Product innovation process
How can you structure the Product Innovation Process?
In a modern industrial company the design of a new product is not an isolated activity. Product design is embedded in a larger process, which is called ‘product development’. Product development includes the development of a new product together with the plans for its production, distribution and sales. This larger process is also called ‘new business development’. Product development in turn is part of the product innovation process. Product innovation encompasses all activities that precede the adoption of a new product in a market. Thus, innovation comprises the development as well as the realisation of a new product or production process by a company.
Which part does product design play in the product innovation process, and how can we systematically approach this process? In this chapter we shall outline two models of the product innovation process that provide answers to these questions.
Product Innovation according to Roozenburg and Eekels
A company that wants to innovate must know very well what it wants to achieve. It must produce fruitful ideas for innovation, work them out skilfully into comprehensive plans for action and then realise those plans tenaciously yet flexible. Figure 1 shows a very simple model of this process; in figure 2 this model is worked out in more detail.
The first part of the innovation process is called ‘product planning’. In this phase it is decided what product(s) will be developed and when. Product planning has two parts: ‘policy formulation’ and ‘idea finding’.
What a company wants to achieve is shown by its policy. Proclamation of goals only is not enough for a proper policy formulation. What are the strategies for fulfilling the goals? That is the complimentary part of the policy. In product development the product-market strategy (or ‘product-market scope’) lays down the kinds of products the company is going to apply itself to, now and in the future, and the markets it is going to attend. A proper crystallised policy is the basis for the next activity: ‘idea finding’. Before a product can be developed, someone has to come with the idea for it. In a new product idea two elements come together: a technical possibility and a market need. The discussion whether the development should be market-pull or technology-push is in this context less important; both elements are needed.
How does a company find new product ideas? Simply put, this comes to:
- Keeping informed about markets and consumer needs (external research, opportunities and threats).
- Investigating the strengths and weaknesses of the company (internal investigation).
- Getting inspired by those studies and generating new product ideas.
- Selecting the most promising product ideas and formulating them into an assignment for further development.
When searching for new product ideas it is wise not to search at random, but first to demarcate the areas in which you want to be active. These areas are called ‘search fields’. A search field is a strategic idea of future activities of a company, which is based on knowledge of external opportunities and awareness of internal capabilities (strengths). Idea finding has much in common with exploration. Its success depends on the activity itself, but also strongly on luck and chance. The product policy directs the idea-finding process and provides normative information for making choices in that process.
Promising ideas for new products must be worked out into detailed plans for the product, the production and the sale. This phase is here called ‘strict development’. The plans are developed with the new business idea, as point of departure and it is very important that the plans are properly attuned to one another. To that end the product development process must be arranged ‘concentrically’.
Concentric development means that at first all plans are worked out in outline, to be able to estimate the technical and commercial feasibility of the new business activity as a whole. Whenever a product idea survives the first round, the plans are further worked out in a second round, etc., until they are completed and fit one to another (see figure 3). Of course the number of rounds is arbitrary. Essential is that in each round all aspects of the new business activity (function, appearance, use, manufacturing, cost, environment, etc) are taken into consideration. Other names for this fundamental methodological principle are ‘integrated product development’, ‘simultaneous engineering’ and ‘concurrent engineering’.
By concentric development two important things are achieved. Concentric development prevents that more time and money is spent in the development of eventual ‘non-successful’ product ideas than necessary. Besides that, as concentric development stimulates the interaction between product design, production development and marketing planning, it raises the quality of the product and shortens the lead times.
In this phase the detailed plans out of the strict development phase are transformed into reality. This phase includes production, distribution, sales and the actual use of the product.
The model of the product innovation process in figure 2 shows how product design is embedded within the larger industrial innovation process. Product design is preceded by product planning activities that define the kind of products to design and it proceeds in interaction with production development and marketing planning. The development of a new product will be successful in so far as these activities are properly attuned.
Product Innovation Process according to Buijs
J. Buijs (see figure 4) introduced a four-stage innovation model based on the assumption that the product innovation process is similar to an (experiential) learning process (Buijs, 2003). Coming up with new products and services is the response of a company to its changing competitive environment. The four-stage product innovation model consists of:
- Strategy formulation (i.e. policy and strategy formulation).
- Design brief formulation (i.e. idea finding).
- Product development (i.e. strict development).
- Product launch and use (i.e. realisation).
From this point of departure Buijs and Valkenburg (2000, 2nd ed.) developed a more detailed model of the product innovation process consisting of 17 steps in a given order (see figure 5). This model puts more emphasis on the first phase of the product innovation process, the Strategy Formulation (or product planning). For the explanation of product innovation in relation to the corporation, its brands and the kind of new product the company should develop, a very detailed description of the first stage of the innovation model is presented.
The strategy formulation stage is subdivided into six activities:
- analysis of the present situation, which leads to the strategic situation of the company;
- internal analysis;
- external analysis;
- search area generation;
- search area evaluation; and
- search area selection.
Based on an analysis, the strategic situation of the company is formulated. The strategic need for innovation is made explicit by estimating the future corporate situation when no strategic changes are made. During the internal analysis, the strategic strengths, the core competences are defined. In the external analysis, the competitive environment is analysed and the opportunities and threats are made explicit. Search areas are strategic ideas for innovation and potential new business opportunities. A search area is a combination of a strategic strength and an external opportunity. During search area evaluation, the strategic innovation ideas are checked with the outside world by interviewing experts, looking at patents, observing potential clients/users, etc. In search area selection, a definite choice is made. The selected search areas form the starting point for the next phase: design brief formulation.
Circular Chaos: the Delft Innovation Model
Inspired by the circular four-stage innovation model, the linear and sequential 17-step model was adapted (see figure 6). Product innovation processes are intended to help companies design and introduce new products, which customers are willing to buy and use. Therefore, in product use the innovation process ends, but at the same time this forms the starting point of a new product innovation process. Visualizing the innovation process as a circular model suggests that there is neither beginning nor end, which is true in the sense that introducing a new product on the market will lead to reactions from competitors. These in turn will cause the original innovating company to start the next new product innovation process in order to regain its competitive advantage.
References and Further Reading
- Buijs, J. and Valkenburg, R. (2000, 2nd ed.) Integrale Productontwikkeling, Utrecht: Lemma.
- Buijs, J. and Valkenburg, R. (2005, 3rd ed.) Integrale Productontwikkeling, Utrecht: Lemma.
- Buijs, J., (2003) ‘Modelling Product Innovation Processes: from Linear Logic to Circular Chaos’, Creativity and Innovation Management, Vol. 12 (2), pp. 766-93.
- Roozenburg, N. and Eekels, J. (1998, 2nd ed.) Productontwerpen: Structuur en Methoden, Utrecht: Lemma, pp. 11-32