Product Development and Entrepreneurship-Overview

8/12/2019 Product Development and Entrepreneurship-Overview

http://slidepdf.com/reader/full/product-development-and-entrepreneurship-overview 1/30

5-1

Dr. N. Kabare

May 16th, 2014

New Product Development&

Entrepreneurship

Overview



5-2

New Prod Dev overviewNPD: Developm ent o f or ig inal produc ts, produc timprovements, produ ct modi f ications, and new b rands

through the firm‟s own R & D efforts. Aim-To enhance success of the new product in the market

New products suffer from high failure rates due to:

Poor designWrong timing

Overestimation of market size

Priced too high

Ineffective promotion

Management influence

High development costs

Incorrect positioningCompetition



5-3Major stages in NPD



5-4

Produc t L i fe Cycle

Product life cycle (PLC) is the course that aproduct‟s sales and profits take over itslifetime

» Product development

» Introduction

»

Growth» Maturity

» Decline



5-5

Product L i fe Cyc le Stages

Sales

Time



5-6

Extending the Product Life Cycle

Sales

Time

Effects of ExtensionStrategies



5-7

SLIDE 7

6-3 Entrepreneurship Overv iew

As shown on course out l ine, the top ics inc lude:

Factors to consider when starting a business

Common causes of Failure in Small Businesses

Elements of a Business Plan.

Business Environment

Types/ sources of financing for small business

Marketing of Services



5-8

What is Entrepreneursh ip?

• Entrepreneurs promote new combinations or

innovations to reform or revolutionalize thepatterns of production by exploiting inventionsor untried technological possibilities forproducing new commodities or old ones in a new

way (Schumpeter, 1934).• Entrepreneurship is the process of creating

something new with value by devoting thenecessary time and effort, assuming the

accompanying financial, psychological andsocial risks and receiving the resulting rewardsof monetary and personal satisfaction andindependence (Hisrich and Peterss, 2002).



5-9

Defin i t ion con t

•Entrepreneurs are oppo rtuni ty focu sed, they startw i th what custom ers and the marketp lace wantand do not lose sigh t of th is . They so lveproblems or satis fy needs for a prof i t .

• Entrepreneurs travel on the road less taken,stro l l ing in the und iscovered terr itor ies, do ingthings that were never done before. Here there is

no def in i te path, no def in i te technique. A l l youhave is a dream , a goal, and al l you can do isexper iment un t i l you succeed.



5-10

Provis ion o f Un ique Featu re(s ) is

key to success of a business

Other key considerat ions inc lude:

. A Grow ing Market Segment.Know You r Customers

.Watch Compet it ion

.Speed

The fo l low ing examples d rawn from

var iou s f ields demonstrate this



5-11

1) Offer Un ique Featu re

Usain Bolt of Jamaica leaves his rivals trailing on his way to winning the men'sOlympic 100m final in Beijing



5-12



5-13Bu t Bo l t is s low of f the mark

So how does he w in?



5-14

More Fast Tw itch Muscles

• Bolt (L) is known to be a slow starter. His speed came

in part due his "extraordinary large stride length",despite having such an initial slow reaction time to thestarting

• "And he has lots of fast twitch muscle fibres that can

respond quickly, coupled with his fast stride is whatgives him such an extraordinary fast time."

• The key determinant of foot speed in sprinting is thestride length and the ratio of fast-twitch muscles toslow-twitch muscles in a sprinter's physical makeup.

• Fast-twitch muscles produce no more energy than slow-twitch muscles when they contract, they do so morerapidly through a process of anaerobic metabolism,though at the cost of inferior efficiency over longer

periods of firing.



5-15

Usain Bol t con t

• The average human has an almost-equal ratio of fast-twitch to slow-twitch fibers, but top sprinters may haveas much as 80% fast-twitch fibers, while top long-distance runners may have only 20% (Kenyans?)

• Bolt has lots of scope to break his record if he

responded faster at the start, ran with a slightly strongertail-wind and at a higher altitude, where there was lessdrag. Same reasoning in business oppo r tuni ty search!

• All of which points to the reasons behind Usain Bolt's

success, because he uses longer strides and during a100m race his feet remain on the ground less than hisrivals. In Beijing Bolt covered the 100m in between 40and 41 strides, whereas the average for the otherfinalists was 47. His stride length was measured at

about a foot longer than the other sprinters.



5-16Kenyan Example

• How Kenyan farmers quailed at quail farming

•

Quail eggs were hailed as the answer to all ailments;prices rose fast; enterprising Kenyans rushed in tomake money; supply surged and prices fell backsharply; many were left nursing wounds and cursingtheir luck.

• A business is not attractive just because demand isrising. It is attractive if that demand can be met uniquelyand distinctively by you. In other words, you have someparticular advantages as a producer, and can corral agood part of the market.

• If a business can be entered by many, price will not stayhigh. Before you start take a moment to consider theforces of supply and demand. What caused the pricesurge? How much demand is true consumption

demand, and how much is hype? It is amazing thatthose quest ions are not even considered.



5-17

But how do you ident ify

Unique Featu res?

As shown below, the Kano model

class i f ies p roduc t features from

a customer‟s perspectiveand can help to evaluate featu res



5-18The Kano model- featu res

• Delighters: Provide satisfaction when achieved fully, but donot cause dissatisfaction when not fulfilled. Unexpectedfeatures.

• Satisfiers: Cause satisfaction when fulfilled and dissatisfactionwhen not fulfilled. The often spoken of and ones which firms

compete for. Eg a milk package said to have 10% more milkfor the same price will result in customer satisfaction if so, anddissatisfaction if not true. Also fuel efficiency in vehicles

• Must-be: Attributes taken for granted when fulfilled but result

in dissatisfaction when not fulfilled. Eg a leaking package ofmilk causes dissatisfaction but when it doesn’t leak the result is

not increased satisfaction. Expected attributes, viewed as basic.

• Indifferent Quality: Refers to attributes/aspects that areneither good nor bad and they do not result in either customer

satisfaction or dissatisfaction. Could be un-necessary

5 19Kano model



5-19• Kano model

Delighters/ Exciters

(Differentiation)

One-dimensional /Linear Satisfiers

(Competitive)

Basic/ Must-be/ Dissatisfier

Expected Quality

(Cost of Entry)

Le v e l of P e r f o r m a n c e

C u s t o m e

r

S a t i s

f a c t i o n

Satisfied

Dissatisfied

+

-

+ -

Insufficient

Sufficient Neutral

Movement over time

5 20



5-20

E.g. A irbus v/s Boeing compet ing on sat is f iers

• Feb 10th 2014 at Singapore air show:

Airbus said:

More than half of their jet is made of lightweightcarbon fiber to make it lighter and more fuel

ef f ic ient, a key cons iderat ion for air l inescontend ing w ith vo lat i le fuel prices.

Passengers will benefit from larger windows,bigger storage bins, better air quality and mood

lighting in the cabin." A t the end of the day ou r airp lanes are judgedby th eir eff ic iency but also by how much thecustomer enjoys it," said Fernando Alonso, senior

vice-president for flight testing.

5 21



5-21

Airbus v/s Boeing

However, on June 19th 2013 at Paris Air show:

Boeing had said:

Their 787-10 Dreamliner under production “will

be the most-efficient jetliner in history, 25%more efficient than comparable airlines and morethan 10% better than anything being offered bythe competition for the future.

” Final assembly and flight test of the 787-10 areset to begin in 2017, with first delivery targetedfor 2018.

5 22



5-22

Unique Feature

Streng thens Your Prom ise

• Your promise is the set of benefits delivered by yourproduct that provide values to customers. This is calledValue Proposition

•

Best-practice suppliers base their value proposition onthe few elements that matter most to target customers,demonstrate the value of this superior performance, andcommunicate it in a way that conveys a sophisticatedunderstanding of the customer‟s business priorities.

• Aim: one or two points of difference whoseimprovement will deliver the greatest value to thecustomer for the foreseeable future: your corecompetence or resonating focus- (see Harvard Review

Article sent with this ppt)

5 23



5-23

2) Choose a Grow ing

Market Segment

“As we look at the next 20 years the AsiaPacif ic market w i l l be the largest marketplace in the wor ld. We expect passenger

traf f ic to grow abou t 6.3%, cargo traf f ic at5.8%. As a resul t o f this grow th we see totaldemand of c lose to 1300 airplanes here inthe Asia Pacific region,” said Randy Tinseth,

vice president of marketing at BoeingCommercial Airplanes at the Singapore AirShow 10/02/2014

5 24



5-24

3) Know you r customers

Oreo‟s Chinese twist:

The world‟s favourite cookie was a failure withChinese consum ers. That is, un t i l K raft Foodsdiscovered the magic of „heaty‟ & cooling foods

In China, the brand needed to be more innovativeif it was to make an impact. As the companydelved deeper into its China market research,they found more opportunities to grow.

In Ch ina, sales o f cook ies and o ther chocolateproducts tend to s low down in the summer.Warren says the Chinese have what they cal l“heaty” foods and cooling foods, the former for

co lder mon ths and the lat ter for warmer t imes ofthe year. Cookies were tradit ional ly a heaty fo od .

5 25



5-25

Oreo cont…

To boost summer sales, in 2009 Oreo developed acrème that had a cooling sensation when licked to

create both a vanilla and green-tea ice-cream-

flavoured cookie. It’s now the second-most-popular flavour after original Oreo.

5 264) W t h C t it



5-264) Watch Compet itors

Keep Watch of Competition/ Customers are a Moving Target

BlackBerry's downfall came down to apps USA TODAY Sept 20, 2013

BlackBerry's missteps went beyond one that has been the death ofmany makers of mobile devices: failing to keep up with fickleconsumer tastes, which are always following the latest hardwareinnovations.

That same mistake felled much larger companies than BlackBerry,including Nokia and Motorola, which each were sold for a fractionof their once-mighty worth, to Microsoft and Google, respectively.

When it was still called Research in Motion, BlackBerry failed to seethe key change in its market: the emergence of software capability -- trumping hardware features -- as the driver of consumer handheld

purchases.

5-27



5-27

• You snooze, you lose, 16/8/2013

• As Beyoncé reportedly scraps 50 tracks in advance of her long-awaited fifth album, Greg Kot asks: what happens to artists whotake too long making records?

• The music industry isn‟t a friend to artists who wait. In the „60sand „70s, artists typically recorded an album – and sometimestwo or even three – a year, and toured relentlessly. Now, withtrends arriving and disappearing in record time, bands that don‟tkeep the pipeline flooded with their genius are quickly forgotten.

• Beyoncé is unlikely to be forgotten by anyone anytime soon –

she‟s a true multimedia celebrity in addition to being a recordingartist.

• But the longer she‟s away, the more likely she‟ll looklike she‟s chasing trends rather than shaping them.

5) Speed

5-28



5-28

Big data retailing offers potential for innovation

• Traditional retailers are fighting back against theAmazon onslaught, wielding big data weapons of theirown, argues Mr Selinger.

• His company, RichRelevance specialises in taking the

masses of data that retailers collect on their customersand using it to personalise their shopping experiences.

• Its software runs all this data through the open source

framework, Apache Hadoop, then applies 125 differentalgorithms that try to predict what products thecustomer is most likely to buy at that exact moment,based on their previous and current behaviour.

•

This is al l done in 20 m il l iseconds , he says.

Example of Unique Feature in ICT

5-29Big Data cont



5-29Big Data cont…

• Each of the algorithms is scored on the accuracy andinfluencing ability of its predictions, and these scores

affect what images and offers are presented tocustomers the next time they visit the retailer's websiteor another site, such as Pinterest.

•

"By helping consumers find products that are mostrelevant to them we drive up sales 3% to 10%," he says

• And it's not just website content that can be tailored tocustomers' preferences and buying behaviour

• "Even the content of marketing emails can be changedright up to the point we click on them," he says.

• It seems the brave new world of personalised shoppingmay be with us whether we like it or not.

• What examples wou ld you ci te?

Product Development and Entrepreneurship-Overview

Documents

Transcript of Product Development and Entrepreneurship-Overview