2052 MGT

STRATEGIC THINKING AND INNOVATION

MODULE 2

(1)DEVELOPING NEW
PRODUCTS
(2) NOTES ON GLOBALIZATION
Lecturer: Dr Alan Burton-Jones
Email: alan@burton-jones.com
Tel: 07 3255 1772
LEARNING OBJECTIVES OF
PART 1
•To understand the evolution of the new
product development process
•To be aware of leading models of
product development including the stage
gate process
•To appreciate the relevance of different
organizational structures for facilitating
product development
• To gain a basic appreciation of the role
of the project leader in new product
development
Part 1:
Developing New
Products
 EVOLUTION OF THE NEW
PRODUCT DEVELOPMENT
PROCESS
Phased project planning (NASA, 1960’s)
B. Preliminary analysis
C. Definition
D. Design
E. Operation
Product planning and development process (Booz
Allen Hamilton 1982)
7. Development of new product development strategy
8. Idea generation
9. Screening and evaluation
10.Business analysis
11.Development
12.Testing
13.Commercialization
 FIVE GENERATIONS OF NEW
PRODUCT DEVELOPMENT
MODELS
Generati Model type Model characteristics
on
First Technology Simple linear sequential: R & D focus
push
Second Needs pull Simple linear sequential: market
demand focus
Third Coupling Sequential with feedback loops: R&D
and marketing more in balance

Fourth Integrated Parallel development with integrated

development teams: strong upstream
supplier links; close coupling with
leading edge customers; R&D –
manufacturing integration; joint
Fifth Systems ventures
Fully integrated parallel development;
integrated use of expert systems; strong customer
and links; horizontal links; increased focus
networking on quality
 CULTURAL FACTORS IN THE
DEVELOPMENT PROCESS
3 micro cultures of innovation ( Zien and
Buckler 1997)
• The fuzzy front end: experimental and
chaotic; requires high tolerance for ambiguity
and uncertainty
• The product development process:
disciplined and focused on quantitative goals
and measures; high commitment to goal;
schedule oriented; not receptive to new
ideas; teamwork important
• Market operations: predictability and order;
strong financial orientation; relies on
 THE STAGE-GATE PROCESS

1. 2.
2. 3. 4. Testing 5. Full
Preliminar Build
Build Development & productio
y busine
busine validation n and
investigati ss
ss case
case market
on launch
Stag G Stag G Stag Gate Stag Gate Stag
e1 ate e2 ate e3 4 e4 5 e5
2 3

2. 3. 4. Post 5.
Second Decisio develo Testing
screen n on pment &
busine review validatio
G
ate 1. ss case n Post
1 Initial implementatio
screen n review

Ideation
The Stage -Gate New Product Process by Robert G.
Cooper
 THIRD GENERATION NEW
PRODUCT DEVELOPMENT
PROCESS
Cooper’s four ‘F’s
Development process should be:
3.Fluid: fluid and adaptable with overlapping
and fluid stages
4.Fuzzy gates: conditional ‘go’ decisions
5.Focused; build on prioritization methods
that look at entire portfolio of products
and focus resources on the best bets
6.Flexible: not a rigid stage-and-gate
system; each project unique and has own
routing
 PRODUCT DEVELOPMENT AND
ORGANIZATIONAL STRUCTURE
Type How it works Appropriate for
Functional Project planned Improvement to existing products; new low innovation
organization and executed in products; sequential processing; fosters deep
a functional specialization
structure

Independen Self contained Large projects justifying full time use of expert from
t project group; project different functions; suitable for new solutions or
organization manager totally products; suitable for firms in dynamic markets
responsible; co-
located team
Matrix Decision making Large complex projects requiring simultaneous efforts
organization rests with from multiple experts in different disciplines
project team;
project manager
negotiates with
heads of
functions for
resources; high
demands on
social and
political skills of
project manager
 THE DEVELOPMENT FUNNEL
Capabilities
strategy:
Core competencies
Capabilities Technology base/stage
Assessment cycle
and Technology integration
Forecasting

Development Project Project Post-project

Business learning and
goals & portfolio Mgt.
strategy objectives plannin and improvement
g executi
on
Market
Assessment
and
Forecasting Product/market
strategy:
New versus existing
markets
Derivative or new
product/concept
Financial contribution
 TYPES OF PRODUCTS AND
PROJECT INTEGRATORS
High Component driven Complex products
products
e.g. automobiles
e.g. machine tools
Manager= integrator?
Engineer=Integrator?
Coordination
difficulty of
internal product Simple products Interface –driven
structure products
e.g. packaged goods
e.g. consumer
Marketing type
electronics
product
Industrial designer=
Manager = integrator
Low integrator?

Low Coordination difficulty of High

product –user interface
Part 2: Notes on
Globalization
LEARNING OBJECTIVES OF
PART 2
•To understand what globalization means
and key factors supporting and
constraining organizations’ global
development
• To appreciate the factors influencing
decisions to operate R& D on a global or
local basis and ways to manage the
processes involved
• To be aware of human and cultural
factors in international business
operations
•To understand issues relating to global
branding
 GLOBAL OR INTERNATIONAL?
• Some commentators argue that world markets are
becoming increasingly similar making it unnecessary to
localize the marketing mix
• Others take the view that while the world is moving towards
global markets, cultural and economic differences among
regions and nations limit globalization of consumer tastes
and preferences
• Trade barriers and differences in product and technical
standards in different countries and regions limit firms’
ability to sell a standardized product to a global market but
trade barriers are progressively falling and global standards
are increasingly prevalent across product groups
• Globalization is probably best viewed on three different
levels:
– economic level : gradual moves to trade liberalization
worldwide
– organizational level: globalization varies by industry e.g.
globally relevant resources plus financial and
professional services and the high technology sector are
almost completely global whereas some more traditional
 GLOBAL OR LOCAL R&D? KEY
FACTORS TO CONSIDER
• Degree of innovation
• Importance of speed to market
• Specificity of market knowledge
• Product uniformity across markets
• Ned for economies of scale
• Benefits of close R&D-Marketing
collaboration
• Cultural issues e.g. ‘not invented here’
syndrome
• Benefits of having different organizational
APPROACH TO MANAGING GLOBAL
R&D
Regional
Market
Autonomous Network of regional
regional R&D R&D centers
centers e.g. supported by some
Unilever, central R&D e.g.
Citibank, GM DuPont, 3M
Single,
Primary focus Central R&D
center
Network of
Autonomous technology R&D
technology R&D centers with central
centers e.g. IBM, coordination e.g.
Pfizer Microsoft , Nokia, HP,
Novartis Matsushita

Technology

Decentralized Centralized
 MANAGING PEOPLE IN A
GLOBAL CONTEXT
Structural Forms and Modes of
Internationalization Typical People issues

Simple export Limited issues

Establishment of sales subs. & foreign Whether to staff foreign operations

branches with Parent or Host country nationals
How to transfer technology and management
Establishment of foreign production knowledge to Host country nationals
Global product division How to staff and people management
functions in foreign subsidiaries
Transnational structure Issues with mixed use of host country parent
country and third country nationals
Cooperative ventures e.g. alliances, Issues of management progression;
IJVs staff loyalty

Adapted from De Cieri, H. and Dowling . J. (1997) ‘Strategic international human resource management: an Asia-Pacific
perspective’, Management International Review, 37/1:21-42
 GLOBAL SOCIOCULTURAL FORCES

Social structure: structure of social relationships : degree to

which the basic unit of social organization is the individual, as
opposed to the group and the degree to which a society is
stratified into classes or castes
National culture: the set of values and the norms of behavior
that are approved or sanctioned by a society e.g. Hofstede’s 5
dimensions :
– Power distance: e.g. between subordinates and superiors
– Uncertainty avoidance: e.g. how comfortable managers and
staff feel in unstructured situations –evidenced in extent of
rules-based compliance
– Individualism versus collectivism: e.g. degree to which
individuals are
integrated into groups for workplace bargaining, contracts
and incentives
– Masculinity versus femininity: assertiveness versus
interpersonal focus
 DIFFERENCES IN WORK-
RELATED VALUES BY COUNTRY

*
*

*
CONSIDERATIONS FOR GLOBAL
PRODUCT BRANDING
• Using brand symbols with universally accepted
meanings and /or positive connotations
• Whether to emphasize or deemphasize country
associations
• Be willing to modify strategy to accommodate cultural
differences across nations and regions
• When developing or delivering products be sensitive to
local social and ethical concerns
• Be aware of local legal requirements
• Balance economies of scale with benefits of local
presence
 EXERCISE: ASSOCIATIVE
EFFECTS OF BRAND SYMBOLS
For each of these words write down which you associate more with the IBM PC or more with the
Apple Mac :
• Effeminate, beautiful
• Virile , macho
• Business, science
• Arts , design
• Masculine
• Feminine
• Imaginative, associative
• Rational , linear
• Traditional , bland
• Cool, trendy
• Left brain
• Right brain
• Right wing , conservative
• Left wing, liberal
• Catholic
• Protestant

Adapted from Danesi, M. ( 2006) Brands : Abingdon, Oxford, Routledge

 SMALL GROUP EXERCISE:

Case study review: Walking

with Dinosaurs
1.Working in small groups discuss your
individual responses to the 4 questions
at the end of the case study (see page
41 in the textbook).
2. Review and consolidate the findings
from your individual responses.
3. A member of each group present the
findings of the group to the class and
lead a class discussion.
PREPARATION FOR NEXT WEEK

• Read Case Study (3) on Black and

Decker's Quattro (starts on p131 in
the textbook).
• Prepare a one page document
containing your responses to the 2
questions on page 137
• Come prepared to discuss your
responses in class.