INDUSTRY BREAK POINT

Change concept for marketing as discussed by Strebel as Industry Breakpoints

An industry breakpoint is a new offering to the market that is so superior in terms of customer value & delivered cost that it disrupts the rules of the competitive game E.g. Use of CDs in place of VHS tapes

INDUSTRY BREAK POINT

According to Strebel Industry breakpoint is a result of convergence & divergence.

 For Product Development ,it the New Product Strategy that you need before executing the New Product Development.

WHY DOES A FIRM NEED A NEW PRODUCTS STRATEGY?

To chart the groups/teams direction What technologies?/what markets? To set the groups goals and objectives Why does it exist? To tell the group how it will play the game What are the rules?/constraints? Any other key information to consider?

CORPORATE STRENGTHS
New products in this firm will: Use our fine furniture designers (Herman Miller) Gain value by being bottled in our bottling system (CocaCola) Utilize innovative design (Braun) Be for babies and only babies (Gerber) Be for all sports, not just shoes (Nike) Be for all people in computers (IBM) Proliferate our product lines (Rubbermaid) Be almost impossible to create (Polaroid) Use only internal R&D (Bausch & Lomb) Not threaten P&G (Colgate)

NEW PRODUCT STRATEGY

A common direction set by different stakeholders of the company to assist in any future development. The objective is to focus and integrate team efforts. Strategic planning is the foundation for new Product Development and Product Management

THE PURPOSE OF NEW PRODUCT STRATEGY

Set new product objectives (sale, profit, contribution, market share.) Understand the contribution of new product development within the companys wider goals Define the technologies, markets and product scope

INTEGERATED EFFORTS

DESIRED PRODUCT

FINAL PRODUCT!!!

NEW PRODUCT STRATEGY INPUT

Product Platform Planning

Corporate Leaders

New Product Strategy

Head of Functions

Misc. Source within the Company

PRODUCT PLATFORM PLANNING

Many firms find that it is not efficient to develop a single product. Platform: product families that share similarities in design, development, or production process. Car industry: $3 billion price tag on a new car platform is spread out over several models. Sony: four platforms for Walkman launched 160 product variations. Boeing: passenger, cargo, short- and long-haul planes made from same platform. Black & Decker: uses a single electric motor for dozens of consumer power tools.

PRODUCT INNOVATION CHARTER (PIC)

A document prepared by senior management designed to provide guidance to the business units on the role of innovation. It is the new product teams strategy. It is for Products (not processes). It is for Innovation. It is a Charter (a document specifying the conditions under which a firm will operate).

A TYPICAL PIC MAY CONTAIN

1- Background The background of a PIC includes key points from a PEST analysis (Political, Economic, Social, Technology) or situation analysis. Questions addressed in this section of a PIC may include: What is the business about? Why has this strategy been developed?

2-

Focus The focus of company is defined by the Technology Drivers or/and Market Drivers of the firm. Questions addressed at this stage of a PIC may include:

What are your companys core competencies? What is your companys competitive advantage and the value that your company can bring to the target market?

3-

Goals and Objectives The goals and objectives section describes the companys short term and long term objectives of the new product. The goals and objectives should be measurable.

4-

Guidelines The guidelines component of the PIC is essentially a road map written by the Product Manager for the entire organization. It includes the time and entry to market, costs, product quality and so forth.