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Challenges in New Product Development

The document discusses several reasons why new product development requires flexible organizational structures rather than a single best structure. It explains that globalization has increased international competition and opportunities for global expansion, requiring effective global NPD teams that leverage diverse perspectives from different parts of a global organization. The integration between marketing and R&D depends on factors like customer sophistication and technology intensity of the industry. Virtual worlds may help firms trial new products. The "Valley of Death" between research and commercialization challenges product champions due to a lack of attention to later-stage investment decisions despite early non-economic investments. New products are necessary for firms but can be viewed as evil from the perspective of projects that fail or are canceled.

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530 views2 pages

Challenges in New Product Development

The document discusses several reasons why new product development requires flexible organizational structures rather than a single best structure. It explains that globalization has increased international competition and opportunities for global expansion, requiring effective global NPD teams that leverage diverse perspectives from different parts of a global organization. The integration between marketing and R&D depends on factors like customer sophistication and technology intensity of the industry. Virtual worlds may help firms trial new products. The "Valley of Death" between research and commercialization challenges product champions due to a lack of attention to later-stage investment decisions despite early non-economic investments. New products are necessary for firms but can be viewed as evil from the perspective of projects that fail or are canceled.

Uploaded by

rox ram
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

1. Explain why there is not one best organizational structure for new product development.

Globalization is a major market trend today, one characterized by both increased international
competition as well as extensive opportunities for firms to expand their operations beyond current
boundaries. Effectively dealing with this important change, however, makes the management of global
new product development (NPD) a major concern. To ensure success in this complex and competitive
endeavor companies must rely on global NPD teams that make use of the talents and knowledge
available in different parts of the global organization. Thus, cohesive and well-functioning global NPD
teams become a critical capability by which firms can, effectively, leverage this much more diverse set of
perspectives, experiences, and cultural sensitivities for the global NPD effort.

[Link] how sales representatives, especially with technology-intensive products, play a crucial role in
the success or not of a new product and illustrate how their image as ‘second-hand car dealers’ is
pejorative and incorrect.

The extent of the integration required between marketing and R&D depends on the environment within
which product development occurs. In many technology-intensive industries where the customer’s level
of sophistication is low, the extent of integration required may be less than that needed where the
customer’s level of sophistication is high and the technology intensity of the industry low. For example,
in the pharmaceutical industry (high level of technological intensity), customers’ sophistication is low
because they are unable to communicate their needs. They may want a cure for cancer but have no idea
how this can be achieved. On the other hand, in the food industry (low level of technological intensity),
customers can articulate their needs. For example, they can explain that a particular food might taste
better or look better if it contained certain ingredients.

[Link] whether the virtual world (such as Second Life) may be able to help firms trial new products.

Virtual worlds, such as the prominent Second Life (SL), developed by San Francisco- based Linden Lab,
offer unprecedented opportunities for companies to tap the innovative potential of consumers and
consumer communities.

[Link] why the ‘Valley of Death’ presents a genuine challenge to product champions or project
leaders.

The road between a discovery generated from basic research to a commercial product or process is long
and, according to some, rife with significant roadblocks. Innovators and investors alike routinely claim
that a 'funding gap' or 'Valley of Death' exists between basic research and the commercialization of a
new product. We show that the standard explanations for underinvestment in R&D are not the cause of
this phenomenon. Rather, the Valley of Death occurs only in the presence of 'non-economic'
investments (such as government expenditures on basic research) that are made in very early-stage
research without sufficient attention to the likely investment decisions at later stages of the innovation
process. Other implications for the Valley of Death of government funding of R&D are also considered.
Some policy implications of these findings are provided.

5.‘New products are a necessary evil.’ From whose viewpoint are they necessary and from whose
viewpoint are they evil?
As new product projects evolve and progress through each stage of development, many will be rightly
canceled or stopped for a wide variety of reasons. The failure of a product idea to be developed into a
product is not necessarily a bad thing.

Business is not a ‘necessary evil’ – it has to be an ‘essential good’, whose role is going to be ever more
critical as we face up to the realities and challenges of living as one people on our one planet in the
twenty-first century.

Necessary Evil is a supers game for Savage Worlds. Inside this twisted Plot Point setting you will find
complete rules on making four-color super-powered characters, a whole slew of adventures weaving in
and out of a resistance story, new Edges and Hindrances, a bestiary of out of this world critters, and
more!

[Link] the many reasons why so many new products fail. Are there additional reasons?

 A lack of independent and unbiased research into the market and target audience
 The product falls short of claims made and suffers bad reviews
 The product defines a new category and requires substantial consumer education—but they
don’t understand it.
 Simple margin rules make a bad pricing policy.
 Weak launch or a poorly executed launch

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