New product development management

Globalisation is a major market trend today, characterised both by increased international competition as well as extensive opportunities for firms to expand their operations beyond current boundaries. Dealing with this important change, makes the management of global new product development a major concern. To ensure success, companies must rely on global NPD teams that make use of the talents and knowledge available in different parts of the global organisation. Thus, cohesive and well-functioning global NPD teams become a critical capability by which firms can leverage this much more diverse set of perspectives, experiences and cultural sensitivities for the global NPD effort.

Research in factors that influence firm’s ability to develop and introduce new products indicates that team leadership, team ability, external communication, goal clarity and group cohesiveness are the critical determinants of NPD team performance (Sivasubramaniam et. al., 2012).

The valley of death

This is used as a metaphor to describe a discrete segment of development between research and product development. It is associated with a relative lack of resources and expertise in the front end of product innovation. There are more resources on each side of the valley: one side in the form of research expertise and on the other side commercialisation expertise and resources.

The Valley of Death in Markham et al. (2010).

If an idea makes it through the valley of NPD, there is adequate resources availability to take the idea to market. A variety of interlocking roles move projects from one side to another. Significant development takes place before the project enters into the formal product development process. The roles of champion, sponsor and gatekeeper are seen as major actors that work together to develop and promote projects for introduction info the formal NPD process. Champions make the organisation aware of opportunities by conceptualising the idea and preparing business cases. Sponsors support the development of promising ideas by providing resources to demonstrate the project’s viability. Gatekeepers set criteria and make acceptance decisions (Markham et. al., 2010).

NPD across different industries

Innovation and new product development are context dependent. Management of the process is dependent on the type of product being developed. A simple way of looking at this is to divide the range of activities into two categories: technological and marketing activities. Industrial products involve more technological activities such as extensive technical meetings with the customer concentrating on the functional aspects of the product. Food and drinks industries involve more marketing activities such as promotion and packaging.

The marketing / R&D interface

There are many difficulties in managing cross functional teams in technology intensive industries where the technology being used is complex and difficult to understand for those without scientific training. This introduces a common difficulty: the need to manage communication flows across the marketing and R&D boundaries.

Marketing managers tend to focus on shorter time spans than R&D managers, who adopt much longer time frames for projects. Marketers talk about product benefits and market positions, R&D managers talk the quantitative language of performance and specifications.

The extent of integration needed depends on the environment within which product development occurs. In many technology-intensive industries where the customer’s level of sophistication is low, the extent of integration required may be less than that needed where the customer’s level of sophistication is high and the technology intensity of the industry is low.

Adapted from

Trott, P., 2008. Innovation management and new product development. Pearson education.

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