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Business Market Management 3 rd edition New Offering Realization Chapter 6

Section III: Creating Value Business Market Management, 3 rd edition Chapter 6-

Chapter 6: New Offering Realization ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Definition ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Business Market Management, 3 rd edition Chapter 6- Realization Strategy Creating Superior Value Through New Market Offerings Realization Process Market-Oriented Research and Development

I. Realization Strategy Business Market Management, 3 rd edition Chapter 6-

Realization Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6- However, most firms find new offering realization seldom delivers these rewards

Causes for Failure ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6- Fact: 35%-80% of new offerings fail

Critical Success Factors for New Product Performance ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Processes that differentiate Successful New Product Development Teams ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6- Chances of product success using these 5 methods = 98%

Building a Successful Strategy ,[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Development Strategy Framework Business Market Management, 3 rd edition Chapter 6- Market Strategy Technology Strategy (adapted from: Wheelright & Clark 1992) Technology Assessment & Forecasting Market Sensing Aggregate Project Plan Project Management & Execution Development Goals & Objectives Post-Project Learning & Improvement

Development Goals & Objectives ,[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Learning ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Efficiency ,[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Speed-to-Market ,[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Project Objectives ,[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6- Every development project will confront tradeoffs among these 4 objectives. Making the correct choices is paramount to the project’s success (Smith and Reinertsen)

Development Speed or Time-to-Market ,[object Object],Business Market Management, 3 rd edition Chapter 6-

Product Cost ,[object Object],Business Market Management, 3 rd edition Chapter 6-

Product Performance ,[object Object],Business Market Management, 3 rd edition Chapter 6-

Development Program Expense ,[object Object],Business Market Management, 3 rd edition Chapter 6-

Aggregate Project Plan ,[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Constructing an Aggregate Project Plan ,[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Mapping the Kinds of Development Projects ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Business Market Management, 3 rd edition Chapter 6- Research & Advanced Development Projects Derivatives & Enhancements Addition to Product Family New Gen Product New Core Product Product Change Less More Alliances and partnership projects (can include any of the above project types) Mapping the Five Types of Development Projects R & D Derivative Platform Breakthrough Less More Process Change Derivative projects Platform projects Breakthrough Projects New Core Process Next Gen Process Single Dept. Upgrade Incremental Change

Making Capacity Decisions ,[object Object],Business Market Management, 3 rd edition Chapter 6- “ When organizations overextend their resources, productivity declines, the number of projects ‘in process’ increases, projects take longer to complete, and the rate of project completion declines.” -- Wheelwright and Clark

Capacity Decisions ,[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6- Remember: building in slack can reduce overall development time!

Gaining Critical Skills and Capabilities ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Concurrent Engineering in Realization Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Point-Based vs. Set-Based Concurrent Engineering (CE) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Set-Base CE & Flexible Market Offerings ,[object Object],Business Market Management, 3 rd edition Chapter 6- ,[object Object],[object Object],[object Object]

Outside Development Relationships & Networks ,[object Object],Business Market Management, 3 rd edition Chapter 6- Seeking or developing the resources in-house or from the outside varies and depends on the kind of project and resources required. Technical Economic Social Political

Alternative Development Structures ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Aims of Development Relationships and Networks Business Market Management, 3 rd edition Chapter 6- Technical Economic ,[object Object],[object Object],[object Object],[object Object],Social Political ,[object Object],[object Object]

Decision Considerations for Outside Relationships & Networks ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

II. Realization Process Models Business Market Management, 3 rd edition Chapter 6-

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Key Decisions Key Milestones A General Realization Process Model: Phases of Development Functional Activities Concept Development Product Planning Detailed Design & Development Commercial Preparation Market Introduction Phase I Phase II Engineering Propose new technologies; develop product ideas; build models; conduct simulations Choose components & interact with suppliers; build early system prototypes; define product architecture Do detailed design of product & interact with process; build full-scale prototypes; conduct prototype testing Refine details of product design; participate in building 2 nd phase prototypes Evaluate & test pilot units; solve problems Evaluate field experience with product Marketing Provide market-based input; propose & investigate product concepts Define target customer’s parameters; develop estimates of sales & margins; conduct early interact with customer Conduct customer tests of prototypes; participate in prototyping Conduct 2 nd phase customer tests; evaluate prototypes; plan marketing rollout; establish distribution plan Prepare for market rollout; train sales force and field service personnel; prepare order entry / process system Fill distribution channels; sell & promote; interaction with key customers Manufacturing Propose & investigate process concepts Develop cost estimates; define process architecture; conduct process simulation; validate suppliers Do detailed design of process; design & develop tooling & equipment; participate in building full-scale prototypes Test & try out tooling & equipment; build 2 nd phase prototypes; install equipment & bring up new procedures Build pilot units in commercial process; refine process based on pilot experience; train personnel & verify supply channel Ramp up plant to volume targets; meet targets for quality, yield, & cost

Augmenting Services in Realization Process Models ,[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

“ Next Generation” Realization Process Models ,[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

III. Market-Oriented Realization Business Market Management, 3 rd edition Chapter 6-

Market-Oriented Realization ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Market-Oriented Research and Advanced Development ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Current Challenges for Market-Oriented Research ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Creating Focused Research Centers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Connecting Research with the Market ,[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6- One-on-one Information Exchanges Structured group-to-group interactions Home and Away Sessions Off-hour events One-on-one meetings Innovation Summits “ Design Bursts” and “Deeper Dives”

Market-Oriented Development Business Market Management, 3 rd edition Chapter 6- “ Market-oriented development is a critical factor for enduring market leadership.” --Gerard Tellis & Peter N. Golder

Business Market Management, 3 rd edition Chapter 6- Four ways for firms to be marketed oriented in its development of new offerings: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

IV. Summary Business Market Management, 3 rd edition Chapter 6-

Summary ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Business Market Management, 3 rd edition Chapter 6-

Business Market Management, 3 rd edition Chapter 6- All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

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