What organizational structures and processes do managers use to oversee new products and services.pptx

1. Organizational structures and processes do managers use to oversee
new-product development

2. Customer-driven engineering to develop new products, incorporating
customer preferences in final design

3. Internal Changes to develop more
successful products.

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. • The product can provide at least 30
percent return on sales and 50 percent
on investment.
• The product can achieve technical or
market leadership.

7. Idea Screening :
No. of ideas = 64
Pass ratio = 1:4
Cost per Product
Idea(in $)= 1,000
Total Cost(in $)
= 64,000

8. Concept Testing :
No. of ideas = 16
Pass ratio = 1:2
Cost per Product
Idea(in $)= 20,000
Total Cost(in $) =
320,000

9. No. of ideas = 8
Pass ratio = 1:2
Cost per Product
Idea(in $)= 200,000
Total Cost(in $) =
1,600,000

10. Test marketing :
No. of ideas = 4
Pass ratio = 1:2
Cost per Product
Idea(in $)=
500,000
Total Cost(in $) =
2,000,000

11. National launch :
No. of ideas = 2
Pass ratio = 1:2
Cost per Product
Idea(in $)= 500,000
Total Cost(in $) =
10,000,000

12. • 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.

13. Organizing New-Product Development

14. 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.

15. Skunkworks are informal workplaces
where intrapreneurial teams attempt
to develop new product ideas.

16. 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.

17. Stage-Gate Systems

18. 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

20. Credits :
www.rabehardware.com
www.operationsinc.com
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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