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In . Companies typically see new product development as the first stage in generating and commercializing new products within the overall strategic process of Product Life Cycle Management used to maintain or grow their market share. TYPES OF NEW PRODUCTS There are several general categories of new products. Some are new to the market (ex. DVD players into the home movie market), some are new to the company (ex. Game consoles for Sony), some are completely novel and create totally new markets (ex. the airline industry). When viewed against a different criteria, some new product concepts are merely minor modifications of existing products while some are completely innovative to the company. These different characterizations are displayed in the following diagram. ''Types of new products'' THE PROCESS There are several stages in the new product development process...not always followed in order: #Idea Generation (The "fuzzy front end" of the NPD process, see below)
#Idea Screening
#Concept Development and Testing
#Business Analysis
#Beta Testing and Market Testing
#Technical Implementation
#Commercialization (often considered post-NPD)
These steps may be iterated as needed. Some steps may be eliminated. To reduce the time that the NPD process takes, many companies are completing several steps at the same time (referred to as concurrent engineering or ''' Time To Market '''). Most industry leaders see new product development as a ''proactive'' process where resources are allocated to identify market changes and seize upon new product opportunities before they occur (in contrast to a ''reactive strategy'' in which nothing is done until problems occur or the competitor introduces an innovation). Many industry leaders see new product development as an ongoing process (referred to as ''continuous development'') in which the entire organization is always looking for opportunities. For the more innovative products indicated on the diagram above, great amounts of uncertainty and change may exist, which makes it difficult or impossible to plan the complete project before starting it. In this case, a more Flexible Approach may be advisable. Because the NPD process typically requires both engineering and marketing expertise, Cross-functional Team s are a common way of organizing projects. The team is responsible for all aspects of the project, from initial idea generation to final commercialization, and they usually report to senior management (often to a vice president or Program Manager). In those industries where products are technically complex, development research is typically expensive, and product life cycles are relatively short, strategic alliances among several organizations helps to spread the costs, provide access to a wider skill set, and speeds the overall process. Also, notice that because engineering and marketing expertise are usually both critical to the process, choosing an appropriate blend of the two is important. Observe (for example, by looking at the See also or '''References''' sections below) that this article is slanted more toward the marketing side. For more of an engineering slant, see the Ulrich and Eppinger reference below. People respond to new products in different ways. The adoption of a new technology can be analyzed using a variety of Diffusion Theories such as the Diffusion Of Innovations theory. PROTECTING NEW PRODUCTS When developing a new product many legal questions arise, including: How do I protect the innovation from imitators?; Can the innovation be legally protected?; For how long?; How much will this cost?. The answers are complicated by the fact that several legal concepts may apply to any given innovation, product, process, or creative work. These include Patent s, Trademark s, Service Mark s, Tradename s, Copyright s, and Trade Secret s. It is necessary to know which are applicable and when each is appropriate. This varies somewhat from jurisdiction to jurisdiction. The advice of a lawyer that specializes in these matters and is knowledgeable with your corporate philosophy regarding IP protection is essential. Generally, Copyright s are fairly easy to obtain but are applicable only in certain instances. Patents on the other hand, tend to involve complex claims and approval processes, tend to be expensive to obtain, and even more expensive to defend and preserve. FUZZY FRONT END The Fuzzy Front End is the messy "getting started" period of new product development processes. It is in the front end where the organization formulates a concept of the product to be developed and decides whether or not to invest resources in the further development of an idea. It is the phase between first consideration of an opportunity and when it is judged ready to enter the structured development process (Kim and Wilemon , 2002; Koen et al., 2001). It includes all activities from the search for new opportunities through the formation of a germ of an idea to the development of a precise concept. The Fuzzy Front End ends when an organization approves and begins formal development of the concept. Although the Fuzzy Front End may not be an expensive part of product development, it can consume 50% of development time (see Chapter 3 of the Smith and Reinertsen reference below), and it is where major commitments are typically made involving time, money, and the product’s nature, thus setting the course for the entire project and final end product. Consequently, this phase should be considered as an essential part of development rather than something that happens “before development,” and its cycle time should be included in the total development cycle time. Koen et al. (2001, pp.47-51) distinguish five different front-end elements (not necessarily in a particular order): 1. Opportunity Identification 2. Opportunity Analysis 3. Idea Genesis 4. Idea Selection 5. Concept and Technology Development The first element is the opportunity identification. In this element, large or incremental business and technological chances are identified in a more or less structured way. Using the guidelines established here, resources will eventually be allocated to new projects.... which then lead to a structured NPPD (New Product & Process Development)strategy. The second element is the opportunity analysis. It is done to translate the identified opportunities into implications for the business and technology specific context of the company. Here extensive efforts may be made to align ideas to target customer groups and do market studies and/or technical trials and research. The third element is the idea genesis, which is described as evolutionary and iterative process progressing from birth to maturation of the opportunity into a tangible idea. The process of the idea genesis can be made internally or come from outside inputs, e.g. a supplier offering a new material/technology, or from a customer with an unusual request. The fourth element is the idea selection. Its purpose is to choose whether to pursue an idea by analyzing its potential business value. The fifth element is the concept and technology development. During this part of the front-end, the business case is developed based on estimates of the total available market, customer needs, investment requirements, competition analysis and project uncertainty. Some organizations consider this to be the first stage of the NPPD process (i.e., Stage 0). The Fuzzy Front End is also described in literature as "Front End of Innovation", "Phase 0", "Stage 0" or "Pre-Project-Activities". SEE ALSO
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