The PDMA Handbook of New Product Development

2.1. Introduction

New product strategy, discussed in this chapter, addresses the set of choices that developers make when building a plan of action for converting a new product concept into a product. The plan addresses issues that, when resolved, can create value for desirable customers and can capture value for the developers' business unit (BU). A skillfully assembled development strategy can play a major role in developing a new product concept. It includes choosing where the product will compete and explaining why it can win. It helps set direction and focuses the development work.

In 1997, the PDMA reported on the role of strategy in a comparative performance analysis of new product development (NPD) at 383 firms. Analysis showed the "Best" firms are more likely to start each NPD project with strategy-building than are the "Rest" of the firms. Best firms also needed only 3.5 ideas for success, compared with the 8.4 ideas needed by the Rest (Griffin, 1997:5).

A good strategy is a path of action that, when a company is developing a new product concept, answers the following question: "Are we doing the right things, when developing this idea, to create value for desirable customers and to capture value for our BU?" Designing and carrying out an effective strategy for developing a product concept isn't easy. It involves homework, common sense, and unbiased choices of the major benefits of die new product and understanding why potential customers value these benefits.

There are ...