The main reason good product ideas fail is that they get stuck between conception and development, often in processes that inhibit breakthrough innovation, according to a study by CGT magazine and Sopheon Corp.
Nearly 60 percent of the study’s respondents said that development resources were stretched too thin because of too many other projects under development. The goal with new product development should be to maximum value of the new product through the consideration of profitability, return on investment and acceptable risk.
Only one in five ideas were truly innovative, with the rest being product revisions, line extensions or promotional ideas and packaging changes, respondents said.
The average company gets 25 percent of its revenues from products introduced within the past five years. But only half of those products achieve profit goals because of a lack of product differentiation and poor market analysis, each a part of early-stage development.
Respondents came from global companies with annual revenues of $300 million or more. Markets included food, apparel, consumer goods and electronics.
A majority of respondents said there was a lack of coordination between short-term product development activities and long-term growth strategies.
These included:
- Information gaps that undercut new product investments
- Inhibitors of effective product portfolio management
- Deficiencies in post-launch performance measurement practices
It is important to consider the best balance of new product development and existing product production with resource demand and resource availability.
Please feel free to contact us to discuss any concerns you have with new product development!
