Product Development Process

 

Starburst with words hot new products in the center

Ever wonder how great companies are able to launch successful new products? Surprisingly, there’s no secret sauce or crystal ball that helps them. It comes down to a process the company follows to weed out the good ideas from the bad ones. Smart companies realize that it’s far more efficient to spend $25K to do some research and a business case before investing $500K in a new piece of equipment.

Gut feel for an idea can get you part of the way but entrepreneurs have come to rely on that approach a bit too much as they grow. Once a company gets to a certain size and the investment in new products or services become material then relying on gut feel can get expensive and lead to a string of failed products.

If your company is larger than 10 employees and generating in excess of $5M in revenue then a  disciplined development process is likely what you need to adopt. Here is a typical four step process that helps guide more disciplined decisions making.

Successful product development happens in four (4)  phases.

Phase 1 – develop a new product concept or idea. Take the idea off the drawing board and commit it to paper. Develop a detailed description for what the product or service will look like. Don’t worry about trying to get it right the first time. Most new products end up looking quite different from the original idea. The important thing is to commit the idea to paper and get some reaction to it.

Phase 2 -Assess the market opportunity for the new idea. Analyse the competitors in the market currently offering similar products or services. Take a hard look at your competitive position and your strengths & weaknesses by completing a SWOT analysis. Quantify the market size and how big (or small) the opportunity could be.

Phase 3– Prepare a business case that summarizes all the key information about the new idea. How it will be manufactured, the product financials, the operational processes, the business strategy and the marketing strategy. Once this is complete the management team can make a decision based on full information and can be more objective. This is where the decision is made to GO or NOT GO ahead with the idea.

Phase 4 – If the decision is made to go ahead and invest then the key functional group tactical plans can be developed to support the launch. This typically includes the sales, marketing distribution and operational plan detail.

Having a process will help you avoid costly mistakes and improve overall results of your new product initiatives.

Recommended Posts

Leave a Comment