- Company’s definition of a new product.
- Portfolio project management technique employed.
- Product development pathway.
- Marketing & Sales processes abilities to gain market share.
Part 1 of this article covered pillar 1- Company’s definition of a new product, while Part 2 covered pillar 2- Portfolio project management techniques employed.
In this part, I shall elaborate on pillar 3- Development pathway.
Broadly, new product development can happen via three development pathways namely-
- Incremental change.
- Copy the competitor.
- Disruptive development.
Incremental change development:
In this case the companies see opportunity to sell items or services that are fundamentally like what they’re already selling, but with small changes. For example- an additional size of a mobile phone, a lower strength of a medicinal product, a new flavor of a chewing gum or new fragrance of a toothpaste or shampoo etc.
Copy the competitor:
In this case a best-selling product’s features of an innovator company are copied by other players. If the innovator’s product is under patent, the copy-cat product must be developed by circumventing the enforced patents around the product. A point to note is that generics can be launched only after marketing exclusivity of the original product has matured.
Generic products offer several advantages to the consumer, for example- a generic product is priced significantly lower than the original product price. Generic products are present in all industry sectors.
For example- Apple’s ipod or replacement of meat in frozen meals with plant-based substitutes or a liquid injection offered as a lyophilized powder for reconstitution (to liquid) before administration or drug-products developed via 505 (b)(2) route etc.
Underlying this trend is the assumption that companies can exponentially increase customer value by introducing products that match customer’s un-met needs.
Incremental change, Me-too and Disruptive development pathways are beneficial both for software as well as physical products, such as- Toys, Cosmetics, Non-medical machinery, Chemicals, Over-the-counter pharmaceuticals, Herbal supplements, Consumer health products, Telecom, Healthcare etc.
A point to note is that the rate of adding new features is based on product types. For example- new feature additions are faster for software products than it is for physical products. For example- Social media apps or computer software are tweaked almost every week, which usually occur as auto updates. Such swift changes are unthinkable for physical products be it a machine, chemical, cosmetic or a drug product.
However, this can be overcome by focusing on minimum-viable-product design practices and constant iterative improvement, rather than spending years developing a 'perfect' product that could be outdated before it can be launched.
So, how can development pathway help transform your business?
The Incremental change, Me-too as well as Disruptive development pathways are comprised of several underlying processes.
These processes are primarily of two types- Technical processes and business processes. And increase in efficiency and effectiveness of both these types of processes will bring about increase in profit, in turn facilitate business transformation and accelerate growth.
There are more than eighteen scientific and time-tested process improvement methodologies. You can know more about them here.
The choice of process improvement methodologies is dependent on multiple factors such as- process type, product type, organizational size etc.
Usually, process improvements of technical processes (regardless of industry sector) can be successfully accomplished with Poka Yoke, DFM, Hoshin, Design Thinking, TRIZ, Agile, DFSS methodologies.
In the next part of this article, I shall discuss the fourth portfolio parameter impacting successful business transformations- Marketing & Sales processes ability to gain market share.
By the way, if you run a company that is facing a challenge to thrive in these difficult times, I would suggest that you please revisit your product portfolio in order to bring a quick turnaround.
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