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Principles of Managing New Product Development
New Product Development Should Be Strategic
Every business opportunity or problem in which new products play a role will be unique to the situation at hand. The timing, business environment, consumers, competitors, other major stakeholders, and organizational resources represent sets of factors that may be so idiosyncratic to a new product situation that relying on general prescriptions for success can be fatal for the new product. Managing under situational circumstances requires a kind of strategic intellectual scope and agility that facilitates response to uncertain and unexpected conditions—yet does not stray from the core business strategy without sufficient analysis. Building this strategic intellectual capability into an organization's daily life should become a guiding principle in managing new product development.

Building the necessary intellectual resources depends largely on education and accumulated experience. Although a book about new product development cannot provide direct experience, it can encourage and facilitate a managerial learning process to enhance responsiveness in thinking about new product situations that arise. If a conceptual view of new product development that includes numerous strategic factors defining new product situations is constructed, and if that view is communicated within the organization, the chances of succeeding with a new product in a turbulent business environment are significantly enhanced.

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New Product Development Should Be Flexible
A key task of managing new product development is linking it to an organization's strategy. This linkage occurs through the typical situation analysis that provide the basis for developing strategic options (for example, assessing strengths, weaknesses, opportunities, and problems). Such analysis begin with recognizing major global forces with pervasive trends (such as economic systems, demographics, or technology) that lead to complexity and rapid change, a major source of uncertainty. The improved technology and declining prices of microprocessor chips certainly had dramatic effects on Compaq's business environment. To manage new product development effectively under rapidly changing circumstances requires a development process that has flexibility to cope with them. Such flexibility is ensured by a resource commitment commensurate with the importance of new product development to the organization. The more resources are available, the greater the flexibility in handling turbulence.

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To further clarify flexibility, it is important to distinguish between an organizations new product development process and a specific project within it. The process consists of the intellectual aspects of new product development that should permeate all aspects of an organization. The project pertains to a specific market opportunity for which a new product is being targeted. For smaller, newer organizations this could be a single product project; for larger organizations it could be multiple product projects carried on simultaneously or over time. Flexibility makes multiple projects possible and facilitates change within a specific project.

New Product Development Should Be Interactive
As environments change, so do the needs of various stakeholders within them. Thus, to keep up with these changes, establishing and maintaining an interactive relationship with major stakeholders throughout the development process is necessary (to identify and capitalize on market opportunities). In the Compaq case, potential buyers (personal and organizational) found it increasingly difficult to differentiate between more expensive personal computers, like Compaq, and the less expensive clones. Staying close to the customer to discover such changes quickly should be more than a cliche in new product development.

New Product Development Should Be Integrative
The way in which an organization responds to opportunities for new products determines the success of the development process. Unfortunately, although organizations recognize the need to develop new products, they also tend to resist change. This resistance can often be traced to differences in functional departments within an organization, and differences in political coalitions that emerge over time. Motivating the organization to respond to opportunities (and problems) requires an integration to occur that overcomes the resistance to change. The most popular vehicle for achieving such integration is building new product development teams with strong leaders (or new product champions], strong followers, and adequate incentives. For these teams to bring about the needed integration, they should be cross-functional in composition.

New Product Development Should Be Ongoing
There is little that is static about new product development. Because environments, markets, and organizations are always changing, so too are their effects on new products. Even for a specific product, constant evolutionary changes occur—up to and beyond the moment of launch. It is therefore important to have a clear view of new product development as an intellectual process shared among organizational members so that program implementation and necessary adjustments (which are so often essential for success) can be made quickly. It is also important to maintain a data base of historical and current information along with a decision support system to facilitate relatively quick analysis and decisions and to resolve differences of opinion that frequently arise. Commitment to this "ongoing" principle recognizes the importance of learning throughout new product development and emphasizes the central role of new products in an organization s continual process of renewal.

Source :
Robert J. Thomas, New Product Development: Managing and Forecasting for Strategic Success, Wiley. You can find this excellent book here

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