Introduction to New Product Development

When developing new products for the marketplace the business must subject the product idea to a comprehensive planning and evaluation process. This process can be broken into four distinct stages. Each stage is unique and the work of that stage must be completed before moving onto the next. Moving ahead too quickly can prove fatal for a number or reasons including:

These failures are the result of poor planning. Although planning cannot guarantee success, it can significantly reduce the risk of failure. Studies consistently show that although 80% of new businesses fail within the first three years, proper planning and education increases the success rate to over 90%. In the case of technology products, in reality the vast majority of new products never proceed beyond the concept stage.

The four stages to new product development are:

  1. Complete an environmental scan and develop a strategic direction
  2. Develop a proof of concept strategy (project feasibility)
  3. Develop a pre-production strategy (the prototype)
  4. Develop a commercialization Strategy

Each stage represents a plateau in the new product development process. Stages 2 and 3 are concluded with the Go / No Go? question. It should be kept in mind that at each new stage the issues become more complex and expensive. In fact, the need for capital generally rises exponentially as you move from stage to stage. Clearly, if at any stage the answer is a No Go, then the project should be abandoned at that stage.