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Product Design to Market Leadership

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Product Design to Market Leadership by …

Product Design to Market Leadership by
John Addison, at SVPMA Monthly Event January 2004

Published in: Business, Design

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  • 1. Product Design to Market Leadership John Addison OPTIMARK Copyright OPTIMARK 1 Product Development Challenges Product Development Challenges ! Faster time-to-market ! Incremental innovation ! Project drift ! Requirements changes ! Leading without functional authority ! Engineering / Marketing conflicts ! Access to customers ! Products are increasingly services Copyright OPTIMARK 2Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-1
  • 2. Workshop Objectives ! Differentiate product development of disruptive vs. sustaining technology. ! Identify whether product introduction is disruptive, leapfrog, market leader, or brand extension. ! Identify project planning issues for each of these four stages. ! List appropriate customer and marketing involvement by lifecycle stage. ! Identify ways to compress product development timeframe. ! Portfolio lifecycle strategies. Copyright OPTIMARK 3 Innovation Innovation Disruptive Sustaining ! Wrist-watch video ! Phone with clearer phone signal ! Portable MP3 player ! Portable CD-player for $20 less ! Fuel cell ! Battery last 10% longer ! Voice recognition ! Appliance with award- appliance winning design Copyright OPTIMARK 4Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-2
  • 3. Slides courtesy of Dr. Geoff Moore and the Chasm Group Copyright OPTIMARK 5 Disruptive technology’s Disruptive technology’s difficult customer transition difficult customer transition Visionaries Pragmatists ! “Let’s change the ! “Don’t rock the boat” world” ! Want proven ! Want to be first solutions ! Spend big ! Manage budget ! Like major change ! Like status quo ! Stir things up ! Make it work ! Think pragmatists are ! Think visionaries are roadblocks dangerous Copyright OPTIMARK 6Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-3
  • 4. Slides courtesy of Dr. Geoff Moore and the Chasm Group Copyright OPTIMARK 7 Product Development Product Development 3. Market Dominance 4. Brand Extension 1. Disruptive 2. Leapfrog Copyright OPTIMARK 8Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-4
  • 5. Wireless Examples ! Disruptive… RF-ID ! Leapfrog… location-based positioning ! Market dominance… Verizon ! Brand extension... Nokia Copyright OPTIMARK 9 Portfolio Management Symantec Security Products ! Disruptive… Biometrics ! Leapfrog… HIPAA Security Manager ! Market leadership… Security appliance ! Brand extension... Norton Suites Copyright OPTIMARK 10Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-5
  • 6. Product Goals Product Goals Lifecycle Stage Appropriate Goals ! Disruptive Innovation ! Functional product, first to market ! Leapfrog ! Successful customer deployments ! Market Dominance ! Market share, quality, revenue ! Brand Extension ! Profitability Copyright OPTIMARK 11 Project Managers Project Managers Balance Priorities Balance Priorities Cost Schedule Customer Requirements Copyright OPTIMARK 12Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-6
  • 7. Role of Customer in Product Role of Customer in Product Development Development ! Market research ! OEM design specifications ! Requirements review ! Preliminary design review ! Prototype feedback ! Beta testing ! Final design review ! Product launch Copyright OPTIMARK 13 Project Goals and Scope Project Goals and Scope depend on Lifecycle depend on Lifecycle “Too often we see small companies that believe they can do business with no procedures and large companies that develop a ‘one size fits all’ development process that overburdens small projects with bureaucracy.” Preston Smith & Donald Reinertsen Developing Products in Half the Time Copyright OPTIMARK 14Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-7
  • 8. Product Design Product Design to Market Dominance to Market Dominance Fuzzy Front End Development Market Dominance Customer needs Project Lifecycle strategy Appropriate Management Product requirements Cross-functional management Best markets team Integrated Goal strategic fit Customer marketing Early team involvement Sales and channel partners Copyright OPTIMARK 16 Pull approach for First-to-Market Pull approach for First-to-Market Jan Feb Mar Apr May Jun Jul Aug Requirements Customer involvement accelerates development Prototype Design review Document and test Final code 1.0 Project duration reduction ESD Copyright OPTIMARK 17Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-8
  • 9. Product Phases Product Phases Multiple concepts Funded business plan Prototype Manufacturing Launch of product Integrated marketing Sales Competitive battle Customer & management feedback Revised and new products Copyright OPTIMARK 18 Market research and customer Market research and customer involvement during the Lifecycle involvement during the Lifecycle Customer Research Prototype Disruptive Visionary Feedback Segment 100% needs of Leapfrog Leader leader Market Infrastructure Quantitative Leader Buyer Brand Segment CRM/PRM Extension Users BI Copyright OPTIMARK 19Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-9
  • 10. Disruptive Innovation Disruptive Innovation ! Key customer = visionary with unserved need ! Key team members – R&D – Engineering – CEO protected skunk works ! Incremental design strategy ! Flexible architecture and changing requirements ! Schedule met by moving some requirements to professional services ! Large corporation Innovators Dilemma ! Sales channel = direct sales and tech specialists Copyright OPTIMARK 20 Market Leadership Lead Market Segment Similar Customers 1 2 3Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-10
  • 11. Leapfrog v2.0 (sustaining) Leapfrog v2.0 (sustaining) ! Key customer = segment leader’s economic buyer ! Key team members – Engineering – Customer support – Documentation – Industry marketing ! Attack design drift by focusing on one segment ! Key external group = total solution creators for market segment ! Sales channel = direct sales and solution integrators ! Making product announcement channel ready for value partners Copyright OPTIMARK 22 Customer Communities Customer Communities to Market Dominance to Market Dominance Phonics Reading Math Music Early Elementary 1 2 4 7 Pre-school & Toddler 3 5 8 Higher Elementary 6 9 Middle School 10 Copyright OPTIMARK 23Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-11
  • 12. Sales Coverage Progression Sales Coverage Progression 1. Direct Sales 2. Strategic Alliances 3. Government Integrator 4. Specialty SI & VAR for 100% solution 5. OEM 6. $10 million partner revenue 7. Global 2-tier distribution Copyright OPTIMARK 24 Market Leader v3.0 Market Leader v3.0 (sustaining) (sustaining) ! Key customer = early majority infrastructure buyers ! Key team members – Quality – Manufacturing / Operations – Support ! Change Control Board includes Finance & Marketing ! Attack design drift by simplifying, prioritizing requirements and moving senior engineers ! Customer migration and upgrade plans ! Customer support “product” development ! Product line compatibility and backward compatibility Copyright OPTIMARK 25Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-12
  • 13. Suppliers Disrupters Platform & Allies Leaders Distributors & eMarkets Direct Channel Partners Sales Customer Creative Cost Early Government Adopters Majority Customers Copyright OPTIMARK 27 Brand Extension v4.0 Brand Extension v4.0 (sustaining) (sustaining) ! Key customer = broad market of niche users ! Key team members – Marketing – Support ! Key external = market segment leaders ! Sales channel = segment co-marketing with value and volume ! Making product announcement channel ready ! Project management challenge is virtual teams that include alliance partners Copyright OPTIMARK 28Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-13
  • 14. 6. Money 1. Portfolio 5. Marketing 2. Planning 4. Mindshare 3. Program Copyright OPTIMARK 29 Continuously Improved Services Continuously Improved Services and Branding Events and Branding Events 3. Market Leader 4. Brand Extension 1. Disruptive 2. Leapfrog Copyright OPTIMARK 30Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-14
  • 15. Funding and Requirements Funding and Requirements decisions change with Lifecycle decisions change with Lifecycle Customer Research Specs Funding Prototype Strategic Disruptive Visionary Engineering Feedback Fit Segment 100% needs 100% needs Segment Leapfrog Leader of leader of leader Share Market Infrastructure Market Share & Quantitative Leader Buyer Priorities schedule Brand Segment CRM/PRM Segment ROI Extension Users BI Priorities Copyright OPTIMARK 31 SVPMA Workshop Saturday 8:30 to Noon Copyright OPTIMARK 32Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-15
  • 16. Future Workshops with John Addison Future Workshops with John Addison ! Revenue Rocket: Increase product success with partners – January 17 – Sunnyvale SVPMA ! Channel Marketing and Distribution Strategy – February 2 and 3 – Sunnyvale UCSC-Extension ! Product Design to Market Leadership – May 6 and 7 – Sunnyvale UCSC-Extension www.optimarkworks.com/workshops Copyright OPTIMARK 33 Product Design to Market Leadership John Addison OPTIMARK Copyright OPTIMARK 34Copyright OPTIMARK 2002-2004. All rights reserved. SVPMA-16