1.  Module: Slide Business Case Development www.aipmm.com Business Case Development

2.  Module: Slide Business Case Development www.aipmm.com R ELATED R EADINGS Cooper, R. G. (2011). Winning at new products: Creating value through innovation. Holland, MI: Basic Books Crawford, M. and DiBenedetto, A. (2010). New Products Management. Columbus, OH: Irwin-McGraw Hill Trias De Bes, F. & Kotler, P. (2011). Winning at innovation: The A-to-F model. London, UK: Palgrave Macmillan

3.  Module: Slide Business Case Development www.aipmm.com A GENDA Core Concepts Inputs Tasks Tools Deliverables Gate Meeting

4.  Module: Slide Business Case Development www.aipmm.com E XAMPLE : G ILLETT ’ S E XPANSION IN C ASSETTE T APES Situation: –Gillette Safety Razor Division (SRD) had to grow to meet financial goals in the early 1970’s –SRD had three strengths: Shaving technology and development High-volume manufacturing Marketing of mass-distributed goods –The blank cassette market was growing rapidly –Idea: Leverage organizational strengths to make cassettes and use Gillett name for credibility Test marketing was conducted from 1971-1972 –150 weekly radio ads in three large cities (Star, nd)

5.  Module: Slide Business Case Development www.aipmm.com E XAMPLE : G ILLETT ( CONTINUED ) Result: Gillett was unsuccessful in the cassette market (Star, nd) Many products fail because they can not fulfill the business case model

6.  Module: Slide Business Case Development www.aipmm.com P URPOSE OF A B USINESS C ASE What are the expressed needs of the market? What is the stated customer need? What is the job or problem that drives that need? Is the job or problem difficult enough to warrant searching for a solution that customers will pay for? (Cooper, 2011) A business case answers:

7.  Module: Slide Business Case Development www.aipmm.com B USINESS C ASE COMPONENTS 1.Product and project definition –What is the product –Who will use the the product 2.Project justification –Why should we make this investment –What are the business, financial, and risk considerations 3.Action plans –How we will accomplish development –Focus is on plans for next stage (Cooper, 2011)

8.  Module: Slide Business Case Development www.aipmm.com P RELIMINARY B USINESS C ASE This is an exploratory effort. Information for the business case should be based on fact and forecasting models, using qualitative and quantitative information. (Product Innovation Educators, 2011)

9.  Module: Slide Business Case Development www.aipmm.com P RELIMINARY B USINESS C ASE (PBC) - O BJECTIVES PBC is an overview of the concept, the concept size, and the financials. The objective is to determine if the idea/concept is viable from an organizational and financial standpoint. Specifically, the PBC provides insight into: 1.The idea or concept in relation to customer needs and current competition. Does the concept have a competitive distinction in the marketplace? 2.Market for the product including description, size, potential market share, and cannibalization issues. 3.Sales price, sales forecasts, revenues, expected margin, cost to produce, and economics. (Product Innovation Educators, 2011)

10.  Module: Slide Business Case Development www.aipmm.com I NPUTS All Managed Front End Documents to date Selected Projects (from Project Identification) Others? (AIMPP, 2011) Mission & Purpose VisionValues

11.  Module: Slide Business Case Development www.aipmm.com T ASKS Create Project Definition –Product concept –Scope of project –Relationship to existing products –Target market and competitors –Expected benefits and value proposition –Features and specifications –Product positioning and price (Cooper, 2011)

12.  Module: Slide Business Case Development www.aipmm.com T ASKS ( CONTINUED ) Create Project Justification –Business rationale –Strategic impact in core competency assessment –Financial analysis –Risk assessment (Cooper, 2011)

13.  Module: Slide Business Case Development www.aipmm.com T ASKS ( CONTINUED ) Create Action Plans –Recommended decision –Resource plan –Timeline

14.  Module: Slide Business Case Development www.aipmm.com T OOLS Market analysis Competitive analysis Voice of the customer analysis Technical assessment Financial assessment Risk assessment Sales Forecasts (Cooper,2011)

15.  Module: Slide Business Case Development www.aipmm.com D ELIVERABLES : PBC C ONTENTS –Product concept –Scope of project –Relationship to existing products –Target market and competitors –Expected benefits and value proposition –Features and specifications –Product positioning and price –Business rationale –Strategic impact in core competency assessment –Financial analysis –Risk assessment –Recommended decision –Resource plan –Timeline (Product Innovation Educators, 2011)

16.  Module: Slide Business Case Development www.aipmm.com D ECISION – G ATES Go, No-Go, Send Back, Refer, Park Gate Meetings are decision points that occur when the assigned gate team meets to review work that has been done. The Gate Team makes decisions about moving forward (or not) with a new product idea/concept. (AIPMM Glossary, 2011) Managed Front End New Product Development Go/ No-Go

17.  Module: Slide Business Case Development www.aipmm.com G ATE M EETINGS Gate Actions Review all information, ask questions, identify gaps, etc. Determine if additional information is needed Evaluate information against criteria using goals of the organization and a scorecard or checklist relevant to criteria set by the organization Make Decision: Go, No-Go, Send Back, Refer, Park Communicate decision to organization (Product Innovation Educators, 2011)

18.  Module: Slide Business Case Development www.aipmm.com R EVIEW : B USINESS C ASE COMPONENTS 1.Product and project definition –What the product is –Who the product is for 2.Project justification –Why should we make this investment –What are the business, financial, and risk considerations 3.Action plans –How we will accomplish development –Focus is on plans for next stage (Cooper, 2011)

19.  Module: Slide Business Case Development www.aipmm.com R EVIEW : PBC C ONTENTS –Product concept –Scope of project –Relationship to existing products –Target market and competitors –Expected benefits and value proposition –Features and specifications –Product positioning and price –Business rationale –Strategic impact in core competency assessment –Financial analysis –Risk assessment –Recommended decision –Resource plan –Timeline (Product Innovation Educators, 2011)

20.  Module: Slide Business Case Development www.aipmm.com Up Next…Conceive