Institute of Technology

Department of Biomedical Engineering

BIOMEDICAL DESIGN I--BMEG4241
CHAPTER TWO
“OPPORTUNITY IDENTIFICATION AND PRODUCT PLANNING ”

By Aschalew A
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Outline
Opportunity identification
Opportunity identification process
Product planning
Steps in product planning

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Opportunity identification
What is opportunity?
• An opportunity is an idea for a new product.
• a product description in
oEmbryonic form,
oA newly sensed need,
oA newly discovered technology, or
oA rough match between a need and a possible solution.

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Cont.…
An opportunity for a new product is usually articulated with less
than one page of information, often including
• a descriptive title,
• a narrative explaining the idea, and
• sometimes including a sketch of a possible product concept.

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Types of opportunity
Can be categorized based on
1. The extent to which the team is familiar with the solution likely to
be employed.
2. The extent to which the team is familiar with the need that the
solution addresses.
For technology-based products, these dimensions can also be thought
of as knowledge of the technology and knowledge of the market.

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Uncertainty horizons
Risk of failure increases as opportunities deviate from what the team
already knows well.
We can divide the opportunity landscape into categories based on
the uncertainty “horizon” faced by the team.
• Horizon 1
• Horizon 2 and
• Horizon 3

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Cont.…
Horizon 1:
• Opportunities are largely improvements, extensions, variants, and cost reductions of
existing products for existing markets.
• They are relatively low-risk opportunities.

Horizon 2
• Opportunities push out into less known territory in one or both of the dimensions of
the market or the technology.
Horizon 3
• Opportunities represent attempts to exploit opportunities that in some way are new to
the world, embodying the highest level of uncertainty.

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Figure: Types of opportunities. Horizons 1, 2, and 3 represent increasing levels of risk, reflecting different
types of uncertainty.
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Opportunity tournament
Only one best idea is selected
Use different criteria with at list two or three rounds

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Effective opportunity tournaments
How to increase the number of best/excellent opportunities?
1. Generate a large number of opportunities.(If you produce more
opportunities, you’ll see more exceptional ones)
2. Seek high qualities of the opportunities generated.
3. Create high variance in the qualities of opportunities.

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Opportunity identification process
We divide the opportunity identification process into six steps as
follows:
1. Establish a charter
2. Generate and sense many opportunities.
3. Screen opportunities.
4. Develop promising opportunities.
5. Select exceptional opportunities.
6. Reflect on the result and the process.

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Step 1: Establish charter
Organizations create new products to achieve goals such as:
• Growing revenues from existing customers,
• Filling a hole in a product line, or
• Entering new market segments.

Entrepreneurs starting new organizations also have goals like creating a

new product related to an area of personal interest.
The innovation charter articulates these goals and establishes the
boundary conditions for an innovation effort.

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Cont.…
The innovation charter includes:
• Background
oExplain the purpose of the product development
• Focus
oSet the focus area, problem and the time given for the product development
• Goals/Objectives
oSet the objective and the goal of your product development process
• Guidelines
oSet the basic guidelines for your product development process. Like cost,
time and dependency on customer need and locally available materials

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Cont.…
E.g. “create a physical product in the cat toy category that we can
launch to the market within a bout a year through our existing retail
sale channels.”
E.g. "The objective is to develop a product that is cost effective and
provides a potentially respectable return of investment while solving
a critical medically related issue in Ethiopia as well as other
developing countries. The goal is also to provide a means in which
this physical product can be implemented locally."

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Step 2: Generate and sense many
opportunities
Source of opportunities are internal and external.
Focusing on both equally important

Figure: The distribution of sources of opportunities in innovation.

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Techniques of generating
opportunities
1. Follow a personal passion
• List down your passion
• Then consider How emerging technologies, trends and business
models might affect them,
• Or identify unmet needs that you have in connection with a
personal interest

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Cont.…
2. Compile bug lists
• Dissatisfaction with the world a round you.
"Successful innovators are often chronically dissatisfied with the
world around them. "
• Notice unmet need of customers/you.
• List and document every annoyance or frustration you encounter in
days/ weeks or months.
"Any problem is an opportunity"

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Cont.…
3. Pull opportunities from capabilities
Firms achieve above average profits by exploiting unique
resources.
Unique resources:
• Capabilities
• Core competencies and
• Competitive advantages

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Cont.….
Resource must be:
• Valuable.
oTo be valuable, a resource must either allow a firm to achieve greater
performance than competitors or reduce a weakness relative to competitors.
• Rare.
oGiven competition, a valuable resource must be rare.
• Inimitable.
oFor value and rarity to persist, a resource must not be easily imitated.
• Non-substitutable.
oEven if valuable, rare, and inimitable, a resource providing advantage can’t be
easily substituted.
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Cont.…
4. Studying customers
Opportunities can be identified by studying customers in a selected
market segment.
Provides deeper understanding of customer needs.
Better than survey.

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Cont.…
5. Consider implications of trends
Changes in technology, demography, or social norms often create
innovation opportunities.
List social, environmental, technological or economic trends, and
imagine innovation opportunities made possible by each one.

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Cont.…
6. Imitate but better
Consider alternative solutions that could address the same need.
Consider alternative needs that could be addressed by the same
solution.

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Cont.…
Some source of opportunities of imitation
• Media and marketing activities of other firms
• De-commoditize of commodity
• Drive an innovation ”down market”
• Import geographically isolated innovations.

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 Examples of the imitate-but-better approach: SpinBrush, Starbucks, Altoids
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Cont.…
7. Mine your sources
External source can be a major source for product development.
These source can be:
• Lead user
• Representation in social networks
• Universities and government laboratories
• Online idea submission

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Step 3: Screen opportunities
Eliminate opportunities that are highly unlikely to give good result.
Focus on opportunities worthy of further investigation.
Holistic judgment by a group of individuals
Set of multiple criteria divert results in an unnecessary discussion.
Web-based survey and workshops with multi-voting

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Step 4: Developing promising
opportunities
Maintaining single opportunity is not logical.
Sufficient number of alternative opportunities should be identified.
Those opportunities which passes the first screening deserves
further process such
• As informal discussion with potential customers, and
• Internet search for existing solutions.

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Cont.…
Tasks should be completed in developing promising opportunities
include,
• Customer interviews
• Testing existing products
• Concept generation
• Quick prototypes and
• Estimate of market size and growth rate
The goal is to resolve the greatest uncertainty surrounding
each one at the lowest cost in time and money.
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Step 5: Select exceptional
opportunities
Few exceptional opportunities that warrant a significant investment
in product development should be selected.
There are two methods to select opportunities
1. Real-Win-Worth-it(RWW)
2. Opportunities based on
• The amount of capital required
• Time required to get into the market, or
• The passion and excitement evoked by the opportunity.

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RWW framework
RWW is based on there questions
1. Is there a real market and product
2. Can we win? Is our product or service be competitive? Can we
succeed as a company?
3. Is it worth doing? Is the return adequate and the risk acceptable?

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Step 6: reflect on the result and
process
How many opportunities are identified from internal/external
sources?
Did we consider dozens or hundreds of opportunities?
Was the innovation charter narrowly focused?
Were our filtering criteria biased or largely based on the best
possible estimates of eventual product success?
Are the resulting opportunities exciting to the team?

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Project tasks
Develop innovation charter
• Background, Focus, Goals/objective and Guidelines

Identify minimum of 30 opportunities per group

Select the one opportunity for development using different criteria
for least one Web-based survey and one workshops with multi-voting
Perform RWW frame work for your selected opportunity
Write your reflection on the result and process

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Product planning
The product planning process takes place:
• Before a product development project is formally approved,
• Before substantial resources are applied, and
• Before the larger development team is formed.

Product planning is an activity that

• Considers the portfolio of projects that an organization might pursue and
• Determines what subset of these projects will be pursued over what time
period.

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Cont.…
The product planning activity ensures that product development
projects support the broader business strategy of the company and
addresses these questions:
• What product development projects will be undertaken?
• What mix of fundamentally new products, platforms, and derivative products
should be pursued?
• How do the various projects relate to each other as a portfolio?
• What will be the timing and sequence of the projects?

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Cont.…
The planning process considers product development opportunities
identified by many sources, including
• Suggestions from marketing,
• Research,
• Customers,
• Current product development teams, and
• Benchmarking of competitors.

From among these opportunities on product planning,

• A portfolio of projects is chosen,
• Timing of projects is outlined, and
• Resources are allocated
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Four Types of Product
Development Projects
1. New product platforms:
• This type of project involves a major development effort to create a new family of products
based on a new, common platform.
• The new product family would address familiar markets and product categories.

2. Derivatives of existing product platforms:

• These projects extend an existing product platform to better address familiar markets with one or
more new products.

3. Incremental improvements to existing products:

• These projects may only involve adding or modifying some features of existing products in order to
keep the product line current and competitive.

4. Fundamentally new products:

• These projects involve radically different product or production technologies and may help to
address new and unfamiliar markets.

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Example of a product plan listing products to be developed and indicating the time frame for each.

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Planning process

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Steps in product planning
Step 1: identifying opportunities
Step 2: evaluating and prioritize projects
Step 3: allocate resource and plan timing
Step 4: complete pre project planning
Step 5: reflect on the result and process

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Step 1: Identifying opportunities
The planning process begins with the identification of product
development opportunities.
Such opportunities may involve any of the four types of projects
defined above.

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Step 2: Evaluating and prioritize
projects
The second step in the Product Planning process to select the most
promising projects to pursue.
Four basic perspectives are useful in evaluating and prioritizing
opportunities for new products in existing product categories:
1. Competitive strategy,
2. Market segmentation,
3. Technological trajectories, and
4. Product platforms.

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Cont.…
Competitive strategy
Technology leadership
• Basic research and development of new technologies

Cost leadership
• Economics of scale
• Use of superior manufacturing method

Customer focus
• Access their changing needs and preferences.

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Step3: Allocate resources and plan
timing
• Too many projects with limited resources
• Professional assignment to too many projects
• Projects become late
• Scarcity of resources
• Products become late to the market

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Plan timing
• Timing of product introductions
• Technology readiness
• Market readiness
• Competition
• A set of projects approved by the planning process,
sequenced in time becomes a project plan.

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Step 4: Complete pre-project timing
 Involves a small, cross-functional team of peoples.
Opportunity statements are re-written as a product
mission statement.

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Mission Statements
The mission statement may include some or all of the following
information:
1. Brief (one-sentence) description of the product:
• This description identifies the basic function of the product

2. Benefit proposition:
• Articulates the critical few reasons a customer would buy the product.

3. Key business goals:

• Include goals for time, cost, and quality (e.g., timing of the product introduction,
desired financial performance, market share targets).

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Cont.…
4. Target market(s) for the product:
• Identifies the primary market as well as any secondary markets that should be
considered in the development effort.

5. Assumptions and constraints that guide the development effort:

• Assumptions must be made carefully since 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.
• The stakeholder list begins with the end user (the ultimate external customer)
and the external customer who makes the buying decision about the product.
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Step 5: Reflect on the Results and
the Process
In this final step of the planning and strategy process, the team should
ask several questions to assess the quality of both the process and the
results.
Some suggested questions are:
• Is the opportunity funnel collecting an exciting and diverse set of product
opportunities?
• Does the product plan support the competitive strategy of the firm?
• Does the product plan address the most important current opportunities facing the
firm?
• Does the core team accept the challenges of the resulting mission statement?
• Are the elements of the mission statement consistent?
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Project tasks
Develop time plan(Gant chart)
Write your project mission statement
Write your reflection on the result and process

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 “Design is not just what it looks
and feel like design is how it
works” Steve Jobs

“Great design has creativity and strategy” M. Cobon

Thank you
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