New Product Development Process Quiz

Innovation & Entrepreneurship

• Typical New Product Development (NPD) processes have 4 to 7 stages, varying by model.
• Stages include Idea Generation, Idea Screening, Concept Development & Testing, Business Analysis, Product Development, Market Testing, and Commercialization.

Tools for Improving New Product Development

• Stage-Gate Process: A structured approach to new product development using gates (Gate 1, 2, 3, 4, and 5) to review and approve each stage.
• New Product Development Process (Bessant & Tidd): A model with distinct stages: Concept Generation, Project Assessment & Selection, Product Development, and Product Commercialization.

Success Factors in New Product Development

• Product advantage: being superior in the eyes of customers.
• Market knowledge: understanding the market well.
• Clear product definition: clearly defined target markets, product concept, and market position.
• Risk assessment: evaluating the potential risks.
• Project organization: cross-functional, multi-disciplinary teams managing projects.
• Project resources: having adequate resources (financial, personnel).
• Proficiency of execution: smooth execution of the product development plan.
• Top management support: management endorsement and backing.

Tools to Help with NPD

• Involve Customers: Engaging customers throughout the NPD process, including early beta testing. Utilize lead users for testing products.
• Crowdsourcing: Employing a community to contribute ideas and resources for innovation and new product development.
• Platforms: There are platforms for crowdsourcing including InnoCentive, Yet2.com, and TopCoder.

Product Development Tools

• Design for Manufacture (DFM): designing for ease of manufacture.
• Rapid Prototyping: quickly creating prototypes to assess design.
• Computer-aided Techniques (CAD/CAM): using computer software for design and manufacturing processes.
• Quality Function Deployment (QFD): relating customer requirements to engineering attributes.

Lean Startup Methodology

• Minimum Viable Product (MVP): Minimum version of a product with just enough features to gather initial feedback.
• Build-Measure-Learn Cycle: Lean Startup cycle focusing on rapid iterations of product development using feedback for improvement.

Benefits of Lean Startup

• Waste reduction
• Accelerated time-to-market
• Improved adaptability to customer needs
• Encourages innovation
• Useful examples include Dropbox, Airbnb, and Zappos.

Diffusion of Innovation

• Barriers to innovation adoption include economic factors, behavioral issues, organizational dynamics, and structural constraints.
• Factors influencing adoption include Relative Advantage, Compatibility, Complexity, Trialability, and Observability.

New Business Application Growth

• High but with challenges.
• Significant portions of new businesses fail within two or five years, even with some succeeding for 10 or 15 years.

Motives for New Venture Startup

• Lifestyle Entrepreneurs: seeking independence and self-employment.
• Growth Entrepreneurs: driven by wealth and power, often focused on conservative sectors.
• Technology Entrepreneurs: focusing on education, experience, and innovation, often located in specific regions (e.g., Silicon Valley).
• Social Entrepreneurs: motivated to address social problems.

Stages in the New Venture Process

• Opportunity Assessment: evaluating and refining the business concept.
• Developing the Business Model: including venture structure.
• Resources & Funding: identifying and securing necessary resources including expertise and partnerships.
• Launch the Venture: creating value and achieving financial and marketing success.

Fundamental Drivers of Opportunities

• Economic factors (changes in disposable income)
• Technological developments (reducing/increasing barriers to entry)
• Demographic trends (e.g., aging population)
• Regulatory changes (environmental, health, and safety)

Assessing Opportunities: Potential Users

• Number of people affected by the problem.
• Demographics (age, gender, income, profession, location, education level).
• Critical information for pitching the venture concept.

Developing Your Business Model

• A business model provides clear representation of how a company creates value and captures it.

Developing Your Business Model (Choices)

• Freemium Model: Basic services for free, premium features for a fee.
• Subscription Model: Customers pay recurring fees for access to products/services.
• Marketplace Model: Connecting buyers and sellers (Etsy, Airbnb).
• E-commerce: Online sales of products directly to consumers.
• Direct Sales: Selling products/services through personal relationships.

Finding Resources

• Non-Equity Financing: Includes bootstrapping, debt (personal & bank loans), grants, and accelerators/competitions/crowd funding.
• Equity Financing: Includes angel investors, venture capital, and initial public offerings (IPOs).

Credibility: What Investors Look For

• Management team strength
• Market analysis
• Competition assessment
• Product/technology viability
• Business model & forecast projections

Resources: Personal Debt

• Funding from founder & family ($100K-$200K).
• Potential financial risk for founders and family.
• Obligation of payback and interest.

Resources: Grants

• Government/foundation funding (SBIR, STTR).
• Funding for proof of concept and development.
• Important competition, including university and foundation events.

Resources: Equity Financing

• Selling shares of the venture.
• Stockholder ownership interest.
• Involvement of Founders, Friends, Family, and Fools (FFF).
• Angel investors ($25K-$200K).
• Angel Groups/Syndicates (aggregating funding).
• Venture Capitalists (VC).
• Strategic Partnerships.
• Initial Public Offerings (IPOs).

What is a Business Model?

• Purpose: provide a clear representation of how a company creates value and captures it.

What is Value (Customer Value)?

• Value is determined by customers.
• Different segments may value a product/service differently.
• Business Model demonstrates creation and capture of value.

Key Questions about Value

• Identifying what customers value.
• Identifying who values the product.
• Defining how value is delivered.
• Determining the worth of the value.

Business Model Innovation

• Creating new models or adapting existing ones to maximize value creation and return for the organization.

Business Model Innovation Examples

• Examples of business model innovation, such as the shift from travel agents to direct booking online. Discussion of model changes in encyclopedias, journalism, and retail.

Key Questions about Business Model Innovation

• Questions to clarify and elaborate on business model innovation and related elements.

Business Model Canvas

• A framework for visualizing business models, including key elements like value propositions, customer segments, revenue streams, and cost structure

Customer Segments

• Grouping customers based on shared characteristics and needs (mass market, niche, segmented, diversified, multi-sided).

Value Propositions

• Bundles of benefits offered to customers through products/services, categorized by purpose and attributes.

Customer Relationships

• Types of relationships companies establish with specific customer segments (personal assistance, self-service, communities, co-creation).

Revenue Streams

• Different ways companies generate revenue from customer segments (usage fees, subscriptions, renting/leasing, licensing, asset sales, brokerage fees, advertising).

Successful Ventures & Innovative Companies

• Need leadership, strong teams, innovation climate

Components of The Innovative Organization

• Customer Orientation: focus on customers.
• Shared Vision: a clear, common goal.
• Appropriate Structure: effective team structure.
• Key Roles: having the right personnel.
• Creative Climate: encouraging creativity.
• Cross-Organizational Engagement: cooperation across the organization.
• Effective Teamwork: collaboration and strong team dynamics

Characteristics of Innovators & Entrepreneurs

• Identifying opportunities/ways to use change/disruption to their advantage.
• Discipline in pursuit of opportunities
• Focused action and execution
• Building networks and using resources effectively.

Cognitive characteristics of Entrepreneurial Leaders

• Gathering information from various sources; attention to detail & perception.
• Intelligence – ability to interpret, process, and use information.
• Sense-making: giving meaning to the data gathered.
• Unlearning: discarding old routines/behaviors.
• Implementation & improvisation.

Entrepreneurial Leadership Attributes

• Strong achievement drive, risk-taking/sensible risk-takers
• Enthusiasm, creativity, quick actions, impatience
• Strong visionary perspective, like hierarchy/bureaucracy
• Preference for dealing with external customer.
• Future-oriented, focused on tasks.

High-Performing Teams

• Common goal, results-driven structure, competent team members, unified commitment, collaborative climate, external support, and principled leadership.

Key Factors in High-Performance Teams

• Clear tasks and objectives, effective leadership, team roles balanced to individuals' styles, effective internal conflict resolution, ongoing liaison with external groups.

3 Simple Virtues

• Humility: being interested in others, focusing on the greater good, recognizing truth, and refraining from arrogance.
• Hunger: having a strong work ethic, striving beyond expectations, avoiding complacency, and exhibiting passion.
• Smart: Having emotional intelligence around people, common sense, and understanding of people's emotions.

Tripwires Undermining Team Effectiveness

• Group vs. team, ends vs. means, structured freedom, support structures/systems, and assumed competence.

Climate Factors Influencing Innovation

• Analyzing climate characteristics that affect innovation efforts. Includes Trust & Openness, Challenge & Involvement, Support & Space for Ideas, Conflict & Debate, Risk-Taking, and Freedom.

Test your knowledge on the stages of the New Product Development Process, including feasibility evaluation, market fit assessment, and marketing strategies. Learn about the importance of business models and customer value. This quiz covers essential concepts for aspiring entrepreneurs and innovators.