New Product Introduction (NPI) is a vital ingredient to the success of any company, large or small, says Oxford Innovation business coach Alan Street
If you are a new business you will have started your new venture with a clear idea about the product or service you are planning to offer. But at some point in time, as your business grows and develops, the product will become outdated, overtaken by competition or perhaps too costly to produce.
Also you may wish to expand your product range or enter new markets as part of your business development strategy. It is probable therefore that at some point you will have to consider refreshing the current product range or introducing new and additional products.
Whether your business is a micro- SME or a large multi-national corporation a robust process for identifying, developing and managing New Product Introduction (NPI) is vital. Good NPI process can significantly reduce the risks, costs and time associated with the development of new products.
An effective process for NPI consists of three essential components which can be likened to the key elements of a car. Direction – the car’s steering, Execution – the engine, and Supporting – the tyres and chassis.
Direction is primarily about developing a product strategy that is based on good understanding of your markets and your competitive position. It is vital to analyse the market segments you presently, or plan to, address and develop strategic options for each of these segments.
The two strategic options relevant to NPI are often referred to as ‘Product Development’ whereby new products are developed for existing markets and, the much riskier, ‘Diversification’ where new products are developed for new markets.
As part of this process it is worth developing a product road-map to record your product development and enhancement plans for the next few years.
Execution is the process by which your chosen and well defined new product concept is developed and successfully introduced to the market. Important tools here are milestone planning (defining clear goals and responsibilities), regular review and decision making process (ensuring that the project is on track and that the product still appropriate) and regular risk review. It is, of course, really important that the project plan includes the process by which the product will be introduced into the market place (launch and sales plans).
Supporting the overall process is about ensuring that the resources with the right skills are available for the development and being crystal clear as to responsibilities.
Remember that NPI is not just about brand new products and ideas. The process applies equally to product development and embellishments. You may start out with the ubiquitous widget which you sell in its basic form in just one colour. Eventually your market research tells you that you need to provide more functionality and additional colour options. These developments and their launch into the market need to be properly planned and managed in the same way as for a completely new product.
These principles apply equally to all companies from micro-SME to major PLC. Get them right – there are numerous excellent tools and techniques to help you – and you can dramatically reduce your NPI timescales and gain a significant competitive advantage over your competitors.
Tel: 0808 1680405