, then the organization will provide a product of better value to the consumer.

        Creating value is probably one of the hardest parts of creating new products because everyone has a different idea or opinion on what product they are seeking, so finding a balance for all stakeholders can be very tricky. [WC-162]

        [1] “Ten Ways to Create Shareholder Value” by Alfred Rappaport

      • Hello Dr. Green,

        In answer to your question, “How does a company balance these competing customers’ needs?
        Is it even possible to do so?” I would say it is certainly a challenge, but it is possible. Ultimately, it’s a matter of supply and demand. Kling (2010) makes it clear- if consumers demand a certain product and put their dollar behind it, companies tend to shift their focus. Continuing Tyler’s case-study of Target: Target has been a forerunner in shifting the mainstream hair care industry. Previously, products catered almost exclusively to one hair type, but Target’s efforts at inclusion have opened the door to more Americans’ pockets. Diversity is in demand and companies are scrambling to meet that supply. In conclusion, each company has identifiers, that sweet recipe which caused them to build such a loyal fan-base in the first place. So long as a company retains those core identifiers whether it be quality, essence, or purpose, it would seem they can innovate to their hearts content. To change that is to risk it all.

        Kling, A. (2010). Efficiency, Supply&Demand, & Market Clearing. Library of Economics&Liberty.
        [WC-187]

  2. I chose to pull a marketing steps from your post Dr. Green: (a) idea generation, (b) concept development, (c) business analysis, (d) product development, (e) market testing, and (f) business deployment.

    I have worked for two businesses that work as excellent examples of this failure experienced when attempting to market new products. The first, a Mexican restaurant which specializes in gourmet salsas, followed the steps perfectly: idea for a new salsa, prototype of salsa, employee testing, ingredients expense analysis, final alterations based on employee testing, public testing, final product. When utilizing this process I saw the restaurant develop new customer favorites and exciting products.

    The other business would put way too much work in idea generation, but never take the time to invest thought and work into the idea, leaving the business stagnant and unproductive. Applying this scientific process may increase the early failure of a product (disliked in surveys, financially unfeasible), but you miss 100 percent of the shots you don’t take.

    WC 164

    • Tyler,

      I like your example from your previous work experience of working at a Mexican restaurant. When reading about product development in this article by Dr. Green I was thinking more of products like iPhones but the last thing I would of thought of as a “new product” would be something a restaurant offers. I like the scenario of salsa being a new product because it shows the different parts of the product life cycle which you listed step by step. If the product (salsa) were to fail then I’m sure you all wouldn’t be serving it to customers anymore based on the fact they weren’t eating it anymore. An article online discussing the product life cycle mentions, “during the maturity stage, the product is established and the aim for the manufacturer is now to maintain the market share they have built up.” I think this is a good example of where the salsa stays in the product life cycle. You all have built it up to what the customers like it to be, and now they will continue to come back and enjoy that salsa for as long as you all maintain it to be the same.

      [WC – 198]

      Product Life Cycle. (n.d.). Retrieved September 13, 2017, from http://productlifecyclestages.com/

  3. Great read Dr. Green!
    I completely agree with your view on new product development strategies.
    You stated: “Although many consumers will proudly proclaim the success of many innovative products like Apple and Google, these same buyers are not aware of the numerous product launch failures in this country.”
    This is so true! Many people view companies, such as Google and Apple, as instant successes. In reality, there were other products similar to Google or Apple that simply failed. Failure is a great thing in my own opinion because it gives people a chance to grow and learn from previous mistakes. For example, our President, Donald Trump, has filed for Chapter 11 bankruptcy 6 times on his companies. To most people, they view that as failure, but Donald Trump found a way to keep his companies afloat, which has made his companies successful.
    It is a lot harder for a company to have a successful start-up than big name companies make it seem, and I think you did a great job of providing insight on just how hard it is! Thank you for sharing! [WC- 183]

    • Hello Austin,
      Thanks for your thoughtful post! Yes, on the surface, most people can failure as a negative trait. Folks, like President Trump, have used this as a stimulus toward success.
      Our failures do not defend define us. 2 Corinthians 4:8 supports for Believers: “We are pressed on all sides, but not crushed; perplexed, but not in despair…”
      If we have the courage to learn from our mistakes (including product development), we are better individuals.
      Dr. Green

  4. Hi Tyler,
    These are some great examples of your personal experience!

    Currently, I am a marketing intern and I can relate to the exact same process that you are describing. Every day I get to be a part of the (a) idea generation, (b) concept development, (c) business analysis, (d) product development, (e) market testing, and (f) business development. It is astounding to see and be a part of the process. Seeing all of the time, work, and energy used up to make the process work has given me a new perspective on all of the everyday products that we take for granted.

    The easiest part is coming up with an idea, and then it begins the long process from idea to reality!
    Thanks for sharing your experience!
    [WC]- 128

  5. Would it be OK if I cross-posted this article to the Dailyst0rmer? It’s a website about having InterCourse with children, listening to Necr0Ped0Sad0Mas0 music and providing instructions on how to commit violence against women. I’ll be sure to give you complete credit as the author. There is no fee; we are simply trying to add more s3xist content for our community and I enjoyed reading your work. If “OK” please let me know via email nkb. Aaron Goldberg, Necr0Ped0Sad0Mas0 producer, member of the Jews Against Fascism Committee, email: AutumnCote@WriterBeat.com

  6. New products and innovation are important for companies, but I think this is especially true for the dot com and app style companies that we see popping up in the past 2 decades. For these types of companies that often offer a very specialized service or product, innovation is necessary to expand its user base and keep its current base invested. Facebook is good example of this. It began as a simple social media network, but its ability to be flexible and adventurous in what it can be as a product led it to expand and achieve a very large market share. According to Google Finance it more than tripled its initial stock price. This can be contrasted with a company such as Twitter, which similarly began as a novel take on a social media network. However, Twitter wasn’t nearly as aggressive in trying to be innovative and create new experiences, and thus it is lagging far behind in influence and profit. WC 150

    Facebook Inc. (n.d.). Retrieved July 26, 2017, from https://www.google.com/finance?q=NASDAQ%3AFB
    Twitter Inc. (n.d.). Retrieved July 25, 2017, from https://www.google.com/finance?q=NYSE%3ATWTR

  7. The world of technology today brings a pace to innovation that has never been there before. There is something new in the industry every single day, and with that comes products that are rapidly losing interest in the market. I believe that with this speed of innovation comes two things, the ability to create more freely and a heavier weight of competition. Since new things are being developed and created daily, people do not feel the pressure to have to get it right on the first try or to become a hit viral success on the first product. They can try out each idea and see what catches on instead of the weight of presenting one thing at the end of the period. With this flooding of innovations into the market comes a high degree of trying to keep up. The companies feel an ongoing pressure to keep pushing out as much information as possible where burn out is inevitable. The reason for the competition and burnout is “external benchmarking”, companies rate themselves based on what other competitors are doing in the market (Chase,2010). These comparisons keep increasing the speed of the new product development strategies.
    (Word Count 194)
    References:
    Chase, R. B. (2010). Operations and supply chain management. Mcgraw Hill.

    • I feel like people might be a little more pressured into getting their product right on their first product because, like you said, they do not want to play catch up. You made a couple great points about how people can wait and see how a certain products reacts to the market, and also about external benchmarking. People that wait and see how a particular product does in the market can possibly avoid catching up, because they can make the newer better version of that product. Based off what I can tell, companies always use external benchmarking. I feel like a lot of times they worry more about comparing their product to the competitors, that they forget to meet the customers’ needs. Great post! [WC-125]

  8. The highlight of the article for me is at the end when you are discussing failures along with the quote from Thomas Edison. One of the most important and challenging parts of growing as a business is failure, and learning how to deal with it. At one point in time in everybody’s life we have had to face failure and learn to bounce back from it. An important aspect of a growing business is the ability to take failure in stride and continually learn from it. Too often people tend to just focus on the success of businesses, and instead they miss out on all the failures that certain business had to endure to become successful. “Given the preponderance of extant theorizing and anecdotal evidence espousing the
    significance of learning from business failure, it is surprising that studies focus overwhelmingly
    on business success” (Mueller, 2016).

    [WC-176]

    Mueller, B. A., & Shepherd, D. A. (2016). Making the Most of Failure Experiences: Exploring the Relationship Between Business Failure and the Identification of Business Opportunities. Entrepreneurship: Theory & Practice

  9. In today’s world, to continually be competitive with other companies in your industry, being able to execute a successful product development strategy is extremely important. There are so many new products that are constantly developed in order to meet peoples needs, that a lot of times a company does not have to design something new, but rather just modify a design from another company. The company would of course have to make some changes to make sure there were no illegal flaws in their design, but this would help save some money in their research and development programs. I agree that if the company wanted to diversify themselves by branching out into a completely new product field that they would be forced to play catch up with the other companies. I think this diversification strategy should only be done if there is a substantial benefit from your product that other companies in this industry are yet to produce. As Mark Zuckerberg says, “the only strategy that is guaranteed to fail is not taking risks.” Product development is a risk reward situation but if the data points to a chance of success, a company must give it a chance. [WC-199]

    • Hello Dalton,
      You made a great point that I did not think of when reading this article! Companies do many times create “new” products that are just a different form of a product from another company. There are two examples that I can automatically think of. The first one is the cameras on the iPhone and the Android. They were both updated and released the same year with the same design and technology, just different formats and placement. The second example would be a makeup sponge that is made into the shape of a water droplet. Many companies have come out with the same product but each one is a little different in terms of color and ability to perform. The products are relatively the same but just a difference in the minor parts of the “design”. Companies care a lot about the design of the products for it to sell and this makes it a key step in the decision-making process. (Chase,2010)
      References:
      Chase, R. B. (2010). Operations and supply chain management. Mcgraw Hill.
      (Word Count: 171)

    • Dalton, I like how you mentioned product research and development. I agree that sometimes it’s better to just upgrade or improve a product or service rather than completely designing an entirely new product. I know from my own experience that I will change to a different brand or organization if they are offering me a better product or service. Nicolette Lakemond states, “Companies that are able to identify critical challenges for each product development project and anticipate their potential effects may increase their product development performance and outperform their competitors” (Lakemond 2013). With that being stated I believe it’s important for a company to always be growing and developing. Great job Dalton!

      References
      Assessing interface challenges in product development projects. (2013). Research technology management, (1), 40. doi:10.5437/08956308X5505078

      (W:C 112)

  10. “Without a doubt, many companies know that product development is a risky business. Although many consumers will proudly proclaim the success of many innovative products like Apple and Google, these same buyers are not aware of the numerous product launch failures in this country.” As I read this I am reminded of a segment on NPR I listened to called “The Island of Misfit Businesses.” Innovating and moving forward is the goal of every business, however, it is easier said than done. Most businesses that push forward and fail simply due to lack of research, but there are some cases where a company has poured their heart and soul into research and were sure that they would succeed and still came up short. This just goes to show, adversity, and uncertainty are unavoidable. However, the entrepreneur will continue to get back up in light of these road blocks.

    • I think the story of Apple is a great example of the exact sort of constancy you’re describing. Looking at the iPhone itself, Steve Jobs really worked his firm’s way into the hearts of the world through such constancy and adaptiveness. With an initial expected development cost of $150 million and 2.5 years of development time (Apple Insider, 2013), it seems that most would be too afraid to undergo such a task. Of course, this story of hard work and aggressive development is still unfolding with the successful release of the iPhone X and the reality of Apple-designed smart homes.
      References
      Bostic, Kevin. (2013.) Behind-the-scenes details revealed about Steve Jobs’ first iPhone announcement. Appleinsider.com

      • Companies can certainly do new product development correctly, but many things have to line up for it to go well. It could be the right product, but is it at the right time for the consumer? It may be the right time, but are you marketing towards the correct consumer? If upper management, the new project development team, and marketing aren’t working together, the new product is likely to fail. I know there are many cases where a company did everything 100% correctly by the book, but it doesn’t work out. It’s a part of doing business!

        WC – 100

  11. Dr. Green,

    This is a really well written piece on new product development. I enjoy this topic because as I have grown up I have gotten to watch products start and fail, and I have also watched products release and take off producing lots of profit. You wrote, “businesses that want sustainable growth must develop new product and services often and consistently” which caught me off guard at first, but really makes sense and resonates with me. At first thought, you would think that this would cause a company to lose money, but when you consider it this is really smart because it allows companies to be able to produce multiple different product offerings that allows the market to pick and choose. Once a product starts to grow, that is when a company can drop other products that aren’t producing growth and spend time on improving the ones that are producing profit. Business to Community explains this process by saying “developing the tangible product or service is only a small part of the new product development process, which includes the complete journey from generating the initial idea to bringing the product to market.”

    [WC – 193]

    Eight Simple Steps For New Product Development. (n.d.). Retrieved September 13, 2017, from http://www.business2community.com/product-management/eight-simple-steps-for-new-product-development-0560298#iSlE43E3eTTyZGz7.97

  12. As stated in the article, “Businesses that want sustainable growth must develop new product and services often and consistently.” For businesses thrive in a market of ever growing global connectivity and competition, they must deliver what is new and cutting edge. This can be done in two ways. Create something new and cutting edge through supplier-customer collaboration. “This interaction effects the shaping of the product design… and can lead to the identification of new opportunities, not previously perceived nor anticipated by suppliers” (Bruce 1988). Or what I call the “iPad Method.” This way the supplier creates a product for which there is no demand and takes it to the masses to let them figure out they cannot live without it. Both of these methods require creating a product that the people want and will make a part of their lives. Ultimately, the consumer must want the product. [WC – 147]

    References
    Bruce, M. (1988). New Product Development Strategies of Suppliers of Emerging Technologies–A Case Study of Expert Systems. Journal Of Marketing Management, 3(3), 313-327.

    • Hi Daniel,

      I totally agree with the article and you that Businesses that want sustainable growth must develop new product and services often and consistently (Green, 2017). It is very necessary because we can easily see new product or changes anywhere and anytime. An objective reality nowadays, enterprises are faced with increasingly stricter business conditions: the increasing demand of consumers, the development of science and technology, and the technology to develop more and more. The life cycle of the product will tend to be shorter. Therefore, new products and services with many good development strategies are very important.

      On the other hand, in my opinion, there are many ways to maintain customer satisfaction without having to create a new product or service. Improving frequently will help your product or service better. It can make customers more loyal. Developing new products is risky and expensive. Companies can delay these losses by continually improving the products they are providing to their customers. (WC-159)

      Reference: Green, D. (2017, July 10). New Product Development Strategies. Retrieved from nuleadership.com

  13. Hey Dr. Green, I enjoyed reading your article about new product development. I liked how you shared the six-step process that every product must undergo before entering into a market. This process includes: “(a) idea generation, (b) concept development, (c) business analysis, (d) product development, (e) market testing, and (f) business deployment” (Nuleadership , 2017). The fact that this process is so lengthy is what stood out to me, because it proves to me that every business must be efficient in the production of a new product. Efficiency is necessary since the process of submitting a new product into a market takes so much time and effort. If businesses are not efficient in their time and efforts, they may begin to fall behind in the market, and will be left playing “catch up” with other competitors. In conclusion, marketers must be efficient in their development of new products in order to set themselves up for success in presenting a new product to the market.
    References:
    Green, D. (2017, July 10). New Product Development Strategies. Retrieved from nuleadership.com
    WC-177

  14. Hello Dr. Green,
    First, I would like to commend you on a well-written and thought out article.
    I completely agree with what you said in the beginning of the article, “staying in a holding position is a definite way for companies to be left behind” (2017). In our day and age if one is not moving forward they are moving backward because competition is the highest it has been in years. Complacency is the most dangerous thing in a business because as soon as one becomes comfortable they are being passed and then losing money. The market place is survival of the fittest so companies need to always pursue avenues that will provide them with the best opportunities to grow and succeed.

    References
    D. Green. (2017, July 10) New Product Development Strategies. Retrieved from
    https://nuleadership.com/2017/07/10/new-product-development-strategies/
    [WC-136]

    • I absolutely agree with your comment about the state of competition. Not only are firms required to compete with other firms – they have to compete with seemingly unrelated entities. Since the scarcest resource available to the consumer is time and we are engaging a busier and busier culture (ABC News, 2017), firms have to work hard to engage the consumer on a regular (or even daily) basis to establish a strong enough relationship to turn a profit. As I stated in a comment below, one of the only ways firms such as retailers may survive is by undergoing a cultural change themselves that is bent on developing long-lasting and local relationships. [WC 112]

      References

      Shabner, Dean. (2017.) Americans: Overworked, Overstressed. Abcnews.go.com

  15. I appreciate your assertion that “staying in a holding position is a definite way for companies to be left behind.” I think a perfect example of failure due to stagnation can be found in the world of retail. With many giants of the retail industry steadily falling (The Atlantic, 2017), it seems clear that SOMETHING must change, but I have noticed many retailers focusing on intensifying their reliance on old systems of operation. While specific firms need to focus on aggressive product development, retailers both in general and individually need to aggressively develop themselves as a product. Do you agree? And if so, what forms do you see this large-scale rebranding taking place? As I can see it, this must occur in two, non-mutually exclusive ways. First, retailers should focus on developing lasting relationships with their customers at the local level since spending is shifting towards relational activities (The Atlantic). Second, a further integration of technology for more efficient decision making and non-revenue generating activities could give retail firms the boost they need (Forbes, 2017). [WC 168]

    References
    Thompson, Derek. (April 10, 2017.) What in the World Is Causing the Retail Meltdown of 2017? Theatlantic.com
    Yohn, Denise Lee. (September 13, 2017.) Future Retail Success Depends On Culture, Not Technology. Forbes.com

  16. Good Evening Dr. Green,

    I liked the quote you stated from Thomas Edison. The ability to take risks in developing new products, and innovative ways to produce a new product, takes some guts. From playing sports my whole life, I realized that you often see failure more than success. How someone responds to failure depends on how much success one will actually have. In saying this, new product development strategies are vital when living in a world where change is inevitable. One must be able to adapt to change and create new products. A business must also evaluate their effectiveness and efficiency as we have talked about in our production and project management course. I personally believe that a business will know when innovation is needed when the business is lacking efficiency or effectiveness in producing the right product. If the product is effective (meeting the needs of the consumer), and is done efficiently (with little or no waste in production), than the business will know that their development strategies are up to date and in line with this forever changing world and markets. “Successful NPD requires a thorough knowledge of your target market and its needs and wants” (NPD 2017). Targeting your target market is crucial when producing a product. Like I have stated before, an effective and efficient produced product will be in the right target market in this changing world.

    Reference: Tourism, Major Events, Small Business and the Commonwealth Games. (2017, July 21). New product development strategy. Retrieved September 14, 2017, from https://www.business.qld.gov.au/running-business/growing-business/becoming-innovative/developing-products/new-products/strategy

    [WC-255]

    • Alex,
      I think your references to the successes and failures in sports is a relevant comparison that I think many people can relate to. I have always thought that a person learns more from their failures than they do from their successes. By evaluating our failures we can determine weather we are effective and efficient. I think you are spot on when you say that innovation is the way to help effectiveness and efficiency. Correcting these errors can be achieved through innovating to find new solutions. Innovation is important for companies to stay competitive, without companies can not grow and without growth a company will eventually fail.

      W.C. [109]

  17. Carol Bagnald a small business owner in the United Kingdom had this to say about bringing growth through innovation in a building economy, “The opportunities lie in having the knowledge of what can be achieved and looking beyond what’s traditionally been done”. I think your article articulates well that innovation is a necessary risk that must be taken for a company to continue to thrive. As you stated this is not something that should be taken lightly. The evidence that 95% of new products fail is just a reminder to all businesses that innovation should be well outlined and planned to give the product the best chance at success. Business is an ever-changing environment that does not allow for complacency and in the current technological era, ideas move faster than they ever have. As soon as a product is deemed a success it is a guarantee that a competitor will emerge. If a company wishes to sustain growth for any period of time, innovation must be embedded deeply in the company’s foundation. Innovation is the agent that drives growth; competition is not only between products anymore. To succeed companies must compete to gain a competitive advantage in innovation.

    Reference:
    Innovation and growth. (2014). Director, 67(10), 46.

    W.C.[198]

    • Mr. Tyler,
      Wonderfully said! I like how you mentioned that 95% of new products fail. Failure seems almost inevitable when it comes to producing a new product. When producing a product, you are immediately taking a huge risks, but for businesses to thrive these days, you must take those risks. In order to ensure that the risk you are taking will succeed, like you stated: “companies must compete to gain a competitive advantage in innovation. Innovation is key! The value of your product can be determined by your innovation. “Open innovation is increasingly being introduced in international and national organizations for the creation of value” (Aranha 2015). Really enjoyed your post!

      Aranha, E. A., Garcia, N. P., & Corrêa, G. (2015). Open Innovation and Business Model: A Brazilian Company Case Study. Journal Of Technology Management & Innovation, 10(4), 91-98.

      [WC-140]

    • Hi Houston,
      Thank for your well-crafted thoughts: “Business is an ever-changing environment that does not allow for complacency and in the current technological era, ideas move faster than they ever have. As soon as a product is deemed a success it is a guarantee that a competitor will emerge.”
      Without careful planning, most businesses will fail in their product launching.
      Dr. Green

  18. Dear Dr. Green,

    In globalization, the new product is an important element in the company’s development and survival. We can easily see a lot of reasons for a new product. Such as due to the continuous face of fierce market competition, to the constantly changing needs of our customers, or to the advances in technology. Companies need many strategies for the new products as well as improve existing products to stabilize sales. Developing and marketing of new products for the market are extremely expensive. In addition, almost products are not able to hold on to. Therefore, many good new product development strategies are very necessary. Continual innovation to improve performance based on common interests is essential to maintaining business success (Barwise and Meehan, 2014).To increase the likelihood of new product success on the market. The companies need analysis the business environment and the capacity of the enterprise in terms of personnel, finance, and equipment. Simultaneously, this draft plan should forecast revenue, profit, market share in the short and long term. (WC-171)

    Reference: Barwise, P., & Meehan, S. (2004). Simply better: winning and keeping customers by delivering what matters most. Boston: Harvard Business School Press.

    • Mr. Long,
      I agree with the importance of Innovation in regard to globalization. I appreciate your insight on the price of new product development as well as the probability that new products would ketch on. Therefore, new product success is vital to long-term sustainability. A due diligence of the external business environment is necessary for products to last in the market. In an article by Qualtrics, there are seven key points to contemplate when assessing a market. These points are market size and growth, segmentation and targeting, trends and market drivers, key competitors, pain points and unmet needs within the market, market readiness, and purchase cycles and purchase history. (Qualtrics, 2017) Great insight Long.

      References:
      “Market and Opportunity Assessments.” Qualtrics, http://www.qualtrics.com/market-research/market-opportunity-assessments/. Accessed 15 Sept. 2017.

      W.C. (125)

  19. Dear Dr. Green,

    Thank you for informing me more on the topic of product development. I was unaware with several pieces of information in your blog post. I found it highly interesting that 95% of product developments fail. However, I do agree that it is important for companies to continue growing and trying to be as innovative as possible. If a company does not try to create new ideas or products they will never be able to grow. Nicolette Lakemond states, ” Product development capabilities are an important source
    of competitive advantage” (Lakemond, 2013). If a company is able to create a new product it could be very beneficial for the organization. Unfortunately, coming up with a new product or service is not an easy task to accomplish it is important to remember that more than often you will fail but it is important to continue to always try to grow and be more innovative.

    References

    Assessing interface challenges in product development projects. (2013). Research technology management, (1), 40. doi:10.5437/08956308X5505078

    (WC: 154)

    • Miranda,
      Thanks for your insight especially your point: “If a company does not try to create new ideas or products they will never be able to grow.”
      I agree! Like humans, effective businesses want to grow.

      All,
      Why do some businesses accept ‘nongrowth’ options for their companies?
      Dr. Green

  20. Product innovation is an aspect of any company that could enrich their business. It allows for competitive advantage in markets, expansion to new customers, and long-term sustainability. The benefits of new product innovation are undeniable. With this being said, product development is not always a necessity in business. There have been countless tragic stories in the business world that have proven that some products are better left alone. In the Forbs article, Is More Product Innovation Really Necessary, author Dave Lavinsky gives the two examples for this point. His examples are of the big mac and new coke. (Lavinsky, 2013) Although product development is not a necessity, innovation in regard to expanding one’s products and services within a company is imperative. I appreciate how Dr. Green understands this concept and realizes the importance of utilizing strategies to attain more market share through new product innovation.

    References:
    Lavinsky, Dave. “Is More Product Innovation Really Necessary?” Forbes, Forbes Magazine, 2 July 2013, http://www.forbes.com/sites/davelavinsky/2013/07/02/is-more-product-innovation-really-necessary/.

    W.C. (166)

  21. Dr. Green, I found this article to be very insightful. One of the more intriguing parts of the article to me was the fact that about 95% of new businesses fail to start up a new product. Of course, there will always be risk involved with a new start up but 95% of companies just seems absurd. What could all of these companies be doing wrong? Does the problem lie with poor management or is the product/service just not nay good? All new startups should have an outline and time table for the goals that they are trying to achieve. If these companies do not have any direction, then they will not succeed on their own. I believe that is partially why so many companies fail.

    Reference:

    Innovation and growth. (2014). Director, 67(10), 46.

    • Josh,

      Your comment was really thoughtful, like you I was really surprised to learn that 95% of new businesses fail. You mentioned some reasons for a business to fail and in the some that you mentioned appear to be in the top eight reasons of why a business fail. Poor management is a big problem, “New business owners frequently lack relevant business and management expertise in areas such as finance, purchasing, selling, production, and hiring and managing employees.” To solve that problem managers should ask for help and get resources that could help them. “To remedy the problem, small business owners can educate themselves on skills they lack, hire skilled employees, or outsource work to competent professionals.”

      Schaefer, P. (2017, August 31). Why Small Businesses Fail: Top 7 Reasons for Startup Failure. Retrieved September 22, 2017, from https://www.businessknowhow.com/startup/business-failure.htm

      (WC-137)

  22. Dr Green,
    I really like your article and found it very interesting. I really like how you said that “failure often leads to innovation”. People tend to get discourage after one of their product does not success, when in contrary they should learn from what they did wrong to get better and creative. In an article in the Forbes, Laurence Lehman explains “Rather than abandon a failed initiative, if you’re able to understand and learn from what went wrong then you’ll be able to improve your offer, product or service and try again and in turn make yourself more creative and thus innovative.”

    Higginbottom, K. (2017, August 09). Why The Ability To Fail Leads To Innovation. Retrieved September 15, 2017, from https://www.forbes.com/sites/karenhigginbottom/2017/08/03/why-the-ability-to-fail-leads-to-innovation/#59c363a736f6
    [WC-122]

    • I agree Suzanne that a lot of people get discouraged if their product is unsuccessful. It is really hard to put a lot of time and effort into a product and see it not do well. I also agree that they should use their failed product as a chance to grow and get better. They can figure out what they wrong, so they know what they need to improve on when developing their next product.

      I have experience getting discouraged after a failed product. My app College Book Me has not done well and I doubted if I could continue to make more apps. I could have easily given up, but I did not because I have the motivation to get better and continue to make apps. According to Chuck Williams in the book “MGMT Principles Of Management” states, “Motivation is the set of forces that initiates, directs, and makes people persist in their efforts to accomplish a goal” (267). I am working on a new app and the app developer who developed Musically is going to develop it. He will also, update my College Book Me app.

      Williams, C. (2017). MGMT9: principles of management. Boston, MA, USA: Cengage Learning.
      (WC 200)

  23. Dr. Green, thank you for a very interesting article. Indeed, companies that do not innovate will be stuck in the back of the pack. However, several examples come to mind where overall successful companies made painful mistakes in new product development. Back in the late 60’s, I think, John Deere began production of the first-of-its-kind 4WD tractor. These tractors have 8 tires and they pivot in the middle. Farmers began buying them and began to realize that they were junk. They were poorly designed, poorly produced, and they were a disaster. Having farmers involved in the design and production process might have helped solve the initial problems (Ogawa,Web).

    The concept was solid and John Deere began making improvements. They are a big enough company that they can afford to take some risks and have a new product fail. Currently, the John Deere 8-wheel 4WD is an industry leading tractor.

    References:
    Ogawa , S., & Piller, F. T. (2006, January 1). Reducing the Risks of New Product Development. Retrieved September 19, 2017, from http://sloanreview.mit.edu/article/reducing-the-risks-of-new-product-development/

    [WC – 173]

    • Hi John,

      Thanks for your John Deere example!
      Your point was clear: “Indeed, companies that do not innovate will be stuck in the back of the pack. However, several examples come to mind where overall successful companies made painful mistakes in new product development.”

      Good companies make mistakes from new product deployment. However, the great companies learn from their errors.

      The mindset is a dynamic one to possess!
      Dr. Green

  24. Hi, Dr. Green. I agree with the fact that a lot of new products fail. According to Daryl Green in the article “New Product Development Strategies” he states, “Harvard Business School Professor, Clayton Christensen, who is the world’s foremost authority on disruptive innovation, suggests that the failure rate of new products may actually be as high as 95%” (Nuleadership, 2017). I believed that a lot of new products would fail, but I could not believe that the percentage would be so high. It is incredible. It just means that it takes a lot for a new product to be successful.

    Failure of a new product can be due to many factors such as how it looks, its effectiveness or the inability to promote the product well. From my own experience, I believe my app College Book Me is a failure. The app does not look appealing, it does not help students sell their books to each other, and I did not promote the product well. I also, need to realize that 95% of new products fail, so I should not be so hard on myself.

    Green, D. (2017, July 10). New Product Development Strategies. Retrieved from nuleadership.com
    (WC 198)

    • Hello Dakotah,
      Thanks for your thoughts!
      I found your comment very interesting: “From my own experience, I believe my app College Book Me is a failure. The app does not look appealing, it does not help students sell their books to each other, and I did not promote the product well.”
      Most product failures can be attributed to poor planning or inadequate marketing…in my personal experience.

      I would encourage you. I’ve had my own product failures as a product developer. Yet, all great inventors have failed at some point. The goal is to learn from your failures to make a better product someday. You are learning this lesson. Stay encouraged!
      Dr. Green

  25. Hi Dr. Green. Thank you for the interesting article. Businesses face many obstacles when trying to find new ways to make money and grow. I’ve seen this first-hand while working for my dad and seeing all he has to go through to create new products for his small business. In your article, “[Alexander Chernev] outlines four key issues in managing growth, which include: (a) gaining and defending a market position, (b) managing sales growth, (c) new product development, and (d) product-line management”.

    My dad works really hard to balance all of these aspects when his customers or research organizations ask him to create a new product. For example, the American Petroleum Institute asked him to create a new product that would help the oil industry tap in to newly found oil reserves. Developing this new product was very time consuming since it had never been done before. While he was working on this new product, he relied on me to continue the production of the existing products to “defend the market position”. While he focused on developing the new product, we had to work very hard on coordinating the “product-line management” so the development did not interfere with day-to-day operations. The entire experience was very challenging not only because of the chaos on the production floor but also because of the inherent variables that come with innovation.

    Green, D. (2017, July 10). New Product Development Strategies. Retrieved from nuleadership.com

    [WC 227]

  26. Dr. Green,

    I like that you mentioned the importance of giving employees the opportunity to fail and demonstrating that is okay. Like you said, Philip Kotler and Kevin Keller discuss highly innovative firms saying, “They create a positive attitude toward innovation and risk taking, routinize the innovation process, practice teamwork, and allow their people to experiment and even fail.” Allowing for space and time to create is necessary. If innovation is something employees must do on the side, the company will never reach the full potential. In addition, if you punish those who invent but fail, you are squelching many possibilities of innovation. As you said in the article, not all innovation is wildly successful. However, you must produce several ideas to find one that will work well for your company. You need many ideas from many people, even if they are not the ideas that you choose to focus on long-term.

    Kotler, P., & Keller, K. L. (2016). Marketing management. New York: Pearson.
    [WC – 152]

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