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PRODUCT DEVELOPMENT

PRODUCT DEVELOPMENT. 3 . Lesson Rünno Lumiste. The Product Planning Process. Takes place before formal start of project development Considers the portfolio that firm owns Ensures that product development follows company main development, business strategy

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PRODUCT DEVELOPMENT

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  1. PRODUCT DEVELOPMENT 3. Lesson Rünno Lumiste

  2. The Product Planning Process • Takes place before formal start of project development • Considers the portfolio that firm owns • Ensures that product development follows company main development, business strategy • CONTROL QUESTION: How to design product portfolio?

  3. EXERCISE • Examples of product portfolio • What parameters differ products in portfolio?

  4. The Product Planning Process 2 • What product development projects should be conducted? • What is proportion and mix of new products, new platforms and derivative products? • How different projects relate to each-other? • Timing and sequence MISSION STATEMENT FOR TEAM • What market segments are targeted? • What new technologies should be incorporated to new products • Constraints • Financial targets • Budget and time for project

  5. Sources of information and deficiencies • Marketing, research, customers, current product development teams, benchmarking of competitors. • Inadequate coverage of target markets • Poor timing • Non-balance between development capacity and number of projects • Poor distribution of personne • Initiation and cancelling of weak projects • Frequent changes in direction

  6. Four Types of Product Development Projects • NEW PRODUCT PLATFORMS New product family based on common platform. Familiar markets and products. • DERIVATIVES OF EXISTING PRODUCTS Extend existing product platform. Existing markets • INCREMENTAL IMPROVEMENTS OF EXISTING PRODUCTS Modifying existing products to satisfy customers • FUNDAMENTALLY NEW PRODUCTS Radically different products to new and unfamiliar markets. Risk vs. Long time development

  7. The process • Prioritizes projects • Allocates resources • Completes pre-project planning

  8. The Product Planning Process Ulrich, Eppinger 2008 Multiple products IDENTIFY OPPORTU-NITIES Evaluate and Prioritize Projects Allocate Resources and Plan Timing Complete Pre-Project Planning Product Development Process Mission Statements Product plan Portfolio of products

  9. STEP 1: Identifying OpportunitiesOpportunity funnel • Marketing and sales personnel • Research and technology development organizations • Current product development teams • Manufacturing and operations organizations • Current and potential customers • Suppliers, inventors, and business partners

  10. Passive and active collection of opportunities • Documentation of complaints • Interviews with lead users (for modifications) • Trends in lifestyles, demographics and technology • Suggestions from customers (through sales and service people) • Benchmarking to competitors (everyone has something interesting) • Tracking the status of emerging technologies • CREATE LIST OF OPPORTUNITIES

  11. Benchmarking (Andreasen et al. 1989, V.Reedik materials)

  12. STEP 2: Evaluate and Prioritize projects • Competitive strategy • Market Segmentation • Technological Trajectories • Product Platform Planning • Evaluating Fundamentally New Product Opportunities • Balancing the Portfolio

  13. COMPETITIVE STRATEGY (Porter) • Technology leadership (empasis on technology) • Cost leadership (Cost control, superb processes, better management of system) • Customer focus (Following certain customer groups, product portfolio) • Imitative (Fast development process)

  14. Market segmentation • Product segment map • Parameters for product segmentation • EXERCISE • Segmentation parameters

  15. Technological trajectories. Technology S-curve Ulrich, Eppinger 2008 Copier product performance Digital technology Light-lens technology TODAY TIME

  16. Platform development projects and family of products Ulrich, Eppinger 2008 Research and Technology Development Platform A Platform B Project Platform Product Development Product Release Derivative Product Platform Time

  17. Platform development projects and family of products • Limited number ofplatformsispossible • Technologyroadmap (Producttechnologyroadmap) parametersrelatedtotime • http://www.ic.gc.ca/eic/site/trm-crt.nsf/vwapj/textile-textiles_eng.pdf/$file/textile-textiles_eng.pdf • http://www.ic.gc.ca/eic/site/trm-crt.nsf/eng/h_rm00051.html

  18. New opportunities • Market size • Market growth rate • Compition intenity • Own knowledge of product • Own knowledge of market • Fit to product mix • Fit to capabilities • Patents and IP • Existense of product champions in the firm

  19. Balancing of Portfolio • Risk • Return • Market attractiveness • Product-process change matrix

  20. Product-process change matrix Next Generation Process Addition to Process Family Minor Process Enhancement New Core Processes No Process Change New Core Product Breakthrough Development Projects Next Generation Product Platform Development Projects Addition to Product Family Derivative Product Development Minor Product Enhancement Current Product/ Process Support No Product Change

  21. STEP 3: Allocate Resources and Plan Timing • Resource Allocation • Not overcharging certain persons • Project Timing • Timing PRODUCT INTRODUCTIONS • Technology readiness • Market readiness • Competition • The Product Plan

  22. STEP 4: Complete Pre-Project Planning • Mission Statements (look next slide) • Brief description of product • Benefit propositions • Key business goals • Target market • Constraints • Stakeholders • Assumptions and Constraints (Manufacturing, Service, Environment, other constraints • Staffing and Other Pre-Project Planning Activities

  23. Mission Statement: Multifunctional Office Document Machine • Product Description • Benefit Proposition • Key Business Goals • Primary Market • Secondary Markets • Assumptions and Constraints • Stakeholders

  24. STEP 5: Reflect on the Results and the Process • Assessing quality of pre-planning • Opportunity fullek • Product plan fit to firm strategy • Does plan face opportunities facing the firm • Leveraging existing products? • Does core team accept mission statement challenges? • Is mission statement consistent? • Is there any overconstrainment? • How can process planning improved?

  25. THANK YOU FOR ATTENTION

  26. EXERCISE FOR HOME • Find company that interests you • What is companies business strategy • Which is companies product line? • Newest products Create Technology roadmap • Look to links in slide 17

  27. CanadianItsroadmaphttp://www.ic.gc.ca/eic/site/trm-crt.nsf/vwapj/wireless-sansfil_eng.pdf/$file/wireless-sansfil_eng.pdfCanadianItsroadmaphttp://www.ic.gc.ca/eic/site/trm-crt.nsf/vwapj/wireless-sansfil_eng.pdf/$file/wireless-sansfil_eng.pdf

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