Learning Objectives

4-1: Explain why new product development is vital for organizations.

Developing and introducing new products is vital to companies because they enable firms to expand their market share and stay ahead of the competition. They also allow the firm to survive in an intensely competitive global marketplace. Businesses will fail if they offer the same products day in and day out. Customers will stop buying the old products, sales will eventually drop off, and the firms’ revenues and profits will decline. The product life cycle helps us understand the way in which most products are introduced, marketed, and eventually decline and fail.

4-2: Describe the approaches companies use to develop new products.

Two common approaches to new product development approaches are (1) the traditional approach and (2) the Stage-Gate® approach. In the traditional approach, the process begins with generating ideas for a new product and ends with its final launch or commercialization. The Stage-Gate® approach is a conceptual and operational road map, in which the new product development process is divided into distinct stages and cross-functional teams are used to move the product from one stage to the next.

4-3: Demonstrate how new strategies have improved the way which new products are designed and tested.

In recent years, customers have demanded products with greater variety with more and better features, as well as products that are safer, longer lasting, easier to use, and less costly to maintain. To respond to these customer expectations and to increasing environmental and health concerns, companies have devised new strategies for designing, producing, delivering, and disposing of products. Some of these strategies are modular design; robust product design; design for manufacturing and assembly; design for reliability; mass customization; design for disposal, remanufacturing, and recycling; and quality function deployment.

4-4: Discuss some new technologies that have allowed for faster new product development.

The use of new technologies such as rapid prototyping, virtual reality, and computer-aided design have enabled companies to introduce quickly greater variety of products of higher quality and with better features, as well as products that are safe and environmentally friendly.

4-5: Explain the global product-development process, and describe how organizations are increasingly using it to gain a strategic advantage.

The global product development process involves working collaboratively with suppliers and skilled engineering teams dispersed around the world to develop new products. By forming such strategic partnerships with suppliers and other stakeholders, companies can create integrated global product teams to produce better products more quickly and more cost effectively. In addition to introducing innovative new products that exceed customer expectations, companies can also maximize the financial and operational productivity of the product development process.

4-6: Describe how the collaboration of the members of a supply chain can improve product development.

Collaboration among supply chain members facilitates accurate and timely information flow among the members. Consequently, the right quality product is brought into the market on time. Elements of supply chain collaboration such as the early involvement of the supply chain members, creating a clear supply chain design, multistage quality testing, and understanding the operating process of each supply chain member greatly enhances the success of the new product development process.

4.7 Identify the unique challenges service organizations face when designing their products, including the tools and methods they use to do so.

Design of services, unlike the design of a product, presents a unique challenge because services are intangible experiences offered to customers. Standardizing service is difficult because services are unique experiences that are customized for each consumer and must be delivered at varying points in time. The tools and methods used to design services are adapted from a variety of disciplines including product design, interaction design, and graphic design, the social sciences, and traditional business modeling and analytical methods. Some tools and methods used in service design include video-ethnography and service system design matrixes.

4.8 Discuss some of the legal, ethical, and sustainability issues that affect firms developing new products and services.

From a legal perspective, companies involved in developing new products need to ensure that the goods and services they produce are safe and do not harm consumers. From an ethical perspective, companies must make every effort to ensure that the products they design are safe. Therefore, companies involved in developing new products should strictly adhere to legal and ethical standards, as well as develop strategies needed to design products and services with care that will prevent expensive lawsuits and damage to the company’s reputation. In addition to legal and ethical requirements, sustainability issues also have an impact on the new product development process. To incorporate sustainability into new products, companies have to develop strategies that take into account all environmental, health, safety, and cost aspects of the product.

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