Chapter 2

INTRODUCING NEW
PRODUCTS AND SERVICES
Planning Dimensions
Planning
Determining what you want to accomplish and
developing approaches to achieving your objectives.
Planning Dimensions:
Strategic and Operational Planning
Strategic Planning
The process of developing a mission and long-range
objectives and determining in advance how they
will be accomplished.
Operational Planning
The process of setting short-range objectives and
determining in advance how they will be
accomplished.
Strategy
A plan for pursuing the mission and achieving
objectives.
The Strategic Planning Process
Strategic and Operational Levels
Competitive Advantage
Core Competency
A functional capability (strength) that the firm does
well and one that creates a competitive advantage
for the firm.
Benchmarking
The process of comparing an organizations
products or services and processes with those of
other companies.
Scanning the Environment
Searching the external environment for
opportunities and threats.
The Big Picture
Environment
Corporate Strategy
Competitive Priorities
Functional Strategies
Capabilities
Corporate Strategy
Market analysis
segmentation
needs assessment
Socioeconomic
and business
environment
Corporate strategy
missions
goals
distinctive competencies
Mission Goals
Distinctive
Competences
Competitive Priorities
Market analysis
segmentation
needs assessment
Socioeconomic
and business
environment
Corporate strategy
missions
goals
distinctive competencies
Future directions
global strategy
new products/
services


Competitive priorities
Operations Marketing
cost
quality Finance
time
flexibility Others
Competitive Priorities
Market analysis
segmentation
needs assessment
Socioeconomic
and business
environment
Corporate strategy
missions
goals
distinctive competencies
Future directions
global strategy
new products/
services


Competitive priorities
Operations Marketing
cost
quality Finance
time
flexibility Others

Cost 1. Low cost
Quality 2. High-performance design
3. Consistent quality
Time 4. Fast delivery
5. On-time delivery
6. Development speed
Flexibility 7. Customization
8. Volume flexibility

Functional Area Strategies
Market analysis
segmentation
needs assessment
Socioeconomic
and business
environment
Corporate strategy
missions
goals
distinctive competencies
Future directions
global strategy
new products/
services


Competitive priorities
Operations Marketing
cost
quality Finance
time
flexibility Others
Functional area strategies
finance
operations
others
Capabilities
Market analysis
segmentation
needs assessment
Socioeconomic
and business
environment
Corporate strategy
missions
goals
distinctive competencies
Future directions
global strategy
new products/
services


Competitive priorities
Operations Marketing
cost
quality Finance
time
flexibility Others
Capabilities
current
needed
plans


Functional area strategies
finance
operations
others
Flow Strategy
Flow strategies deal with how the operations of
a firm are structured to develop a product or
provide a service
In the software industry, they are often called
Process Strategies
There are two extreme in flow strategies:
Flexible flow strategy
Line flow strategy

Capabilities

The Role of Flow Strategy
Operations strategy
Process decisions
Quality decisions
Capacity, location, and
layout decisions
Operating decisions
Flow strategy
Flexible flows
Intermediate flows
Line flows
Future
directions
Competitive
priorities

Corporate strategy