Success Factors of New Product Development (Essay Sample)
the task was about explaining the success factors of new product development based on provided journal articles.source..
Success Factors of New Product Development
Success Factors of New Product Development
In the article “Critical Success Factors in New Product Development,” Cengiz, Ayyildiz, and Kirkbir (2005) argue that given the rapid market and technological changes in the past decade, new product development (NPD) has become critical to organizations’ competitive success. In the same vein, in the article “Critical Success Factors of New Product Development: Evidence from Select Cases,” Dwivedi, Karim, and Starešinić (2021) assert that rapid market changes have prompted innovation and intensified competitive behavior, thus forcing firms to invest in NPD to increase market share, profitability, and success. Nevertheless, NPD faces the risk of failure, forcing organizations to invest in research and further efforts to eliminate risk. In both articles, the authors agree that an in-depth understanding of the critical success factors of NPD is essential to guarantee success in the market.
First, top management support and commitment are vital for NPD success. The top management is responsible for creating a positive organizational culture and formulating the organization’s mission, vision, and strategies to guide the NPD process. In addition, top management must ensure effective resource allocation, eliminate power struggles within teams, and resolve conflicts that emerge in the process. Therefore, without top management support and commitment, NPD would be doomed for failure. Organizational leaders should be actively involved in the NPD process by providing direction and guidance and making effective decisions that help NPD teams work efficiently and achieve set goals.
Second, NPD would never succeed without market research. Organizations must understand their customers’ needs, competitors’ moves, and emerging trends to develop new products (Cengiz et al., 2005). The competitive environment significantly influences organizational success. According to Dwivedi et al. (2021), when companies focus on the changes in consumers' behavior and new market requirements, they gain the first-mover advantage. This aspect enables them to counter their competition. Therefore, organizations' marketing teams should conduct intensive market research to facilitate the development of new products that respond to the new market requirements.
Third, NPD success depends on the creation and involvement of cross-functional teams. Sanchez and Perez's (2003) study supports this idea, noting that cross-functional teams are associated with increased innovation and higher NPD success rates. Cengiz et al. (2005) posit that NPD teams should feature diversity and comprise members from different organizational departments to facilitate diverse ideas and effective decision-making. Similarly, Dwivedi et al. (2021) state that cross-functional teams possess a vast range of entrepreneurial skills which improve process performance and goal achievement. Overall, NPD teams determine NPD success; hence, creating cross-functional teams is crucial.
Fourth, NPD must feature an effectively structured process for success achievement. The NPD process should follow through five critical stages: testing the concept, creating a prototype, pretesting the market, actual market test, and the product launch. These steps help organizations determine how consumers will respond to the new product and what improvement they must make to meet new market requirements. Companies that skip several stages in their NPD processes would likely encounter failure. However, Cooper and Kleinschmidt (1995) note that NPD processes should be flexible due to competitive pressure and shorter product life cycles. Overall, an effective NPD process enhances forecast accuracy, thus increasing the chances of product success upon introduction to the market.
Fifth, successful NPD requires knowledge-sharing and effective communication between management and NPD teams. Knowledge-sharing entails gathering and transferring information to those who demand it. It significantly helps in formulating new product strategies, strengthening teams and management, and achieving set goals. Open communication is also associated with NPD success. Organizations should establish open communication channels that encourage transparency and information-sharing, thus ensuring that everyone is updated on the NPD process. Communication fosters progress evaluation, which helps in improving NPD success.
Sixth, successful NPD must incorporate an effective NPD strategy that aligns with NPD process activities. NPD strategy formulation depends on the organization’s goals, objectives, resources, capabilities, previous performances, and organizational environment. The organizational decision-makers must ensure that the formulated NPD strategy aligns with both long-term and short-term organizational goals. This way, it will guide the NPD teams in taking the necessary steps to ensure NPD success and achieve the desired outcomes. Without an effective strategy, team members would lack a sense of direction, thus jeopardizing NPD success.
Seventh, organizations must leverage technology and encourage innovation for NPD success. Organizations have to embrace new technology to overcome competition by developing superior quality products in the modern, rapidly evolving business world. One of the primary reasons for NPD is meeting new market requirements; the
- Sales Forecast for the Vintage RestaurantDescription: This report analysis examines the current and future sales data for The Vintage Restaurant. The sales were analyzed using a dummy variable approach, and forecasts arrived through various calculations. ...1 page/≈275 words| No Sources | APA | Business & Marketing | Essay |
- Impacts of Pandemic on Consumer BehaviorDescription: The pandemic outbreaks like Influenza and Covid-19 have affected the social and economic lifestyles of the people in the global setting. Due to the high risks of spreading, governments have come up with various restrictions that have resulted in a change in consumer behaviors and patterns....1 page/≈275 words| 1 Source | APA | Business & Marketing | Essay |
- The Effects of Brexit on the UKDescription: Brexit stands for "British Exit," which means the United Kingdom's will to leave the European Union (EU), which happened in 2016. During the vote, the outcomes roiled the world economy and exceeded most experts' predictions (Giles, 2018)....2 pages/≈550 words| 4 Sources | APA | Business & Marketing | Essay |