New Product Introduction and Development Strategy:

Published: 2021-09-05 07:15:19
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Category: Marketing, Strategy, Technology

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New Product Introduction is a key element in growing industries. Research and Development helps bring new innovative ideas into reality. Multinational companies leverage assistance from research institutions both academic and otherwise to implement hypotheses. The basis for all new product developments is the establishment of product development strategy. Now this strategy needs to get converted to product innovation performance utilizing knowledge as a technical bridge. Junfeng Zhang and peers have focused on discussing the relationships between product development strategy and product innovation using knowledge utilization as a bridge (Junfeng, Z., C. Anthony Di, B., & Scott, H. (2009)). According to them increased resource allocation helps achieve better product innovation and better utilization of knowledge to attain desired deliverables.
My discussion in the following section is based on the review of the paper “Product Development Strategy, Product Innovation Performance, and the Mediating Role of Knowledge Utilization: Evidence from Subsidiaries in China”. Product development involves matching market requirements with industrial capability. New technologies have been developed out market needs that aim at customer satisfaction. The authors note that industries focus a lot on profit margins and building on existing technologies rather than combining knowledge based systems and information with product development strategy. Product Development strategies can be broadly classified into 3 types: breakthrough, platform and incremental focus. Breakthrough is to come with new innovative ideas such as designs, platform is about developing a suitable testing system it could be automated or manual to test the idea and bring it into execution and incremental focus involves step to step organization and management.I would like add few examples from semiconductor industry to explain these 3 classifications. Breakthrough is about designing a new technology or new chip. For eg: there are design models of switches using Ultra CMOS technology, some using GaAs technology so on. These technologies are manufactured in different fabrication industries such as Lapis, Global Foundries. Each design varies from the other both in terms of complexity and functioning. Now platform means using a suitable testing system or methodology to verify whether the product from the breakthrough step is functioning as expected or not. Expanding on the previous example to test switch functioning we need an automated test equipment (ATE). There are several ATEs available such as Falco, Aemulus, Diomond X etc that can be used. The use of a particular platform is decided different parameters and the conditions they would tested in. Increment focus is about making minor adjustments to existing designs. For eg if there is a design for a switch, there can be several versions to the switch which include different fuse burns i.e using paths in transmitter or receiver mode. This is very common in companies that design switches, transceivers. I will discuss growth and development in semiconductor industry later.
The authors assigned different weights to each of the 3 classifications ie:
Product Development Strategy:
This is divided as:
Breakthrough Focus: This involves resource allocation on projects with high level of innovativeness
Platform Focus: This involves resource allocation on projects with medium level of innovativeness
Incremental Focus: This involves resource allocation on projects with low level of innovativeness
There are strategies that incumbent companies use to develop modifications to a particular existing product design (Jiang, L., Tan, J., & Thursby, M. (2011)).
Knowledge Utilization:
Technology Knowledge: This is about skills, product technology etc
Customer Knowledge: This is about marketing, information and know how about customer s and their needs
Competition Knowledge: This is about industry standards, quality and reliability of products etc
Product Innovation Performance:
This is about how new products impact the customer market and shares.
Alan MacCormack mentions in his article on, “Do you need a product development strategy”, about how to first develop a strategy to address a problem at hand and them modify the strategy as the variables change (MacCormack, A., Crandall, W., Henderson, P., & Toft, P. (2012)). This helps solve a problem methodically without following one approach. We can also involve cross functional teams to assist in such problem solving as they bring more inputs depending upon their area of expertise.
The authors mention breakthrough focus has a U shaped relationship with product innovation performance, platform focus is directly proportional to product innovation performance and incremental focus shows no significant relationship. Also performance innovation improves with better knowledge based networks. These networks could be academic institutions, other similar industries etc.
Quality Management in Product Development:
In general the life cycle of a product goes through several stages. Different companies define it differently. An eg is Mittel Semiconductor which uses the following (S. M. Boyer (1991)):

First define customer needs
Product design
Characterization involving bench tests
Developing test methodology
Handling customer reviews and issues post production

The way Mittel Corporation handled their issues is mainly pertaining to manufacturing issues in pre-production side. Firstly they focused on largest problems at hand (S. M. Boyer (1991)) involving long manufacturing time for each product testing. This needed proper documentation and communication to product and test engineering teams. A cross-functional team involving people from different levels of expertize was formed such as design, test, characterization, product, quality etc. In pSemi Corporation, where I worked for 2,5 years, cross functional team meetings are very crucial to gauge the progress of a product in NPI life cycle. The second problem addressed by Mittel was that there were a lot failures because of improper product definition (S. M. Boyer (1991)) in early stages of life cycle of the product. They decided to state proper rules for quality and reliability and also product based testing procedures which everyone could adhere to. With respect to the customers dealing with these products customer based data sheets both initial and advanced were released. All the parameters and conditions in data sheets were tested methodically for any failures. Generally when a new design or an increment focus design is ready, the dies are built into evaluation (EVK) boards. When first few of these boards are received these are tested for initial verification to test the functionality of the part followed by bench testing of initial important parameters of the part. For eg a switch die is tested for its gain, linearity by measuring IIP3, return loss etc. These measurements are done on Vector Network Analyzers in the lab or sometimes depending on the nature of the product we use sophisticated PNA-Xs. Then these initial results are reported to the customer. The next step is performing Design Verification (DV) which involves using 3-4 parts and measuring few crucial parameters. Then we move on characterization where 25-30 parts are subjected to in depth tests including exposure to different temperature conditions. These are bench measurements and hold the key to defining parameter values on the data sheet. Next is Automated Test measurements on ATE systems like Falco, Aemulus depending on the frequency of operation. Data collected from ATE tests goes through analysis by Product Development Team which involves six sigma method of analysis. This is the third step taken by Mittel (S. M. Boyer (1991)). We set new limits to the tests and also put the parts through quality and reliability tests. In the end the product is released to the customer. Product engineering team also handles customer returns specific to a product. These efforts from Mittel in Product Development led them to have better clarity with customers and increasing their profit margins as well. This is mainly because of management and technical improvements across all functional teams.
Need for Strategic Alliance in Product Development:
During my survey I came across research done using strategic alliance in NPI pipeline. This comprises of having social interactions with customers (Sompong, K., Igel, B., & Helen, L. S. (2014)) both old and new in the market about their expectations and different methodologies adopted by a particular company to achieve those. It also opens up doors for new customers to invest in a firm. The authors who investigated this aspect of strategic management also identified 3 factors that contribute to better product development coupled with alliance (Sompong, K., Igel, B., & Helen, L. S. (2014)):

Alliance Motivation

A clear understanding of alliance needs helps establish better alliance objectives with customers, other firms, academic institutions etc.

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