New Product Development

Background:

Published by "Academy of Management", Melissa A. Schilling and Charles W. L. Hill

have co-authored the article is "Managing the New Product Development process:

Strategic Imperatives". This article has been extracted from "The Academy of

Management Executive (1993-2005), Vol. 12, No. 3 (Aug., 1998), pp. 67-81".

"Managing the new product development process: Strategic imperatives" explores into

the new product development (NPD) process and the strategies involved with it.

Unprecedented importance goes into the study and implementation of the NPD process

by various departments of businesses, and it has become a key driver of competition

between firms in majority of industries. Researchers have tried to conclude on strategies

that could be key to enhance the NPD process. Two major factors have been found to go

into consideration for the creation of those strategies: maximizing the fit of

products/services with customer needs, and, minimizing the lead-time to the market.

Although it may appear that these two factors might create conflicting mandates in a

business; researchers have increasingly found indications that businesses may employ

certain types of strategic processes to optimize their NPD process.

Purpose of the article:

The purpose of this article is to assess the previous research on managing NPD process

and come out with various strategic imperatives to improve the management of new

product development. The main objective of the article it to guide managers in

identifying opportunities for improving their NPD process and also provide a perceptual

map for scholars to identify fruitful areas for research.

Arguments presented in the article:

Some researchers have argued that rapid product innovations have adverse effect on

consumers. Consumers may not take innovations positively when too many products are

pushed into the market. They doubt new products and are reluctant to purchase them for

fear of obsolescence. Other researchers believe that the rapidly introduced new products

are not qualitative. Quality is compromised for speeding the development process.

However, it is evident from numerous studies that the speed and the commercial success

of new products are positively related. The main focus of the firm then must be in

minimizing cycle time by making NPD process more efficient as well as maintaining the

product quality.

Issues:

New product development in order to attain success requires contemplation in four

strategic issues. The first issue deals with technology strategy. The main purpose of this

strategy is to identify, develop and nurture technologies which would be beneficial in

maintaining competitive position of the company and creating value for the customers.

The second issue relates to organizational context in which the NPD process is rooted.

The third issue identifies with the structure and use of teams to increase the likelihood of

project success.