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Why is NPD important?
- - 12% premium over non-inovating competitors.
- - Innovation was a top strategic priority.
- - over 50% of sales come from products introduced in the last 5 years.
- - 95% of new products fail to achieve an economic return.
What are some impediments to NPD Success (7)
- 1. risk averse corporate culture (reluctant to take risks)
- 2. Lengthy development time
- 3. Difficulty selecting the right ideas
- 4. uncertainty of outcomes
- 5. rapidly changing technologies
- 6. changing customer needs
- 7. aggressive global competitors.
How can managers overcome impediments and improve outcomes?
through strategies for success
what are the 3 development strategies and describe them?
- 1. Maximize fit with customer requirements- superior value proposition... must offer compelling features, greater quality, more attractive pricing, better value than competing products.
- 2. Minimize Time Cycle- Goal is to reduce development cycle time...
- 3 Control Development Costs- High ROIC (return on investment capital) . companies want a higher return.
What are the 4 NPD Timing strategy option?
- 1. First to Market- innovation culture, able to create and then dominate the market against fast followers.
- 2. Fast Follower- Firm must be very good with innovation and have strong r&d, and be good at figuring out why the first mover failed to exploit the market so they can leapfrog fast and grab the market.
- 3. Niche- Focus on specific niche market, requires a close connection to customers on what they want as far as product differentiation.
- 4. Reactive- Firms that are followers and have a focus on operations, have a wait and see approach and look for low risk opportunities, will copy proven innovation.
what does research show?
research shows that business's that can do both radical and incremental innovations make more money and successfully create more new products.
what are the 3 different NPD strategies?
development strategies, timing strategies, level of focus strategies.
How should you map NPD projects according to?
- 1. levels of risk (high, medium, low)
- 2. resource commitment levels(high, medium, low)
- 3. timing of cash flows (long/short term)
What are NPD Organization Design principles?
- 1. designing motivating jobs
- 2. structure
- 3. integrating
- 4. rewards and on going measure and monitoring