You are on page 1of 17

An introduction to New

Product Development (NPD)

New products: Managing
Innovation within firms

New Product DevelopmentManaging Innovation within firms Learning Objectives • Identify the factors organizations have to manage to achieve success in innovation • Explain the dilemma facing all organizations concerning the need for creativity and stability • Recognize the difficulties of managing uncertainty Module Code and Module Title Title of Slides .

Pearson’s Uncertainty Map High 3. Development engineering Uncertainty about output High Low Uncertainty about process Module Code and Module Title Title of Slides . Exploratory research 4. Applications engineering 1. Combining market opportunities 2.

Pearson’s Uncertainty Map • Provides a framework for analyzing and understanding uncertainty and the innovation process • Divides uncertainty into two separate dimensions: – Uncertainty about ends(what it eventual target of the activity or project) – Uncertainty about means(how to achieve this target) Module Code and Module Title Title of Slides .Managing Uncertainty.

University research laboratory Module Code and Module Title Title of Slides .Pearson’s Uncertainty Map Quadrant 1 • High degree of uncertainty and ends • Ultimate target is not clearly defined and how to achieve is not clear • “Exploratory research” • E.g.

g. Commercial opportunity may have been identified but means has not be established • Different technologies or different approaches to try to achieve the desired product • Additional approaches may be uncovered along the way • Considerable uncertainty about précised how company will achieve its target Module Code and Module Title Title of Slides .Pearson’s Uncertainty Map Quadrant 2 • The end or target is clear • E.

Pearson’s Uncertainty Map Quadrant 3 • Uncertainty regarding ends • Attempts to discover how technology can be most effectively used • Application engineering • New materials fall into this area Module Code and Module Title Title of Slides .

g. Nokia with new designs rapidly into market Module Code and Module Title Title of Slides .Pearson’s Uncertainty Map Quadrant 4 • Area of the most certainty • Situation dominated by improving existing products or creating new products through the combination of a market opportunity and technical capability • Speed of development is often the key to success • Minimal new technology with focus on the appearance of the product • E.

Growth Orientation 2. Acceptance of risks Module Code and Module Title Title of Slides . Commitment to technology and R&D intensity 4.Organization characteristics that facilitate the innovation process 1. Vigilance and external links 3.

Cross functional cooperation and coordination within organization structure 6.Organization characteristics that facilitate the innovation process 5. Receptivity Module Code and Module Title Title of Slides .

Organization characteristics that facilitate the innovation process 8.Diverse range of skills Module Code and Module Title Title of Slides . Space for creativity 9. Strategy towards innovation 10.

Organizational structures and innovation 1. Wide range of Specialist Good supply: Complex distribution all over country but not wide range of highly qualified professional groups Module Code and Module Title Title of Slides . Hospital – Doctors.g. Nurses. Formalization – – – Inverse relationship between formalization and innovation Formalization of procedures will result in a decrease in innovative activity But will a decrease in procedure and rules lead to an increase in innovation? 2. e. Complexity of organization – – – Complexities refers to the number of professional groups or diversity of specialists within the organization.

Centralization – – – Refers to the decision making activity and location of power Fewer levels of hierarchy are required Lead to more responsive decision closer to the action 4. Employees and scale of operation 20 employees differs significantly in terms of resources from and organization of 200 or 2000 employees Module Code and Module Title Title of Slides .g. Organization size – – Economic and organization resources e.Organizational structures and innovation 3.

Establishing an innovative environment and propagating this virtuous circle Attraction of creative people The organization’s reputation for innovation Organizational encouragement of creativity and innovation High morale and retention of creative people Development of innovative products Motivates people within the organization and reduces frustration Module Code and Module Title Title of Slides A willingness within the organization to accept new ideas .

Creative organization attract creative people Top scientist will seek employment with those companies which have a reputation or innovation and scientific excellence Organization encourages creativity – – – Creativity has to be supported with actions and resources rather than just lip services Build an environment that tolerates errors and mistakes Successful new ideas need to be rewarded in terms of publicity involved Module Code and Module Title Title of Slides . 2) Success of the programs 3) High level of expenditure on R&D Attraction of creative people – – 3.Establishing an innovative environment and propagating this virtuous circle 1. Reputation takes year to develop Strongly linked to overall performance Factors: 1) recent product launches. Reputation of the organization – – – 2.

Many organization suffer from inability to implement changes and new ideas It is important that it is carried through to completion Increased motivation and reduced frustration – – 7.Establishing an innovative environment and propagating this virtuous circle 4. Individual contribution to the overall performance of the business Good ideas that are constantly overlooked will lead to increased frustration High Moral and retention of creative people – – – All preceding activities will help contribute to increased moral A rewarding and enjoyable working environment will help retain creative people Reinforce the company’s innovative capabilities Module Code and Module Title Title of Slides . Development of innovative products – – 5. Genuine improvements compared with products currently available Success in current market place that leads to further success A willingness to accept new ideas – – 6.

Module Code and Module Title Title of Slides .Tutorial 1. Discuss the main organizational characteristics that facilitate the innovation process? 2. Explain the key individual roles within the innovation process and the activities they perform.