A Glossary of s2m's Most Searched New Product Development Related Terms
A tool created by Strategy 2 Market to facilitate the execution and implementation of the new product development process. It includes detailed explanations of each stage of the process including important activities and responsibilities associated with every step within the NPD process.
This stage is intended to flesh out the product concept into a winning product definition, and to develop a sound basis for taking the project into the development stage. The major activities during this stage include a cross-functional team working together in building a robust business case. It includes thorough market, technical, manufacturing, financial, risk, and legal assessments.
Explains who your customers are and how you plan to make money by providing your customers with value, as opposed to the Business/Competitive Strategy, which explains how you will beat competitors by being different. The Business Model defines Who, What, Where and How: Who are you serving, What is the value proposition you are providing, Where will you make and sell the product/value proposition, and How will you structure the company and processes to create, sell and deliver the product/value proposition at the right price and profit margin.
Using both qualitative and quantitative methods to determine the technical, financial, and marketing feasibility of a product. This could involve ranking multiple concepts to determine which concept is most likely to succeed and should move forward in the new product development process.
The initial phase of concept generation includes the identification of a problem or unmet customer need. Depending on the complexity of the problem, it can be broken into subgroups. The next phase includes trying to solve the problem, and this can be done by a variety of methods including: brainstorming, observing extreme users, ethnographic research, etc. This is also an excellent time to start to introduce prototypes into the new product development process. Prototyping is an excellent method to generate bits of proof early in the new product development process.
Diffusion is defined by Everett Rogers as the process by which an innovation is communicated through certain channels over time among the members of a social system. Some people take longer than others to try out and adopt a new innovation.
This is one of the earliest stages in the new product development process. Activities during Discovery include a high level investigation and description of the idea. The description should include an overview of the idea, the problem it will solve, strengths and weaknesses of the idea and strategic alignment. It is also helpful to provide an overview of the competition as well as the value proposition of the idea.Fuzzy Front End (FFE) is the messy beginning period of product development, when the product idea is still very vague. It precedes the more formal new product development process and generally consists of three tasks: strategic planning, concept generation and concept evaluation. These activities are often chaotic, unpredictable, and unstructured. In comparison, the subsequent new product development process is typically structured and predictable, with prescribed sets of activities, deliverables and decisions to be made.
Gatekeepers play an important role in the Stage/Phase Gate process. They are the decision-makers that make important project decisions based on strategically driven criteria. It is best practice to have gatekeepers vary based on the stage of the new product development process. Executive gatekeepers should be involved early in the new product development process when strategic alignment is of the utmost importance. Since the tasks are more tactical in nature during the Development through Launch stage/phase, it is appropriate for non-executive gatekeepers to monitor the projects during these stages in the process.
Distinct period of time where a cross-functional management team reviews all key deliverables presented by the product development team. The project will encounter a decision point where it can be given a Go (Green), Stop (Red), Recycle (Yellow), Hold (Blue).
Tool created that outlines and explains various programs & techniques for generating new product ideas internally and externally, and for ultimately keeping the new product development pipeline full.
Usually offers a modest enhancement in features or functionality. It commonly extends a product line or fills a minor gap in the existing product line.
An innovation creates value for the customer in a new and unique way. As Peter Drucker said, a product that is different, but does not create new value for the customer, is merely a novelty. A novelty may temporarily capture a customer’s interest because it is different, but it will quickly be replaced by a new novelty. An innovation, on the other hand, provides new value to the customer and the customer is willing to pay to obtain that new value.
The attributes, features or other issues that a customer considers in determining which, if any, product to purchase. Understanding key customer drivers is important in developing products, determining pricing and positioning, and selecting distribution channels.
Referred to as early a dopters of new methods, products and technologies. They provide significant opportunities for introduction of breakthrough products since they are in the forefront of new concepts when compared to the general public.
Market Research is a systematic, objective collection and analysis of data related to a market, customer base, industry, competition, etc. In new product development, market research serves many purposes, such as identifying new product opportunities, understanding customer needs, evaluating product concepts, evaluating product prototypes and evaluating market acceptance.
A matrix structure organizes people and resources simultaneously, by function and product. Employees with similar skills are grouped together for product work. For example, all engineers may be in one engineering department and report to an Engineering Manager, but these same engineers may be assigned to different projects and report to a different Project Manager while working on that project. There are vary degrees of the Matrix Organization, including: 1) Functional Matrix- Project Managers have little authority; consequently decisions are often delayed during project meetings. The Functional Manager retains the decision making authority, 2) Balanced Matrix – The Project Manager and Functional Manager have equal authority, this leads to potential conflict, 3) Heavy Weight Project Matrix - The Project Manager has decision-making authority, and the Functional Manager provides technical expertise, this structure is commonly used in organizations that practice Lean principles.
Metrics track product development and allow a firm to measure the impact of process improvements over time. These measures generally vary by firm, but may include measures characterizing both, aspects of the process, as well as outcomes from product development.
Stage developed to evaluate low risk projects that include simple revisions or cost saving projects.
Refers to an organization structure that supports functions that are in separate divisions within an organization. Typically used by an organization/conglomerate whose products are very different between divisions. This structure is advantageous for organizations that have divisions that serve significantly different industries and customers.
A network structure is a cluster of different organizations whose actions are coordinated by contracts and agreements rather than through a formal hierarchy. This is analogous to an organization that outsources their major functional areas (e.g. IT, Supply Chain, Manufacturing).
Is an activity that is executed in the early stages of the new product development process a.k.a. the Fuzzy Front End (FFE). Prior to the identification of the opportunity, an opportunity/market scan can be performed to determine the best opportunities. Once the opportunity is identified various techniques (see Concept Generation) can be used to solve the problem or an unmet customer need.
Perceptual mapping simultaneously compares key customer drivers on brands, products, companies or other attributes. The perceptual map is used to investigate several kinds of questions: Which brands are similar to mine in the customer’s mind? Does the customer perceive my brand in the way I intend? Is there white space in an area important to customers that I can take advantage of?
A collection of the common elements, especially the underlying defining technology, implemented across a range of products. In general, a platform is the lowest common denominator of relevant technology in a set of products or a product line.
Portfolio Management is a decision-making process where a business’ list of current and proposed new product development projects is continually reviewed and revised. The review usually covers criteria such as strategic alignment, risk, reward and resource availability.
The number of portfolio management teams within an organization can vary based on the size. In mid-to-large size companies, two portfolio management teams are common. The first team consists of a “core multi-functional portfolio team” that meets monthly. This team is responsible for scoring and prioritizing projects across the organization and assigning resources. This monthly output is then provided to a second team which consists of executive management. The second team is commonly referred to as the “executive portfolio management team” and usually meets on a quarterly basis to ensure the balance and strategic fit of the portfolio. They ultimately make the decision on whether projects will remain or proceed in the new product development process.
This occurs usually prior to the Discovery Stage/Phase. It is a very gentle screen to determine whether an internal or external idea deserves additional resources prior to moving to the Discovery Stage/Phase.
An organizational structure in which centralized support functions service the needs of a number of different product lines. Typically used by organizations whose products are broadly similar and aimed at the same market, such as a food company that produces frozen foods (e.g. pizza, vegetables, and desserts).
A product portfolio ideally contains projects that represent different product types and levels of risk. You want to balance and maximize the value of the portfolio during the portfolio management process. The portfolio process also provides an avenue to ensure appropriate resource allocation by ensuring that the “right project” is chosen. Projects that enter the portfolio management system should be consistent with the strategic direction of the business.
Products that are unchanged in quality or feature set that are marketed with a different set of benefits. An example includes repositioning aspirin as a safeguard during a heart attack as well as a temporary pain reliever.
Defines the future vision and goals for each category, product line and product, as well as a plan for reaching those goals. Generally a product strategy document will address the nature of the product(s), the target markets/segments, the technologies/platforms to be leveraged or developed, and a description or metrics for an end result by which progress/achievement can be assessed. The plan for reaching the goals is often displayed in the form of a product roadmap, describing incremental improvements, major overhauls and brand new products to be released along a timeline.
Product Team Structure/Tiger Team
A divisional structure in which specialists from the support functions are combined into dedicated product development teams, this structure is also referred to as a Tiger Team. It is typically used by an organization whose products are very technologically complex or whose features/functionality change rapidly to meet customer needs. It is also an excellent structure for developing New to the World or New to the Company products.
Is a matrix tool that assists a cross-functional team in translating customer needs into technical requirements.
Roadmapping is a tool that can be used for planning and depicting your new product and technology acquisition strategies. The output of a product-technology roadmapping exercise is a roadmap that displays market and business needs over time, along with the products, technologies and other resources required to meet those needs.
Document created to capture a preliminary market, technical, manufacturing, financial, risk, and legal assessment. This document is presented to the gatekeepers during the Scoping Gate.
Activities during Scoping include conducting secondary research on the proposed idea. It is quick preliminary assessment that helps determine whether the project is worth pursuing in the next stage/phase. It is too early in the Scoping Stage/Phase to determine any financial metrics like NPV or ROI.
An alternative phase-gate stage developed to review low risks projects including: Product Revision and Cost Improvement product types.
This is a new product development process in which a set of activities and required deliverables are defined for sequential stages/phases. Phases are separated by decision points, or Gates, in which deliverables from the prior phase are evaluated and a decision is made on whether to advance to the next phase.
Separate periods of time where specific tasks are undertaken by the project team and key deliverables are developed to present during the gate meetings.
The Strategy Canvas is a tool for mapping out white space in strategies. It was popularized by W. Chan Kim and Renee Maubogne in their book Blue Ocean Strategy. This tool visually displays the strategies of firms in a market space, making it possible for the user to identify radically different strategies that may create new value for customers.
Defines the set of technologies required by the firm to support the product strategy, the method of acquisition and timing. Technologies can be acquired by various means, including internal development, licensing, joint venture and/or business acquisition.
VOC is a process for gathering and prioritizing needs from customers. It uses indirect questioning to lead interviewees through a series of situations in which they have experienced and found solutions to the set of problems being investigated. The result is a structured hierarchy of needs, expressed in the customers’ own language and prioritized by importance and satisfaction
White space is that unexplored and undiscovered domain of opportunity for new products and new markets.