■ The strategic agenda
It is essential that all organisations develop products. Product development
and innovation are the ‘life blood’ of any business. By definition, develop-
ment and innovation are strategic activities that shape the future. The cre-
ation of an acceptable product offering involves many strategic decisions.
For example, building on core competencies, matching resources to market
opportunity and co-ordinating activities across functional boundaries are
all accepted strategic activities which normally determine the success or
failure of our products. Given that many organisations now face difficult
commercial conditions – static/declining demand and intense competition –
innovation and product development should top the agenda of today’s
(and tomorrow’s) successful organisations. In essence, all organisations
must evolve or they will perish. Product development and innovation
allow organisations to evolve.
It is important to define ‘product’ in its broadest sense. What counts is
the total product offering – this provides benefits to the customer. Hence,
the process of product development involves not only innovation of the
core product, but innovation in areas such as support services and produc-
tion processes. Business cannot afford to view innovation in the narrow
sense of technical/scientific development, but rather as a management
process. Such a process focuses creative effort with the intention of devel-
oping products perceived as delivering superior benefits. Innovative pro-
jects require the right balance of creative, technical and managerial skills.
Blending these factors together fosters an organisational culture that
embraces innovation, product development and strategic success.
■ The nature of products and
product development
As stated above, products must be considered in terms of the total prod-
uct offering. Remember, the term ‘product’ covers goods, services, ideas
and information. In reality, most products are combinations of these
items. Service-based products tend to be intangible in nature. Above all,
products must meet needs and deliver benefits to the user.
Product development is a strategic necessity. In terms of product development, organisations
can modify, imitate or innovate. A rigorous NPD process is essential to avoid marketing failures.
Additionally, managers must address the concept of innovation across the entire organisation.