Untitled Quiz

Product Development Definition

• Product development is the process of taking a product from a market opportunity to a product launch.

Product Development Success Criteria

• Profit is the primary measurement of success for for-profit organizations.
• Product quality is defined as the ability of the product to perform its expected functions, and includes aspects like finish, reliability, durability, serviceability, and style.
• Product Cost is the cost of creating each additional unit
• Development cost measures the efficiency of the development process. It includes labor and prototype costs.
• Development time measures how quickly the product team delivers a product, which reflects responsiveness to market demands.
• Development capability refers to the new skills learned to develop future products, which can lead to new competitive advantages.

Key Functions in Product Development

• Marketing: Identify market opportunities, define market segments, identify customer needs.
• Engineering/Dev: Define physical form, do technical design, do industrial design.
• Manufacturing: Design production system, make products, purchase parts.
• Other Functions: Sales, finance, legal.

Duration & Cost in Product Development

• Product development duration and cost vary greatly depending on the complexity of the product.
• Screwdriver: Annual volume of 100K/year, sales price of 6,productlifecycleof40years,3parts,3peopleontheteam,1yeardevelopmenttime,6, product lifecycle of 40 years, 3 parts, 3 people on the team, 1 year development time, 6,productlifecycleof40years,3parts,3peopleontheteam,1yeardevelopmenttime,150K development cost, $150K production investment.
• Printer: Annual volume of 4M/year, sales price of 130,productlifecycleof2years,200parts,100peopleontheteam,1.5yearsdevelopmenttime,130, product lifecycle of 2 years, 200 parts, 100 people on the team, 1.5 years development time, 130,productlifecycleof2years,200parts,100peopleontheteam,1.5yearsdevelopmenttime,50M development cost, $25M production investment.
• Airplane: Annual volume of 50/year, sales price of 200M,productlifecycleof30years,130Kparts,6,800peopleontheteam,4.5yearsdevelopmenttime,200M, product lifecycle of 30 years, 130K parts, 6,800 people on the team, 4.5 years development time, 200M,productlifecycleof30years,130Kparts,6,800peopleontheteam,4.5yearsdevelopmenttime,3B development cost,$3B production investment.

Challenges in Product Development

• Trade-offs: Developing new products requires making trade-offs, such as cost vs. weight, cost vs. performance.
• Market Dynamics: New technologies, competitor products, and changing customer preferences create dynamic market conditions that can challenge product development.
• Details: Successfully developing a new product requires resolving thousands of details. Examples include providing tool-less access to replace batteries, or deciding if adding a feature is worth the extra development time.