Opportunity Identification

Teaching materials to accompany:

Product Design and Development
Chapter 3
Karl T. Ulrich and Steven D. Eppinger
5th Edition, Irwin McGraw-Hill, 2012.
Many of the graphics shown here are from Innovation Tournaments by
Christian Terwiesch and Karl T. Ulrich (Harvard Business Press, 2009).

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 What is an opportunity?
• A new or latent customer need or want
• A new or better solution to an existing
need
• Often driven by new technologies

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 Drivers of innovation
• Customer pull
– Responding to customer needs
– Often new technology not required
• Technology push
– Developing technology and looking for
applications
– Often a solution looking for a problem
• These work together to drive innovation
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 Example: Uber
• Customer pull
– Personal mobility
– Taxis are unsatisfactory
• Technology push
– Cellular networks
– Cloud-based systems
– GPS
– Smartphones
• Innovation: Uber ride-sharing

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Opportunities Begin the Product Planning
and Product Development Processes
Opportunity Tournament

Exceptional Opportunities

Concept System-Level Detail Testing and Production

Planning
Development Design Design Refinement Ramp-Up

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 Pharmaceutical
Drug Development

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Hollywood Film Studios

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Automobile Concepts

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Where do opportunities come from?

Source:
Terwiesch and Ulrich survey of 524 managers in diverse
service and product industries, October 2006.
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 What drives the quality of the opportunities?

 Mean quality of the opportunity identification process.

 Variance in quality of the opportunity identification process.
 Number of “draws” from the opportunity identification process.
 Accuracy of discerning the best subset of opportunities generated.
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 Project Down selection:
The PD Process Funnel

Concept System-Level Detail Testing and Production

Planning Development Design Design Refinement Ramp-Up

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 Risk and reward

Reward

opportunities

Risk

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 Honda CB 750 (1969)

• This was Honda’s (and Japan’s) first large-

displacement motorcycle
• Original production run used sand cast engines to
reduce risk due to uncertain demand
• Production switched to more expensive die casting
when demand was established
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 Additional comments
• Opportunities should improve the customer’s
life somehow
– Convenience and ease of use
– Enjoyment and fun
– Status and image
• Customers don’t always know what they want
• Customers may use products and services in
unexpected ways
• Company personnel may be isolated from
customer needs, and be motivated by company
needs
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