ANALYZING PRODUCT/SERVICE RISKS AND BENEFITS CHAPTER Seven

The New Product Development Success Curve Based on the research of Greg A. Stevens and james Burley in “Piloting the Rocket of Radical Innovation,” Research Technology Management, 46(2):16-26.

From Idea to Market

New Product Checklist

New Product Development: Implications of Resource Shortfalls Poor New Product Performance

Product/Service Development Strategies to consider when competing effectively in product development: Design products right the first time Shorten the time to market Outsource some product developments tasks RBV framework Manufacturing, or Service

Resource Based View Not just addressing -- What a Firm Does – But HOW the firm is doing what it does Capabilities Represent - the firm’s capacity or ability to integrate individual firm resources to achieve a desired objective. Criteria in determining the degree to which a Firm’s Capabilities are Strategically Valuable Rare Valuable Inimitable Non Subtitutable

Resource Based View Valuable: Capabilities that either help a firm to exploit opportunities to create value for customers or to neutralize threats in the environment Rare: Capabilities that are possessed by few, if any, current or potential competitors Inimitable: Capabilities that other firms cannot develop easily, usually due to unique historical conditions, causal ambiguity or social complexity Non-substitutable: Capabilities that do not have strategic equivalents, such as firm-specific knowledge

Implication of a Firm’s Capability/ies An Insight into Sustainabilty Vaulable Rare Costly to Imitate Nonsub-stitutable Performance Implicaitons

Implication of a Firm’s Capability/ies An Insight into Sustainabilty Vaulable Rare Costly to Imitate Nonsub-stitutable Performance Implicaitons NO Below Average Returns

Implication of a Firm’s Capability/ies An Insight into Sustainabilty Vaulable Rare Costly to Imitate Nonsub-stitutable Performance Implicaitons NO Below Average Returns YES YES/NO Average Returns ~ Aver./Above Average Returns

Implication of a Firm’s Capability/ies An Insight into Sustainabilty Vaulable Rare Costly to Imitate Nonsub-stitutable Performance Implicaitons NO Below Average Returns YES YES/NO Average Returns ~ Aver./Above Average Returns Above Average Returns

Technological Development Human Resource Management Value Chain Support Activities Primary Activities Technological Development Human Resource Management Firm Infrastructure Procurement Inbound Logistics Operations Outbound Marketing & Sales Service MARGIN

Outsourcing Product Development Areas suitable for outsourcing that require engineering analysis, design and expertise: Component design Materials specifications Machinery to process Ergonomic design Packaging design Assembly drawings & specifications Parts and material sources (suppliers) Operator’s and owner’s manuals

Value Chains are part of a Total Value System Supplier Value Chain Firm Value Chain Channel Value Chain Buyer Value Chain Upstream Value Each firm must eventually find a way to become a part of some buyer’s value chain Perform valuable activities that complement the firm’s activities Ultimate basis for differentiation is the ability to play a role in a buyer’s value chain This creates VALUE!! Value chains vary for firms in an industry, reflecting each firm’s unique qualities: History Strategy Success at Implementation 73

Intellectual Property Definition of Intellectual Property Rights: The group of legal rights associated with patents, trademarks, copyrights, and trade secrets.

Patents Patents are the primary means of protecting an original invention. Types of Patents Utility: Protect functional part of machines/processes Design: Protect new, original ornamental designs for manufactured articles Business Methods: Protect fundamentally different ways of doing business whereby the embedded process must produce a useful, tangible, and concrete result. Invention must fit into one of the five classes established by congress Machine or something moving parts or circuitry Process or method for producing a useful and tangible result Article of manufacture Composition of matter A new use or improvement for one the above that does not infringe on the patents associated with them The invention must have utility (it must be useful) The invention must not contain prior art; that is it must ve new or novel in some important way The invention must be obvious to someone with ordinary skills in the field

The Patent Process Process: Patent Infringement File a disclosure document File a provisional patent File a non provisional patent application Patent Infringement Patents give the holder right to enforce the patent Defense costs in time and money make it difficult for small business to enforce.

Foreign Patents Patent rights granted to an individual extend only to the borders of the United States. Every country has different laws regarding intellectual property. Hire a knowledgeable intellectual-property attorney! Key Question: Legal Infrastructure of country of interest

Trademarks Trademark: It has a longer life than a patent. A symbol, logo, word, sound, color, design, or other device that is used to identify a business or a product in commerce. It has a longer life than a patent. It grants a business exclusive rights to a trademark for as long at it is actively using it. ® Registered trademark ™ Intent to use application filed for product SM Intent to use application filed for services

© Copyrights Copyright: The Digital Millennium Copyright Act 1998 protects the form of the original works of authors, composers, screenwriters, and computer programmers does not protect the idea itself lasts for the life of the holder + 70 years The Digital Millennium Copyright Act 1998 Prohibits the falsification, alteration, or removal of copyright management data on digital copies The special case of software Federal copyright protection covers published software

Trade Secrets A trade secret consists of a formula, device, idea, process, pattern, or compilation of information that gives the owner a competitive advantage in the marketplace, a novel idea that is not common knowledge and is kept in a confidential state. A trade secret is not protected by federal law

END

Patents Patents are the primary means of protecting an original invention. Designed by Thomas Jefferson in 1790 to provide a brief legal monopoly to give the inventor an opportunity to get the invention into the market and recoup development costs before competitors entered the market. USPTO criteria for patentability

What Makes a Service or Product Costly to Imitate? Unique Historical Conditions An unusual evolutionary pattern of growth may contribute to the development of competencies in a manner that is unique to those particular circumstances Causal Ambiguity This occurs when competitors are unable to detect how a firm uses its competencies as a foundation for competitive advantage Social Complexity Occurs when the firm’s capabilities are the result of complex social phenomena, such as interpersonal relationships, trust and friendships among managers or a firm’s reputation with suppliers and customers 41

Copyrights (continued) The Digital Millennium Copyright Act 1998 Prohibits the falsification, alteration, or removal of copyright management data on digital copies The special case of software Federal copyright protection covers published software Obtaining copyright protection Federal protection is available if the work is in a fixed and tangible form; contains a copyright notice and year, and the full name of the responsible person. International protection The Berne Convention gives protection for the life of the author +50 years

Registering a Trademark Methods: If the mark already is in use If the mark has not yet been in use If the international agreement permits Not trademarkable: Anything immoral or deceptive Anything that uses official symbols of the US or any state/municipality such as the flag Anything that uses a person’s name or likeness without permission ® ™ SM

Trademark Infringement, Counterfeiting, and Dilution Infringement- A mark that is likely to cause confusion with a trademark already existing in the marketplace Counterfeiting- The deliberate copying of a mark Dilution- The value of the mark is substantially reduced through competition or through the likelihood of confusion from another mark.