Summary 1ZV50 Product Innovation Lecture Slides
Lecture 1: Introduction to product innovation & processes
The need for product innovation
• Long term survival of firms
• Ongoing/growing profit requires new products
Product innovation process is total operation by which a new
product is created and marketed.
It is not just a transformation from idea to launch of new product
in one step, but it is a complicated long process by which many things can go wrong. Many steps from
idea to final product
Why study product innovation process?
o When successful organizations do not follow the right process for creating and/or launching
new products, then that product will fail.
o Understanding product innovation process can help in managing the total operation by which
a new product is created and marketed.
Innovation is an uncertain and iterative process with many internal and external influencing factors
and many people involved. Many mistakes may be made!
Product innovation objectives:
Objective: to create value for customers by leveraging internal
learning and knowledge in order to have marketing and
economic success.
Stage-Gate type of processes: blueprint for structuring the process of product innovation
• Regular evaluation points (Go/No Go decisions)
• Guideline instead of step-by-step process
o Activities not sequential, but iterative and circular
o Flexible and adjustable to different product types and industries
• Completely multifunctional
Advantages of Stage-Gate
- Better planning/scheduling through short-
term goals
- Ensuring continuous reduction of uncertainty
- Managing uncertainty and risk by a step-wise
resource allocation
Stage-Gate models help in tackling the technical,
marketing and financial uncertainty involved in product innovation by providing a series of go/no go
gates in order to decide whether to continue with new product or not.
Lecture 2: Customer analysis & Idea generation
Product strategic planning is about defining the product innovation strategy (part 1 Fuzzy Front End).
,Innovation funnel: to select innovation opportunities
• Many potential new product ideas, but very few making it through
development process for launch
• Companies need to have process for how to fill innovation funnel
and which innovative opportunities/ideas should remain in funnel
Product innovation strategy: provides direction in managing flow in innovation tunnel
1. Product portfolio planning: how resources are spend to ensure steady stream of big new product
opportunities
- Helps in answering questions as which innovative opportunities/ideas should company invest
resources looking by gap in portfolio or by focusing on specific technology, market, trend
- Goals:
- Tools:
- Product portfolio tools in Action
o Gates Dominate Approach: Portfolio planning at each stage gate
▪ First part of gate: pass vs. kill decision where project is evaluated against MUST
MEET & SHOULD
MEET criteria
▪ Second part of
gate: prioritization -
> total project
score compared to
active projects &
projects on hold
(resources are
allocated)
o Portfolio Review Dominate Approach: every innovation project must compete against
the others
▪ All the projects are reviewed
after stage 1 (initial investigation
of innovation opportunities)
▪ The successive gates after gate 2 are
merely checkpoints
, 2. Product platform planning
- Addresses question which innovative opportunities can be further used to build a large
number of products that can serve different categories of customer by developing new
product platform or a new product for existing platform
- Platform: common basis in terms of e.g., design, development or production process, shared
among individual products in a product family; with 3 commonly used types:
1. Technological platforms (shared components), e.g. Volkswagen MQB platform
2. Category platforms (shared design or technology), e.g. Garmin Forerunner Family
3. Brand platforms (shared brand values), e.g. Dettol consists of soaps, hand and wash
Product Innovation Charter: agreeing on focus, goals and guidelines
• To chart the new product teams’ direction
• To set the teams’ goals and objectives
• To tell the teams how they will play the game
Fuzzy Front End is most difficult step, it consists of large number of opportunities.
Innovation opportunities can come variety of sources, but most important
dimension that needs to be addressed is satisfying customer needs.
Where do opportunities come from?
Emerging trends or new legislations, new technologies or markets, possibilities for product or process
improvements, threats by competition or a technology shift, new or unmet customer needs
Three basic types of opportunities
1. Need: why? Benefit for which the customer sees a need or desire
2. Form: what? The physical thing created/design/functioning
3. Technology: how? The source by which a need can be served / the form is to be attained
Information from customer analysis: to identify innovation opportunities/problems by answering
what, when, where and who questions related to customer needs
• Identifying problems and needs (what?) Problem opportunity
• Understanding motivations, values and root causes (why?) Requirement/constraint
• Understanding the problem / usage context (when, where?) Requirement/constraint
• Understanding the user characteristics (who?) Requirement/constraint
Different customer groups have very different sets of needs.
High-level vs. Low-level problems
- Root represents factors such as society, nature
- Leaf represents the problem at lowest level
- Sometimes companies need to address problem
both at lowest/highest level to meet customer needs
Some customer analysis methods
• Questionnaire survey (Quantitative): standardized questions regarding a certain topic
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