Professional Documents
Culture Documents
19
The Management of New Product Development, and Entrepreneurship
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
19-2
The
19-3
Electronic
Smith Corona typewriter company missed out on word processing and is now out of business. Microsoft was quick to embrace graphic user interface programs and now is dominant in the software business.
The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
19-4
Refers to demand changes for a product over time. Embryonic stage: product is not widely accepted and has minimal demand.
Growth
stage: many consumers seek out the product and buy it for the first time. stage: demand peaks since most buyers already have the product and only buy replacements. stage: demand falls off perhaps since the product is obsolete.
The McGraw-Hill Companies, Inc., 2000
Mature
Decline
Irwin/McGraw-Hill
19-5
Demand
Embryonic Stage Growth Stage Mature Stage Decline Stage
Time
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
19-6
Figure 19.2
19-7
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
19-8
Maximize Manufacturability
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
19-9
Early to market products can command premium prices and will have a longer life cycle. Can add new features before competitors
2) Maximize fit with Customer Needs: most products fail because they were not designed to fit customer needs.
Ensure customers want the product features before adding them to the product.
The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
19-10
Poor quality in a new product can doom its acceptance even if quality is fixed later on. Quality problems usually result from rushing product to market.
4) Maximize Manufacturability: the efficiency with which the product is built impacts its time to market.
Ease of production can shorten development time. Efficient production can also avoid production problems and improve quality.
The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
19-11
Principle 1: Use a Stage-Gate Development Funnel; managers often try to fund too many projects at once. Stage 1 considers all new ideas. Those that are feasible and meet the strategic goals of the firm go through Gate 1. Stage 2 focuses on the product development plan and then evaluated at Gate 2. Only the best continue. Stage 3 issues a contract book and focuses on responsibilities, budgets, resources, etc. This is the symbolic launch of the formal development.
The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
19-12
Gate 1
Gate 2
Ideas
Ship
Stage 1
Irwin/McGraw-Hill
Stage 2
Stage 3
The McGraw-Hill Companies, Inc., 2000
19-13
Principle 2: Cross functional teams seem to be a crucial part of effective product development. Core members of the team are the 3 to 6 people primarily responsible for the development effort. Must ensure there is coordination and communications between team members. Often are located physically together Successful teams will develop a clear sense of their objectives and share a common mission.
Irwin/McGraw-Hill
19-14
19-15
Principle 3: Concurrent Engineering: Traditional approach follows a sequential flow between steps. This results in long development times and poor quality when managers do not communicate between departments.
Development managers may design the product without talking with manufacturing, resulting in problems.
By
working concurrently, design and production issues are considered together. Production concerns are addressed while the product is designed and can still be changed.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
19-16
A Sequential Process
Process Design
Commercial Production
Parallel Process
19-17
Irwin/McGraw-Hill
19-18
Successful product development is a critical component of a successful firm. While most managers know this, it can be difficult to actually carry out good development strategies. Many managers have difficulty in releasing control of their part of the process and allowing groups to take part.
Product development often requires a break in the traditional organizational culture to be highly successful.
The McGraw-Hill Companies, Inc., 2000
Irwin/McGraw-Hill
19-19
Entrepreneurship
Entrepreneurs
are people that notice opportunities and take the initiative to mobilize resources to make new goods and services.
Many entrepreneurs work for themselves and start new firms. Intrapreneurs: work in large companies and contribute to innovation in the firm. Intrapreneurs that become frustrated with the lack of opportunity at some large firms often leave and form their own business called a new venture.
Irwin/McGraw-Hill
19-20
Characteristics of entrepreneurs--most share these common traits: Open to experience: they are original thinkers and take risks. Internal locus of control: they take responsibility for their own actions. High self-esteem: they feel competent and capable. High need for achievement: they set high goals and enjoy working toward them.
Irwin/McGraw-Hill
19-21
To become involved in an entrepreneurial firm: Start your own business as an entrepreneur. Work for a growing entrepreneur in their firm.
Develop a plan for the new business Design a plan to guide the business similar to a product development plan.
with no plan usually fail Franchising allows you to purchase a plan and experience of existing firm to reduce risk.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000
Firms
19-22
Step 1 Step 2
Notice Product opportunity and develop a basic business idea: What Goods/services to produce and who are the Customers/Markets?
Conduct Strategic Analysis (SWOT) to identify: Strengths, weakness, opportunities, threats.
Step 3 Step 4
Irwin/McGraw-Hill
Prepare a detailed Business Plan including Mission, goals, strategic and financial objectives, resources required, and a timeline of events.
The McGraw-Hill Companies, Inc., 2000
19-23
Intrapreneurship
A learning organization encourages employees to act as intrapreneurs. To help, form: Product Champions: person that takes ownership of a product from concept to market. Skunkworks: group of intrapreneurs kept separate from the rest of the firm.
New
Venture Division: allows a division to act as its own smaller company. Rewards for Innovation: link innovation by workers to valued rewards.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 2000