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ProductPlanning
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.1
Disclaimer:• All images such as logos, photos, etc. used in this presentation are the property of their respective copyright owners and are used here for educational purposes only• Some material adapted from: Ulrich & Eppinger, “Product Design and Development,” 4th edition
Product Planning: Symbian Cell Phone Platform
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.2
Source: http://mobilecallerid.blogspot.com/2009/03/symbian-platform-release-plan.html
Term Description
Product Plan Identify product portfolio & development schedule
Platform Plan Example of product plan: Build upon common platform
Symbian Cell phone operating system (OS) (compete with Apple & RIM)
Nokia E71xThin SmartphoneRuns Symbian OSBased on Symbian^2
2010 & 2011 versions of productbuild off 2009 Symbian Platform- Typical platform strategy- Great for dynamic markets- New version every 6 months
Product Planning
What products should we develop?
When should we release products?
What mix of products should we make?
What market segments should we target?
What new technologies go into the product?
What are our manufacturing goals?
What are our financial targets?
What budget and schedule should we target?
ProductPlan
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.3
Portfolio Plan: Xerox Example (from Eppinger)
Xerox Document Centre 265 Case Study: www.memagazine.org/backissues/membersonly/october97/features/core/core.html
New Platforms
Derivatives
Improvements
Totally New
1996 2000199919981997
Astro
3933926010595
L-Net
H-Net
Lakes
Hodaka
Portfolio Plan/ Scheduleaka Product Roadmap
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.4
Types of Product Development Projects
Project Type Description
New Platforms Create new family of products based on new platformPlatform shared by all products in familyLeverage development cost across multiple productsExample: Xerox Lakes project
Derivatives Extend existing product platformTailor product to address certain market segmentsSimilar to a brand extensionExample: Network-ready Hodaka (H-Net)
Improvements Incremental improvements to keep product currentExample: Minor change to address complaints
Totally New Completely redesigned productNew technology and/or new production techniquesPossibly to address new marketExample: First digital copier
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.5
Product Planning Process: 5 Steps
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.6
IdentifyOpportunities
Evaluate andPrioritizeProjects
AllocateResourcesand ScheduleTiming
CompletePre-ProjectPlanning
ProductDevelopmentProcess
Portfolioof Projects
MissionStatements
ProductPlan
PotentialProjects
1 5432
Step 1: Identify Opportunities
Sources for Ideas Description
Super-Users Periodically interview visionary usersKey: Does product give them a competitive advantage?
Bug List Record enhancement requestsKey: Establish priority system
Sales Force Gather feedback from salesforceKey: Focus on changes benefiting multiple customers
Competitors Benchmark competitive offeringsKey: What features are common? Which are unique?
Trends Conduct PEST analysis to discover trendsKey: Political, Economic, Social, Technological
Technological Evaluate new technologies for use in productKey: Does technology give a competitive advantage?
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.7
Identify Ideas for New Product
Step 2: Evaluate & Prioritize Projects: 1 of 6
Topic Description
Technology Conduct R&D to bring new technologies to marketExample: 3M, with many tech breakthroughs
Cost Focus on low-cost manufacturingExample: PNY, maker of generic memory devices
Customer Focus Emphasize unique customer needsExample: Dell, configuring PC to individual needs
Imitative Quickly launch products that imitate market leadersExample: Malt-O-Meal: Puffed Rice, Puffed Wheat
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.8
Competitive Strategy: Approach to Market
3M Post It PNY Flash DriveMalt-O-MealPuffed Wheat
Dell PC
Step 2: Evaluate & Prioritize Projects: 2 of 2
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.9
Market Segmentation: Product Segment Map
2000199919981997
Personal
Department
Workgroup
Market Segments
Lakes Project
L1 L2 L3 L4
Lakes Extensions
L5 L6 L7
C(D) 1
Hodaka Project
H1 H2 H3
C(P) 1
H4 H5
C(W) 1 C(W) 2 C(W) 3
Potential Competitor
Existing Competitor
Xerox Product
Step 2: Evaluate & Prioritize Projects: 3 of 6
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.10
Technological Trajectory: When to Adopt Technology?
ProductPerformance
TimeToday
Analog Light LensTechnology
Digital ImagingTechnology
CCD Chip in Camera
Step 2: Evaluate & Prioritize Projects: 4 of 6
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.11
Product Platform Planning: Fosters Derivative Products
DerivativeProductDevelopment
Time
R&D
Platform ProductDevelopment
Platform A Platform B
Project
Release
Criterion Description
Market Size Units/ year x Average price
Market Growth Percent growth per year
Competition Intensity: Number of competitors and strength
Expertise Depth of knowledge of market
Technology Depth of knowledge of technology
Product Fit Alignment with other products
Technology Fit Alignment with core technologies
IP Development Potential for patents or other barriers to competition
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.12
Evaluating Fundamentally New Product Opportunities
Step 2: Evaluate & Prioritize Projects: 5 of 6
Market size & growthare key factors
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.13
Balancing the Portfolio: Product-Process Change Matrix
Step 2: Evaluate & Prioritize Projects: 6 of 6
New CoreProcess
No ProcessChange
IncrementalChange
SingleDepartment
NextGeneration
New CoreProcess
MinorEnhancement
Product FamilyAddition
Next GenerationProduct
New CoreProduct
ProcessProduct
BreakthroughDevelopmentProjects
PlatformDevelopmentProjects
DerivativeProductDevelopment
CurrentProductSupport
Size = Cost of Development
Diversification Goal: Mix of DifferentTypes of Projects
Topic Description
Resources Too many projects, competing for too few resources
Problems Low resources low productivity, late to market
Aggregate Planning Allocate resources considering entire portfolioLimit projects to those achievable within resource limitAvoid exceeding 100% of critical personnel resourcesEliminate low priority projects
Microsoft Project Use scheduling tool to calculate total resourcesCan not exceed 100% utilization rate
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.14
Resource Allocation
Step 3: Allocate Resources and Plan Timing: 1 of 2
Microsoft Projectcalculates totalresources requiredacross multiple projects
Factor Description
Product Introductions Sequence projects to avoid being late to marketTrade-off: Do not compromise quality to make schedule
Tech. Readiness Ensure underlying technology is ready before launchTrade-off: Non-robust tech. can cause support issues
Market Readiness Consider timing of launch vs. product life cycle (PLC) Early in PLC: Can often charge higher prices Late in PLC: Many competitors, charge market rateTrade-off: Frequency of new releases Too slow: Product can lag behind competitors Too fast: Risk frustrating customers
Competition New products can trigger competitive reactions
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.15
Factors to consider for sequencing projects (Pipeline)
Step 3: Allocate Resources and Plan Timing: 2 of 2
Product Life Cycle- Familiar S-Curve
Element Description
Brief Description Identifies basic function of productExample: Networkable, digital multi-function machine
Benefit Proposition States value proposition of product for customerExample: Multiple document functions in one machine
Key Business Goals Objectives for time, cost, quality, profit, otherExample: Serve as platform for future offerings
Target Market(s) Identify primary and secondary markets for productExample: Office departments, Quick-print market
Assumptions State assumptions and constraints for projectExample: New platform, Digital imaging
Stakeholders List everyone affected by product’s success/ failureExample: Users, Manufacturing, Service, Retailers
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.16
Create Mission Statement to Summarize Project
Step 4: Complete Pre-Project Planning
Element Description
Opportunities Are staff members excited about the opportunities?
Competitive Strategy Does product make company more competitive?
Resources Are sufficient resources available?
Mission Statement Is core team excited with the mission statement?
Assumptions Are stated assumptions realistic?
Constraints Is development team over-constrained?
Improvements How could the process be improved?
New Product Development © Stephan Sorger 2010: www.stephansorger.com; Product Planning 3.17
Assess quality of the process and its results
Step 5: Evaluate Product Development Process
This stage representsthe “hand-off” from the product core team to thedevelopment team, so do a“sanity check” before proceeding