Case Study 3
New product introduction was identified as a major corporate weakness in the strategic planning process. The company ($50 million in sales and publicly traded) had not introduced a major new product in over two years; the products in the current development cycle were line extensions, nothing innovative.
The last major product launch was a financial disaster. The product was late to market, suffered from quality issues and didn’t fully address users’ needs. The product planning process had failed to properly assess market requirements and trends. By the time the product launched, it was obsolete.
The company needed to return to growth and market leadership by developing a new product planning process. This process needed to identify real market opportunities and yield a steady stream of winning new products while eliminating costly mistakes of launching inadequately defined products.
The new product development process lacked continuity and metrics; it was too conservative and reactive. The first step was to create a cross-functional senior management team to screen, refine and monitor ideas. We developed a systematic approach to defining new products from a customer and market perspective. Specific benchmarks and performance metrics were incorporated to keep the development process on track and the concept focused.
A second team made up of marketing, technology, operations and sales personnel was created to generate ideas. To tap innovation throughout the company a process to submit ideas was implemented. In addition, an “idea generation” session at the quarterly sales meeting was created. Finally, iNPD created a focused sales and marketing strategy to identify and acquire new products from potential worldwide business partners.
Over the next five years, the company’s revenue grew from $35 million to over $55 million. It introduced four major new products and had three additional products in the development pipeline. The company no longer had to worry about new product failure due to misunderstanding of market requirement. It also developed business relationships with four development firms and two OEM manufacturers. These relationships provided additional expert development resources and new products.