There are many factors can pertain and affect an industry’s success, including competitors, customers, and suppliers. One of the most effective tools to analyze these factors is Michael Porter’s Five Forces in which he mentioned the threat of new entrants and the threat of substitute products. But there will be no threat if a company can design and create a new product that no competitor can imitate or substitute.
The article by Vijayan and Suresh clearly pointed out the variables that affect new product’s success. New product, according to Vijayan and Suresh, is anything for sale with the quality, the cost at the right time. But in order not to have losses or failure from new product, it takes amount of time for all ideas, labor, techniques and research. At the end, the percentage of success is just about “60 % to 70 %”. According to this article, there are twenty four factors affect new product success that categorized under “product, process, strategy, and market place characteristics.” In order to make a product come outs to the market successfully, that product must “perform a new function”, “new market”, “reach more buyer with low cost”, or “marketing components offered separately.”
Product characteristics include “superiority/ differentiation over the competitors, customers’ desire/need, perceived price/technological sophistication, uniqueness.” About the firm strategy, marketing and technological synergy are the best skill for new product’s success. In addition, “human resources, R&D resources and the timing of marketplace” are not less important. In the process characteristics, the authors pressed on manufacturing cycle’s time with proficient task, labor, techniques and skill. This characteristic plays a key role in not only a new product but also in the industry’s success- the rivalry among firm. The final characteristic is market, including “response to a new market through likelihood and degree, market potential.”
Besides, in this article, the authors did some surveys and findings through giving each company, for example, “Company A with a successful product and Company B- consumer durables with a successful product”. They use “r value- the corrected mean correlation that 10 factors are dominant drivers of new product success (mean r > 40).” After comparing those data between two companies, they realized there are some differences in the “r value” because of differences of managers and consumers; but “the range of this survey is really close which indicates the influences of the independent variables on the dependent variable new product success.”
By pointing out the characteristics of new product and giving small survey about two companies, the authors stressed the importance of new product. New product decides the success of an industry in which every single element plays its own key role. A manager should know how to apply and combine these elements perfectly to pertain success.
I agree that new products can be beneficial for a company, especially in todays growing society with technology booming. I also think that companies need to be aware that new products can have a negative affect on the company as well.
ReplyDeleteThat is true. Product decides company's success. That is the reason why each company has to choose really carefully which product should be manufactured,launched and how to launch. For example, the GLO-BUS practice 1 we have been working on, it takes time to decide the quality and performance, marketing areas with suitable promotion, and how much we should bonus for good employees...All of them have to be done by non-stop working brains.
DeleteI think an interesting example of this theory might be smart phones. I feel that manufactures, other than Apple, are finding a hard time releasing a new product with the right characteristics to effectively compete.
ReplyDeleteYes. It is. In addition, the manufacturer has to find the way to design smart phone in order NOT to be imitated by other rival companies.
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