tech mgmt - module ii

8/10/2019 Tech Mgmt - Module II

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Technology Management & NPD

New service development(NPD) - completeprocess of bringing a new service to market

NPD & technology management - significant in

obtaining firms' competitive advantage


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NEW Service

New-to-the-World services(10%)

New service Lines/Functions/Applications(20%)

Additions to Existing service Lines(26%)

Improvements and Revisions of Existing

services(26%) Repositioning(7%)

Cost Reductions(11%)


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Clear strategic direction

NPD strategy must:

Fit with company strategy

Fit with company skills and capabilities

Fit with company ethos/style


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Danger of new services NOT fitting

strategy/capability/style

NPD is risky enough anyway, why make it riskier?

Opportunity cost is high : resources are finite

Existing customers may be alienated


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Sources of New services

External

Sourcing

CollaborativeVenture

Internal

Development


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SWOT Analysis

SWOT

Strengths Weaknesses Opportunities Threats

Internal External


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New-service Development Process

Idea Generation

Idea Screening

ConceptDevelopment

& Testing

BusinessAnalysis

PrototypeDevelopment

Test Marketing

Commercialization


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New-service Development Approaches


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How is it Done?

Market facts& ideas

Technicalfacts &ideas

Phase I

ConceptGeneration

Phase II

Business

PropositionDevelopment

Phase III

Launch

Preparation

Launch/Rollout

Gather ideas

Conductdemandresearch

Developproject briefs

>>>>>>>>>

Activities Build total

proposition

Determine,test, refinecomponents(packaging,name, etc)->>>>>>>

Organise

logistics

Preparemarketingcampaign

Brief salesforce

ITERATIVE

Launch marketing

campaign

Distribute service

Monitor progress


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Phase 1: Concept Generalisation

Cross functional inputs required:

fusion of ideas from R&D, marketing,logistics

open sharing of ideas

formal and informal interdisciplinary

forum


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Phase 2: Business PropositionDevelopmentChange from concept to sound business

propositions:

Prototyping

Market research

Test marketing

Pre-serviceion engineering and costing New service business plan/proposal


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Phase 3: Launch Preparation

Close multifunctional approach required:

Establish marketing mix (4Ps)

Packaging development

Market testing

service refinement

Sourcing serviceion engineering

Begin manufacture


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Launch Put marketing mix (4 Ps) into

practice

Monitor progress Log successes and failures

Redeploy team thoughtfully


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New service Development Stages

Motorola 4 stagesservice DefinitionContract DevelopmentDevelopment through manufacturing start-upProgram wrap-up


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Kodak- 6 stagesCustomer mission/visionTechnical demonstration

Technical operation/feasibilityCapability demonstrationservice/process designAcceptance and serviceion


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Xerox - 7 stagesPre-conceptConcept

DesignDemonstrationserviceionLaunchMaintenance


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GenericGet an idea

Prove it worksDevelop and test itScale it upLaunch it

Monitor things

Keepiteratin


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Approximate Costs of NPD: %

Industrial ChemicalsConsumer Goods

100100

5779

13

28

2

16

3

2

Stage

OpportunityIdentification

Design

Testing

Launch

Total

100% = $12.6m $4.7m

Source:McKinsey analysis


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NPD & Technology

Extensive use of technology (eg CAD/CAM)


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Organisational Options for NPD

As part of R&D As part of marketing Within its own department

Throughout the organisation

Via NPD committee Via new service task-force Small permanent staff Matrix organisation Entrepreneurial division Alliances

Common options

Less frequently used options


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Rugby Approach vs Baton Appro

Baton

Phase 1 2 3 4 5 6

Rugby 1

Rugby 2

Phase 1 2 3 4 5 6

Phase 1 2 3 4 5 6


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Pros and Cons of Rugby vs Baton App

Direct benefits

Indirect benefits

Direct problems

Indirect problems

Faster developmentIncreased flexibility

Shared responsibility andcooperationLasting understanding of others

agendasDiversified skillsWider problem solvingcapabilities

Resentment of otherdepartments (?)

Erosion of specialist skills(?)

Communication throughoutlarge teamMaintaining cohesionHeightening tension


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R&D and Manufacturing Working

Together-Example

IBM Dot Matrix Printer

Needed cheap effective

printer Small team of R&D and

manufacturing

Mandate: work together to

simplify service with tightdeadline

Result:

150 parts down to 60

Developed in half normal time

Very reliable service

Became market leader in 5 months


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CAUSES OF NEW service FAILURE

Failure in Market Research Findings

Overestimated Demand and Size of Market

Design Failure

Positioning Problem

Ineffective Communication/Promotion

High Development Cost/ Price Pressure from Competitors

Poor Timing


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CAUSES OF NEW service SUCCESS

Technological Superiority

Easy of Market Entry

Competitive Advantage

Size and Speed in Market growth

Identifying Needs/Wants and Good Timing

Effective Promotion/Communication Uniqueness of the Concept/service

Marketing and Managerial Synergy/Team Effort


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CHALLENGES IN NEW service

DEVELOPMENT Shortage in New service Ideas

Fragmented Markets

Social and Governmental Constraints

High Development Cost

Shortage of Cash/Capital

Faster Development Time Shorter service Life Cycle


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EFFECTIVE ORGANIZATIONAL

ARRANGEMENTS Top Management:

R&D Budget.

Organization for New-service Development: service managers

New service Managers

New service Committee

New service Departments: R&D.

New service Venture Team


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service Design Parameters

tech mgmt - module ii

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