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Lecture 01 and 02-Introduction To New Product Development

This document provides an introduction and overview for a course on New Product Development (NPD). It introduces the lecturer and their qualifications. It outlines the course structure, including its level, prerequisites, and assessment breakdown. The learning outcomes and objectives are also summarized. The document then begins covering course content, starting with an introduction on why NPD is important and the potential rewards and risks of successful versus unsuccessful new product development. It also discusses reasons for organizations to innovate and different types of innovation.

Uploaded by

Aiyas Aboobakar
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© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
47 views

Lecture 01 and 02-Introduction To New Product Development

This document provides an introduction and overview for a course on New Product Development (NPD). It introduces the lecturer and their qualifications. It outlines the course structure, including its level, prerequisites, and assessment breakdown. The learning outcomes and objectives are also summarized. The document then begins covering course content, starting with an introduction on why NPD is important and the potential rewards and risks of successful versus unsuccessful new product development. It also discusses reasons for organizations to innovate and different types of innovation.

Uploaded by

Aiyas Aboobakar
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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An introduction to New

Product Development (NPD)

Lecturer
Goh Boon Gee
E-mail: [email protected]
Master Degree in Business Administration
-International University of Japan(IUJ)
Bachelor Degree in Finance University of
Nebraska Lincoln (UNL)
7 years working experience in International
Financial Institution & Franchise Management
(USA, Malaysia, Japan)

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Title of Slides

Introduction
Personal Introduction- Please tell me a
little bit about yourself including your

Name(by which you like to be called)


Working Experience if any
Nationality
Tools or skills you would like to gain from this class

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Class Structure
Course Level

Semester 1 Year 3

Prerequisites

Creativity and Innovation

Course assessment overview

In course assignment (50% subject to change)


Final Exam(50% subject to change)

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Learning Outcome
1. Demonstrate knowledge and understanding of
the widely recognized attributes necessary in
developing and successfully commercialising a
new product.
2. Develop coherent lines for argument and
suggested informed solutions to innovation
management scenarios.
3. Apply and evaluate innovation management
and new product development techniques for
launch planning, implementation and
management
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Learning Objectives
Recognise the importance of innovation
Explain the meaning and nature of
innovation management
Provide an introduction to a management
approach to innovation
Recognise the need to view innovation as
a management process

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Class 1- Introduction
Why is New Product Development
important?

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New Product DevelopmentIntroduction


New Product development is one of the riskiest, yet
most important, endeavors of the modern corporation.
Certainly the risks are high. You and your colleagues
have seen as large amounts of money spend on new
product disasters in your own firm. But then, so too are
the rewards.
New product currently account for a staggering 33%
of company sales on average. That is one third of the
revenues of corporations are coming from products, they
did not sell five years ago. In some dynamic industries,
the figures is as high as 100%!!!

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New Product DevelopmentIntroduction


Research in this area suggest that 65% of
new product launches succeed
And this is only the success rate of those
products that actually make it to their actual
launch
Some researchers have found that only 20%
of all products upon which development has
begun actually succeed.

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New Product DevelopmentIntroduction


Rewards from Successful New Product
Development
Astounding ROI: The average ROI for
successful new products is 96.9%
Payoff very quickly: The average payback
period is 2.49 years
Excellent market positioning: The average
market share in their defined target markets is
47.3%
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New Product DevelopmentIntroduction


2006 Rank

Company

Margin growth % Stock Returns%


1995-2005
1995-2005

Apple

7.1

24.6

Google

NA

NA

3M

3.4

11.2

Toyota

10.7

11.8

Microsoft

2.0

18.5

General Electric

5.7

13.4

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Title of Slides

New Product DevelopmentIntroduction


Innovation is not a single action but a total
process of interrelated sub process. It is not just
the conception of a new idea, not the invention
of a new device, nor the development of a new
market. The process is all these things acting in
an integrated fashion

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Title of Slides

New Product DevelopmentIntroduction


Rewards from Successful New Product
Development(median value)
50% of successful new products achieve 33%
ROI or better
Half of successful new products have a
payback period of two years or less
Half of successful new products achieve a
market share in excess of 35%

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New Product DevelopmentIntroduction


Why is there a need for organization to
innovate?

Technology Advances
Changing Customer Needs
Shortening Product Life Cycles(PLC)
Increased World Competition

Will these reasons be no longer relevant in


the next 40 or 50 years?
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New Product DevelopmentIntroduction


Different Type of innovation
Product Innovation
Process Innovation
Organization Innovation
Management Innovation
Production Innovation
Commercial/Marketing innovation
Service Innovation
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New Product DevelopmentIntroduction


Why New Product Development?
Increasing level of innovation in competitive
environment settings
More resources are being dedicated into
innovating products
Success of such resource allocation is
inconsistent at best
A structured approach to new product
development is require to enhance success rate
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New Product DevelopmentIntroduction


Winning at New Products
Speed yields competitive advantage?
Speed yields higher profitability?
Speed means fewer surprises?

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New Product DevelopmentIntroduction


Categories of New Products
1.
2.
3.
4.

New to the world products


New product lines
Additions to existing product lines
Improvements and revisions to existing
products
5. Repositioning
6. Cost reduction

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Questions?

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Tutorial
1. What is wrong with the popular view of
innovation in which eccentric scientist
develop new products?
2. What is the difference between an
unsuccessful innovation and an invention?

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Answers
Q1
Quite simply it is damaging to the reputation of science
and scientists in particular. One can understand why it is
popular with film makers and tabloid press editors and
that is because much of science is not understood and
also because people live in hope that scientists can do
anything. The truth is very different, and virtually all
scientific progress is slow and takes many years of many
peoples considerable efforts. Progress is also largely
down to teamwork, with considerable size groups of
scientists often working on particular projects.

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