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Projection of achievable sales revenue, often based on historical sales data, analysis of market surveys and trends, and salespersons’ estimates. Also called sales budget, it forms the basis of a business plan because the level of sales revenue affects many aspects of commercialization of a new product.
A tool for envisioning alternate futures so that a strategy can be formulated to respond to future opportunities and challenges. Also known as “What-If” Analysis.
Refers to uncontrolled changes in the scope of a project. This phenomenon can occur when the scope of a project is not properly defined, documented, or controlled. It is generally considered a negative occurrence with significant effects on the triple constraint of budget, schedule, and quality.
An evaluation mechanism, normally in the form of a questionnaire, that specifies success criteria that project stakeholders will use to rank and prioritize new product projects to satisfy innovation strategy requirements. Often included in portfolio management and especially useful for innovation programs in the fuzzy front end where financial metrics are not yet available.
Market research that has already compiled and organized. Examples of secondary information include reports and studies by government agencies, trade associations or other businesses within your industry.
Services differ from manufacture products in several ways but are often linked to new product development innovation.
The length of time it takes to develop a new product from an early initial idea for a new product to initial market sales. Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within a company.
An informal role in a product development project, usually performed by a higher-ranking person in the firm who is not directly involved in the project but who is ready to extend a helping hand, if needed, or provide a barrier to interference by others.
A stakeholder is any person or entity involved with or affected by a project.
Warehousing item that is unique because of some characteristic (such as brand, size, color, model) and must be stored and accounted for separate from other items. Each SKU is assigned a unique identification number (inventory or stock number). New Product Development projects often add SKUs to existing product inventories by product line extensions or by commercializing new products in the market.
Strategy encompasses the corporate mission, vision, and values as well as the firm’s positioning of technology, markets, and new products.
The process that ties new product strategy to new product portfolio planning.
Balancing the Portfolio of development projects along one or more of many dimensions such as focus vs. diversification, short vs. long term, high vs. low risk, extending platforms vs. development of new platforms.
A person with direct knowledge of what is done in the job, what knowledge, skills, abilities and other characteristics are required, and the general background of persons who are able to do the job successfully. These may include those currently doing the job, recent incumbents, those who supervise others doing the job, and other acknowledged experts.
A cost that has been incurred and cannot be reversed. Also referred to as “stranded cost.”
Surveys are used in market research and are comprised of a pre-determined set of questions and answers, asked of a specific set of respondents.
Originally termed by Clayton Christensen in The Innovator’s Dilemma. In contrast to disruptive innovation, sustaining innovations do not have a drastic effect on the market or product uses. Sustaining technologies may be transformational or continuous (incremental improvements). Learn more in a one credit course Disruptive Innovation at Simple-PDH.
“Strengths, Weaknesses, Opportunities, and Threats” Analysis. A SWOT analysis evaluates a company in terms of its advantages and disadvantages versus competitors, customer requirements, and market/economic environmental conditions.
A group of persons who participate in the new product development project. Frequently each team member represents a function, department, or specialty. Together they represent the full set of capabilities needed to effectively and efficiently complete the project.
The person leading the new product development team. Responsible for ensuring that milestones and deliverables are achieved, but may not have any direct authority over project participants.
A graphic representation of technology evolution or technology plans mapped against time. It is used to guide new technology development for or technology selection in developing new products.
A temporary team is a group of workers who are assembled for a short time to accomplish a specific task or set of tasks.
Theory of Constraints, or TOC, is a management philosophy indicating that at any point in time, any complex system will have constraints, or bottlenecks, that limit the system’s ability. TOC is credited to Eli Goldratt and involves a 5-step process to identify the bottlenecks or constraints and to work to improve all other system components that impact the constraint.
Time management is the act or process of planning and exercising conscious control over the amount of time spent on specific activities, especially to increase effectiveness, efficiency or productivity.
The length of time it takes to develop a new product from an early initial idea for a new product to initial market sales. Precise definitions of the start and end point vary from one company to another, and may vary from one project to another within the company.
Starts with estimating and budgeting of revenues and other income first. The budget is then completed with expenses. Called top-down since it resembles the top portion of an income statement (see financial statements). Contrast with bottom-up budgeting.
A type of study that measures users’ utility scales for various attributes of a given product category. Given the determinant attributes, and the utility scale for each, one can assemble the “perfect product”, putting in an optimized set of attributes that yields in total the greatest value to the marketplace. Sometimes called “conjoint analysis.”
The combined constraints of meeting schedules and project deadlines, staying within a prescribed budget, and meeting the quality and performance specifications for a project.
Value capture, also known as customer surplus, is the difference between the perceived value a customer receives from the benefits of a product or service and the price paid.
Value creation is the firm’s view, known as producer’s surplus, and is the difference between the selling price of a good and the cost of resources to prepare the goods for sale.
Any principle to which a person or company adheres with some degree of emotion. It is one of the elements that enter into formulating a strategy.
A short, clear, and simple statement of how and on what dimensions a product concept will deliver value to prospective customers. The essence of “value” is embedded in the tradeoff between the benefits a customer receives from a new product and the price a customer pays for it.
Periodic charges incurred by a company that are in sync with, or change more or less proportionally to, production output levels or sales revenues.
Allows managers to see whether sales, production, and manufacturing costs are higher or lower than planned and why actual sales, production, and costs differ from the budget or plan.
A venture team is a highly coordinated, co-located team that is used to develop new-to-the-world technologies and markets.
A firm’s operation across multiple levels of the value chain. In the early 1900s, Ford Motor Company was extremely vertically integrated, as it owned forests and operated logging and wood finishing and glass-making businesses. They made all of the components that went into automobiles, as well as most of the raw materials used in those components.
Dispersed teams that communicate and work primarily electronically may be called virtual teams.
An act of imagining, guided by both foresight and informed discernment, that reveals the possibilities as well as the practical limits in new product development. It depicts the most desirable, future state of a product or organization.
A process for eliciting needs from consumers that uses structured in-depth interviews to lead interviewees through a series of situations in which they have experienced and found solutions to the set of problems being investigated. Needs are obtained through indirect questioning by coming to understand how the consumers found ways to meet their needs, and, more important, why they chose the particular solutions they found.
Voice of Technology (VOT) is a reporting protocol for Research and Development (R&D) staff to analyze new and emerging technologies for senior management. For more details see M. Bruce Lyne’s article in Research Technology Management (November-December 2003).
A work breakdown structure (WBS) in project management and systems engineering, is a tool used to define and group a project’s discrete work elements in a way that helps organize and define the total work scope of the project.
WBS elements may be products, data, services, or a combination of these. WBS provides the necessary framework for detailed cost estimating and control along with providing guidance for schedule development and control. Additionally, the WBS is a dynamic tool and can be revised and updated as needed by the project or program manager.
Method for creating a budget that assumes incremental changes to a budget already existing for a prior period.
Method for creating a budget that starts with no funds for the period under consideration.