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Organizational structures and processes do managers use to oversee
new-product development
Customer-driven engineering to develop new products, incorporating
customer preferences in final design
Internal Changes to develop more
successful products.
Acceptance Criteria :
• The product to be installed within 5
years.
• The product should have a market
potential of at lea...
• The product can provide at least 30
percent return on sales and 50 percent
on investment.
• The product can achieve tech...
Idea Screening :
No. of ideas = 64
Pass ratio = 1:4
Cost per Product
Idea(in $)= 1,000
Total Cost(in $)
= 64,000
Concept Testing :
No. of ideas = 16
Pass ratio = 1:2
Cost per Product
Idea(in $)= 20,000
Total Cost(in $) =
320,000
No. of ideas = 8
Pass ratio = 1:2
Cost per Product
Idea(in $)= 200,000
Total Cost(in $) =
1,600,000
Test marketing :
No. of ideas = 4
Pass ratio = 1:2
Cost per Product
Idea(in $)=
500,000
Total Cost(in $) =
2,000,000
National launch :
No. of ideas = 2
Pass ratio = 1:2
Cost per Product
Idea(in $)= 500,000
Total Cost(in $) =
10,000,000
• Thus, one successful idea cost the company $5,721,000 to
develop while 63 others fail by the wayside for a total
develop...
Organizing New-Product Development
Cross Functional Team :
These groups are charged with
developing a specific product or
business.
These ‘intrapreneurs’ are...
Skunkworks are informal workplaces
where intrapreneurial teams attempt
to develop new product ideas.
Cross functional can
collaborate and use
concurrent new-product
development to push new
products to the market.
Concurrent...
Stage-Gate Systems
Recap :
• Organizational Arrangements –
1. Customer-driven engineering
2. Internal Changes
• Acceptance Criteria for a new...
Credits :
www.rabehardware.com
www.operationsinc.com
www.poetryoflife.com
www.gaebler.com
www.pkworldsfree4u.blogspot.com
...
What organizational structures and processes do managers use to oversee new product development.pptx
What organizational structures and processes do managers use to oversee new product development.pptx
What organizational structures and processes do managers use to oversee new product development.pptx
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What organizational structures and processes do managers use to oversee new product development.pptx

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What organizational structures and processes do managers use to oversee new product development.pptx

  1. 1. Organizational structures and processes do managers use to oversee new-product development
  2. 2. Customer-driven engineering to develop new products, incorporating customer preferences in final design
  3. 3. Internal Changes to develop more successful products.
  4. 4. Acceptance Criteria : • The product to be installed within 5 years. • The product should have a market potential of at least $50 million & 15% growth rate. ..continued
  5. 5. • The product can provide at least 30 percent return on sales and 50 percent on investment. • The product can achieve technical or market leadership.
  6. 6. Idea Screening : No. of ideas = 64 Pass ratio = 1:4 Cost per Product Idea(in $)= 1,000 Total Cost(in $) = 64,000
  7. 7. Concept Testing : No. of ideas = 16 Pass ratio = 1:2 Cost per Product Idea(in $)= 20,000 Total Cost(in $) = 320,000
  8. 8. No. of ideas = 8 Pass ratio = 1:2 Cost per Product Idea(in $)= 200,000 Total Cost(in $) = 1,600,000
  9. 9. Test marketing : No. of ideas = 4 Pass ratio = 1:2 Cost per Product Idea(in $)= 500,000 Total Cost(in $) = 2,000,000
  10. 10. National launch : No. of ideas = 2 Pass ratio = 1:2 Cost per Product Idea(in $)= 500,000 Total Cost(in $) = 10,000,000
  11. 11. • Thus, one successful idea cost the company $5,721,000 to develop while 63 others fail by the wayside for a total development cost of $13,984,000. • Unless the company can improve its pass ratios and reduce costs at each stage, it will need to budget nearly $14 million for each successful new idea it hopes to find.
  12. 12. Organizing New-Product Development
  13. 13. Cross Functional Team : These groups are charged with developing a specific product or business. These ‘intrapreneurs’ are relieved to other duties and given a budget, time- frame and ‘skunkworks’ settings.
  14. 14. Skunkworks are informal workplaces where intrapreneurial teams attempt to develop new product ideas.
  15. 15. Cross functional can collaborate and use concurrent new-product development to push new products to the market. Concurrent Product development resembles a football match, with team members passing the new product back and forth as they head towards the goal.
  16. 16. Stage-Gate Systems
  17. 17. Recap : • Organizational Arrangements – 1. Customer-driven engineering 2. Internal Changes • Acceptance Criteria for a new product • Budgeting for a New-Product Development • Organizing New-Product Development. • Cross-functional teams • Skunkworks • Stage-Gate Systems
  18. 18. Credits : www.rabehardware.com www.operationsinc.com www.poetryoflife.com www.gaebler.com www.pkworldsfree4u.blogspot.com www.touchstoneresearch.com www.zensoft.org www.relevantinsights.com www.startupcentral.com www.astrautix.com en.Wikipedia.org www.socialmediatoday.com www.crossfitcda.com m.todayonline.com acreativebunch.com www.tutorialspoint.com

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