Outline:Product planningThe Product Planning ProcessFour types of Product Development ProcessThe Process Step 1: Identify Opportunities Step 2: Evaluate and prioritize projects Four basic perspectives Balancing portfolio Step 3: Allocate Resources and Plan Timing Resource allocation Project timing The Product Plan Step 4: Complete Pre-Project Planning Mission Statement Assumption and Constrains Staffing and Other Pre-Project Planning Activities Step 5: Reflect on the Results and the process
The Product Planning ProcessProduct plan identifies the portfolioof products to be developed by theorganization and the timing of theirintroduction to the market.
Organizations that do not carefullyplan the portfolio of development projects to pursue are often plagued with inefficiencies such as: Inadequate coverage of target markets with competitive products. Poor distribution of Poor timing of market resources, with some projects introductions of products. overstaffed and others Mismatch between aggregate understaffed. development capacity and the Initiation and subsequent number of projects pursued. cancellation of ill-conceived projects. Frequent changes in the directions of projects.
Four Types of productDevelopment ProjectsNew product platformsDerivatives of existing productplatformsIncremental improvements to theexisting productsFundamentally new products
Four Types of productDevelopment Projects Derivatives of Incremental Fundamentally New product improvements to existing product new products platforms existing products platforms These type of may only involves adding or This projects extend anradically adifferent These projects project involve major existing product projects involve modifying some featurescreate a newproducts of platform or production of existing familymay to effort to technologies and in developmentbetter address familiar markets with product order to based on a new, common platforms and products keep new and unfamiliar markets. one or more newthe product line current help to address products. competitive.
The ProcessThese planning activities focus on a portfolioof opportunities and potential projects andare sometimes referred to as portfoliomanagement, aggregate productplanning, product line planning, or productmanagement.
To develop a product plan andproject mission statements, we suggest a five-step process: Identify opportunities Evaluate and prioritize projects Allocate resources and plan timing Complete pre-project planning Reflect on the results and the process
Competitive StrategyAn organization’s competitivestrategy defines a basicapproach to markets andproducts with respect tocompetitors. The choice ofwhich opportunities to pursuecan be guided by this strategy.
Competitive Strategy Several strategies: Imitative Cost leadershipTechnology leadership Customer focus The implement requires the firm firmand existing To firm works closely with new competegreat This strategy this strategy, the to places on Involves closely research and development of new emphasis tobasic following trends needs the in of customers onefficiency, either through economiesand production assess their changing market, allowing competitors to explore which new preferences. superior manufacturing methods, low- technologies. scale, use of products are successful for each segment. of the cost labor, or better management production system.
Market SegmentationCustomer can be usefullythought of as to distinctmarket segments.
Technological TrajectoriesIn technology-intensivebusinesses, a key productplanning decision is when toadopt a new basictechnology in a productline.Technology S-curves areconceptual tool to helpthink about such decisions
Product Platform Planning The product platform is the set of assets shared across a set of products. Technology Roadmap is a way to represent the expected availability and future use of various technologies relevant to the product being considered.
Platform Development ProjectResearch and TechnologyDevelopment Legend Platform Product Platform A Platform B ProjectDevelopment Product Release Derivative ProductDevelopment time
Functional Elements Technologies Photo- receptor Scanner Layout Toner Type Output Modes User Interface Image Processing Diagnostic Document Document Centre Document Document Centre Centre Centre 240, 255Technolog 220, 203 265 2XX 3XXy Roadmap Hodaka Lakes Lakes Next Project Project Extensions Platform time
Evaluating Fundamental New Product OpportunitiesIn addition to newversions of products inexisting productcategories, the firmfaces manyopportunities in eithernew markets orfundamentally newtechnologies.
Some criteria for evaluatingfundamentally new product opportunities includes: Fit with the firm’s other Market size. products. Market growth rate. Fit with the firm’s Competitive intensity. capabilities. Depth of the firm’s Potential for patents, trade existing knowledge of the secrets, or other barriers to market. competition. Depth of the firm’s Existence of a product knowledge of technology. champion within the firm.
Balancing the PortfolioThere are many methods to helpmanager manage anorganization’s portfolio ofdevelopment projects.Product-process change matrixplots the portfolio of projectsalong two specific dimension:the extent to which the projectinvolves a change in the productline and the extent to which theproject involves change inproduction processes.
Resource AllocationMany organizations take on too manyprojects without regards for thelimited availability of developmentresources.Aggregate Planning helps anorganization make efficient use of itsresources by pursuing only thoseprojects that can reasonably becompleted with the budgetedresources.
Project TimingTiming of product introductions The sooner a product is brought to market the better.Technology readiness Robust technology can be integrated into products much more quickly and reliably.Market readiness Determines whether early adopters buy the low-end or high-end products.Competition anticipated release of competing products may accelerate the timing of development products.
The Product PlanThe plan may include a mix offundamentally new products, platformprojects, and derivative projects ofvarying size.
Step 4: Complete Pre-Product PlanningCore team Activity involves a small, cross-functional team of people
Mission StatementsBrief description of the productBenefit propositionKey business goalsTarget market for the productAssumption and constraints thatguide the development effort.Stakeholders
Mission Statements 1). Brief description of the product Identifies the basic function of the product but avoids implying a specific product concept.
Mission Statements2). Benefit proposition Articulates the critical few reasons a customer would buy the product3). Key business goals Goals for time, cost and quality4). Target market for the product Identifies the primary market as well as any secondary markets that should be considered in the development effort.
Mission Statements 5). Assumption and constraints that guide the development effort. They help to maintain a manageable project scope 6). Stakeholders All of the groups of people who are affected by the product’s success or failure.
Assumptionsand Constraints Manufacturing Service Environment
Staffing and Other Pre- Project Planning Activities Involve getting key members of the development staff to “sign-up” for a new project . Budgets are also generally established during pre- project planning.
Several questions to assess thequality of both the process and the results:Is the opportunity funnel collecting an exciting anddiverse set or product opportunities?Does the product plan support the competitive strategyof the firm?Are the total resources allocated to product developmentsufficient to pursue the firm’s competitive strategy?Have creative ways of leveraging finite resources beenconsidered, such as the use or product platforms, jointventures and partnerships with suppliers?
Several questions to assess thequality of both the process and the results:Does the core team accept the challenges of theresulting mission statement?Are the assumptions listed in the mission statementconsistent?Are the assumptions listed in the mission statementreally necessary or is it the project over constrained?How can the product planning process be improved?