Product innovativeness and entry strategy: impact on cycle time and break-even time

Article Abstract:

The study looked into the relative impact of product innovation and entry strategy on cycle time and initial market performance of small companies. The study found that particularly for small high-tech manufacturing companies, new product development time, or cycle time, has become a critical competitive variable. In the study, cycle time was defined as the elapsed time from the beginning of idea generation when the company decided to develop a new product to the end of product launch when the product is commercially available and managed in a routine manner. Break-even time was defined as the elapsed time from the end of product launch when the product is commercially available to the start of making profit when cumulative product contribution has repaid the improvement and start-up investments. The study found that faster product development results in shorter break-even time and that companies are achieving shorter cycle time not by sacrificing product quality, but by keeping the technical content and innovativeness of the product simple. It was further determined that large firm size, market pioneering, and lower relative price improve a company's performance. Article discusses implications of the study's results for managers, directions for future research and other conclusions.

Planning, Business, Innovations, Business planning

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From experience Benchmarking new product development funding

Article Abstract:

Ameritech developed a benchmarking methodology as one element of a successful redesign and redirection of the new products organization at its Yellow Pages publishing unit. Nine factors or indicators were identified as data points for evaluating consolidated new product development budgets: product life cycle; level of technology in the industry; market position and corporate goals; development risk; state-of-the-art; distance from state-of-the art; rate of change in industry; critical mass; and research vs. development spending. The study determined that there was no single factor or indicator that will provide the appropriate level of funding for R&D or new product development within a corporation. Each of the factors were weighted against Ameritech's strategic direction and established the benchmarks accordingly. The consolidated budget projection did fall within the range established through this methodology and it fell closest to the individual factors that were most crucial strategically for Ameritech's product category. A substantial strategic revision of Ameritech's new products organization was proposed to the management team and a review of the company's strategic direction was conducted.

Wired Telecommunications Carriers, Telephone Communications, Telephone communications, exc. radio, Management Theory & Techniques, Telecommunications services industry, Telecommunications industry, Telephone services, Capital investments, AIT, Ameritech Corp.

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From experience: Capturing hard-won NPD lessons in checklists

Article Abstract:

The application of a solid New Product Development (NPD) process tends to be limited by the experiences of the user. It is important to realize that any errors or omissions that are made can lead to a highly flawed project. Because of this, checklists are important.

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