A Compare and Contrast of the New Product Development Model Essay

New product developments are one of the main sources of competitive advantage for companies today. Companies need new product to keep up with its’ competitors. New product development can be considered as activities that aim to bring new products to market. The objective of NPD is to minimize the risk of failure. As NPD absorbs both financial and human resources from a company, it is therefore necessary to develop and implement a methodology for assisting in the introduction of new products. NPD models can help to identify problems at an early stage and assist in directing the NPD effort in the right direction. It can be used as a roadmap and provides an indication of magnitude of the project required in order to develop and launch a new product. It also helps to reduce risk and uncertainty at every stage by giving guidance regarding what information is required. An example of well known model is Booz, Allen, and Hamilton Model (1982). It has been argued that pass-the-parcel approach to NPD might extend the overall development time. However in more recent models, focus has been given to parallel-processing. The next section mentions about three model of NPD. Cooper’s stage-gate model A stage-gate model (Cooper, 1988) is improved from BAH model. The stage-gate model attempts to overcome pass-the-parcel issues which do not suitable for communicating the horizontal dimension of the NPD process. The stage-gate model uses parallel-processing to acknowledge the iterations between and within stages. The idea of parallel processing advises that major functions should be involved from the early stages of the NPD process to its conclusion. This allows problems to be detected and solved much earlier than in the classic models. The idea of dividing the new product development process into distinct phases or stages is the same as BAH model, but in the stage gate model the phases are more clearly separated from each other with management decision gates. In addition to the discovery gate, the model consists of five action stage: scoping, build business case, development, testing and validation, and launch. Stages are cross functional and each activity is undertaken in parallel to enhance speed to market. To manage risk, the parallel activities in a certain stage must be designed to gather vital information – technical, market, financial, operations – in order to drive down the technical and business risk. Each successive stage is also more costly than previous stage. The idea is to allow an increase in spending on the development of projects as the uncertainty goes down. Preceding each stage is a decision point or gate which serves as a go/kill and prioritization decision point. The advantages of the stage-gate are following: Well organized innovation can be a source of competitive advantage. -Accelerated product development. Necessary because of shortening product life cycles. -Increased success chance of new products. Prevents poor projects early and helps to redirect them -Integrated market orientation. Multiple convergent model The multiple convergent model (Baker and Hart, 1994) follows parallel processing – like the stage-gate model – which allows iterations among participants within stages. However, there are two problems with parallel processing. First, it ignores the important inputs to NPD that are provided by customers and suppliers. Second, if functions are to work in parallel then when do the processes take decisions and move on to the next stage? The multiple convergent model overcomes the issue by using convergent point, where is defined as â€Å"to move or cause to move towards the same point† or to â€Å"tend towards as common conclusion or result†. The model takes account of the functionally distinct tasks which must be carried out simultaneously at specific points throughout the NPD process and that the results must converge. And, due to iterations in the processes, this convergence is likely to happen several times. As the process moves from one step to another, the information gathered becomes more precise and reliable and the decisions are made with greater certainty. This model is therefore advantageous over the stage-gate in that the framework can easily accommodate third parties, provides mechanisms for real integration throughout the process among different functions set in the convergent points and fit into the most appropriate NPD structures for the company. Network model The multiple convergent model fails to highlight the importance of â€Å"inter-organizational collaboration† in a firm’s network. Networks in NPD could and should be considered at two different levels: external and internal level. And it should be realized that the functioning of the internal networks directly influences the efficiency and efficacy of the external network. According to the network model (Trott, 1998), the development and management of knowledge is one of the most important traits of the new product development. It represents the process of accumulation of knowledge crossing continuously over different internal functions, through which both internal and external knowledge is integrated in the process. Four different internal functions are related to new product development: marketing and sales, finance, engineering and manufacturing, and research and development. Different external inputs such as competitors, suppliers, partners, customers, university departments and so on are also presented. Conclusion NPD is a process of transforming business opportunity into tangible products. In order to reduce risks of failure associated with developing a new product, many models have been developed to assist in NPD activities. These models have evolved from the simple linear models to the more complex network models. And, in order for developers of new products to be successful, they must take into consideration the critical success factors in NPD.