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Product Innovation vs.

Product Evolution
Management Information Systems
Product innovation, in general context is defined as the development of new products, changes in
design of established products, or use of new materials or components in the manufacture of established products Developing and launching a steady stream of successful new products is no easy feat, however. Its certainly much more than proclaiming some ambitious new product goals and hoping the financial community listens. Many companies try, but only a few are stellar at product innovation. For example, only one product concept out of seven becomes a new product winner; on average 44 percent of businesses product development projects fail to achieve their profit targets; and half of all new product launches are late to market. With results like these, no wonder so many businesses and their executives are frustrated. There are exceptions, however. Some companies, like Apple, Procter & Gamble, Johnson & Johnson, Kelloggs, Microsoft, Hewlett Packard, Toyota, Sonyand Pfizer, do make product innovation seem easy. They are the consistent winners, with one big new product breakthrough after another. But exceptional performance in product development is no accident it is the result of a disciplined, systematic approach based on best practices. Four major factors or forces drive a businesss new product performance, according to our studies, and are illustrated as four points of performance in the Innovation Diamond: 1. Strategy: Top performing businesses put a product innovation and technology strategy in place, driven by the leadership team and the strategic vision of the business. This product innovation strategy guides the businesss product innovation direction and helps to steer resource allocation and project selection. 2. Resource investment and focusing on the right projects portfolio management: Top performers commit sufficient resources to effectively undertake their new product projects; and they boast an effective portfolio management system that helps the leadership team effectively focus these resources on the right strategic arenas and to a short list of high-value projects. 3. An idea-to-launch framework for doing new product development projects right: A best-in-class new product process or Stage-Gate system exists in top performing businesses a system or process that drives new product projects from the idea phase through to launch and beyond. This idea-tolaunch system emphasizes quality-of-execution, up-front homework, voice-of-customer input, and tough Go/Kill decision points. This is a vital success driver for virtually all of the Best Performers. Senior managers in top performing businesses create a positive climate and culture for innovation and entrepreneurship, foster effective cross-function al new product project teams, and are themselves properly engaged in the product innovation decision making process. These are the main practices that separate the Best Performers from the rest. These four themes make up the four points of performance of the Innovation Diamond, and they are the keys to successful product innovation. References: 1) Successful Product Innovation: A Collection of Our Best. Authored by Robert G. Cooper and Scott J. Edgett. 2) Wikipedia.

Product Innovation vs. Product Evolution


Management Information Systems
Product Evolution:
The concept of product evolution applies to products changing physically over time, but serving the same function, e.g., the broom and dustpan being replaced by the vacuum cleaner. A new method of price linking, the representative good approach (RGA), is proposed for measuring product evolution using historical documents. The RGA can shed light on evolutionary patterns of technological change, and serve as a check against other methods of quality measurement like conventional price linking and hedonics. Using the SEARS CATALOG, dramatically-different rates of product evolution were estimated for cameras, fans and air conditioners, gas ranges, shoes, and sofas, from 1928 to 1993. The Internet has changed everything. Consumers are wiser and its arguable that knowledge of a topic breeds a more selective consumer. The Internet is partly at fault for putting the world in which we live into high drive. Not only can consumers shop around from their home office chair, virtually comparing prices and features, but they can also demand that it arrive within one day. Thus, both manufacturers and designers are leaning processes to better compete with shorter product lifecycles and increasing global competition which are becoming exponentially fiercer. Product lifecycles are decreasing as designers continue to one up one another, and the Internet has made it easier than ever for consumers to be aware of the difference. Furthermore, distant global manufacturers can better appeal to consumers due to the Web's inherent ability to defy all geographical boundaries. All of this leaves design engineers on both the beginning and anchor legs of a vicious relay race. Global competition cannot be avoided, so what can a design engineer do to increase the desirability of a product while still reducing time-to-market? By making the exact product the consumer is looking for nothing more, nothing less. The aforementioned stepped product development platform is conducive to this process because the more market research that can be collected as a product is launched (or after it's launched), the more feedback that can be gleaned and honed into a better product for the next step in the platform. Anderson believes global competition manifests itself in two ways. "Firstly, 'fast-follower' syndrome is often created by a manufacturer adept at taking the essence of a product and launching it (often at lower cost and very quickly), rapidly negating any competitive advantage you may have gained. Hence the need to respond, increasing the rate at which innovation occurs and reducing time-to-market. Secondly, the larger choice of suppliers for any given market and the ease to which it can be accessed makes purchasers increasingly powerful and selective. They are demanding a personalized serviceno more vanilla products. To compete and win their business, you need to offer them exactly what they are looking for, resulting in more product launches and the need to get to market ASAP. R&D: The Birth Or Death Of A Product? Market research, prototyping, and testing lengthen the product development process, but conceptually in return, this testing can prove to actually shorten time-to-market if it comes up with conclusive results for a design or product definition change, deeming the testing worthy of the time spent in that phase.

Product Innovation vs. Product Evolution


Management Information Systems
In other words, the success of the product may depend on lengthening the time-to-market process in these critical phases, thereby essentially reducing it by preventing and/or avoiding pitfalls. As Spann so eloquently says, Any time you remove ambiguity, you speed up the creative process. Anderson says, [Testing] should effectively increase product development time as any product testing, technical- or market-driven, should be expected to throw up changes and modificationsotherwise there is little point in testing. However, if planned correctly in advance and then implemented accordingly, it will help reduce time-to-market. Product testing enables the team to uncover all of those issues that, when found later in the program, will delay, or in the worst case, cancel a launch altogether. Throw away testing and prototypes at your peril. Theoretical predictive design methodologies and modeling techniques should always be used in advance of any test work to understand the design and manufacturing sensitivities, thereby enabling the development team to focus the prototypes and test work, maximizing benefit. References: 1) Product Evolution Research Paper by Carrie Ellis.

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