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A product development strategy provides the
framework to orient a company's development projects as well as its development process. There
is no one right strategy for a company. The strategy takes into account the company's capabilities
(strengths, weaknesses and core competencies), the competition's capabilities (strengths,
weaknesses, core competencies and strategy), market needs and opportunities, goals, and financial
resources.
As a starting point to develop a product
development strategy, the company must determine its primary strategic
orientation. A company must recognize that it cannot be all things to all people and that it must focus
on what will distinguish it in the market place. There are six primary product development
strategic orientations:
| Time-to-Market |
This involves an orientation to getting a product to market
fastest. This is typical of companies involved with rapidly changing
technology or products with rapidly changing fashion. Pursuit of
this strategy will typically will lead to tradeoffs in optimizing
product performance, cost and reliability. Technology development
must occur on an independent path from product development and
technologies inserted on a "modular" basis, often with frequent
product upgrades to make this strategy work. |
| Low Product Cost |
This orientation is focused on developing the lowest cost or highest
value product. This is typical of companies with commodity
type products, products reaching a mature phase in their life
cycle, or where there is consolidation or a shrinking
market. This orientation typically will require additional time and
development cost to optimize product cost and the manufacturing
process. |
| Low Development Cost |
This orientation focuses on minimizing development cost or developing
products within a constrained budget. While this orientation is not
as common as the other orientations, it occurs when companies are
developing products under contract for other parties, where a
company has severely constrained financial resources, or where a
"stealth" development effort is being undertaken on a "shoestring".
This orientation is somewhat compatible with time-to-market, but
involves tradeoffs with product performance, innovation,
cost and reliability. |
| Product Performance, Technology &
Innovation |
This orientation focuses on having the highest level of product
performance, the highest level of functionality or functions and
features, the latest technology or the highest level of product
innovation. This orientation can be pursued by companies in many
industries or many products except commodity products. Pursuit of
this strategy involves higher risks with newer technologies and
accepts a trade-off of time and cost to pursue these
objectives. |
| Quality, Reliability, Robustness |
This orientation focuses on assuring high
levels of product quality, reliability and robustness. This orientation
is typical of industries requiring high quality because of
the significant costs to correct a problem (e.g.,
recalls in the automotive or food processing industries), the
need for high levels of reliability (e.g., aerospace products), or where
there are significant safety issues (e.g., medical devices, pharmaceuticals,
commercial aircraft, nuclear plants, etc.). This orientation requires added
time and cost for planning, testing, analysis
and regulatory approvals. |
| Service, Responsiveness & Flexibility |
This orientation focuses on providing a
high level of service, being very responsive to customer
requirements as part of development, and maintaining flexibility to
respond to new customers, new markets and new opportunities. This
orientation requires additional resources (and their related costs)
to provide this service and responsiveness. |
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