Managing New Product Definition in Highly Dynamic Environments
AbstractIn highly dynamic environments, characterized by changing customer preferences and uncertainty about competitive products, managing the development of a new product is a complex managerial task. The traditional practice, recommended in the literature, of reaching a sharp definition early in the new product development (NPD) process may not be optimal, desirable or even feasible in such dynamic situations. Under high uncertainty, forcing early finalization of specifications may result in a firm getting locked into an incorrect definition. Based on our study of NPD in the high technology industry, we present a model of an approach called real-time definition, in which a firm adapts its product definition process to the market and competitive environment. Uncertainty in the product definition is resolved through frequent, repeated interactions with customers and using a flexible development process. We find that early definition is optimal only in a limited set of situations. To maximize its anticipated profits, a firm should tune its definition process to the prevailing level of market uncertainty, the marginal value of information obtained from the customer during the NPD process, and its own risk-profile and internal development capabilities. Effects of competition on a firm's definition approach are also examined, and implications for managers of a NPD process are presented using a conceptual framework.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 44 (1998)
Issue (Month): 11-Part-2 (November)
New Product Development; Product Definition; Dynamic Environments;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Blazevic, Vera & Lievens, Annouk & Klein, Evelien, 2003. "Antecedents of project learning and time-to-market during new mobile service development," Open Access publications from Maastricht University urn:nbn:nl:ui:27-15458, Maastricht University.
- Lacourbe, Paul, 2012. "A model of product line design and introduction sequence with reservation utility," European Journal of Operational Research, Elsevier, vol. 220(2), pages 338-348.
- Zhang, Qingyu & Vonderembse, Mark A. & Cao, Mei, 2009. "Product concept and prototype flexibility in manufacturing: Implications for customer satisfaction," European Journal of Operational Research, Elsevier, vol. 194(1), pages 143-154, April.
- Andrea Fosfuri & Marco S. Giarratana & Esther Roca, 2010. "Community-based strategies in action: building and sustaining a product differentiation advantage," Business Economics Working Papers id-10-01, Universidad Carlos III, Instituto sobre Desarrollo Empresarial "Carmen Vidal Ballester".
- Thomas Gillier & Gérald Piat & Benoît Roussel & Patrick Truchot, 2009. "Portfolio Management Of Innovation Fields : Applying Ck Design Theory In Cross Industry Exploratory Partnership," Post-Print hal-00416790, HAL.
- Mouricou, Philippe & Garreau, Lionel, . "La fabrique de la stratégie dans un projet immobilier : Construire du sens sur la base de représentations visuelles," Open Access publications from UniversitÃ© Paris-Dauphine urn:hdl:123456789/6461, Université Paris-Dauphine.
- McKelvie, Alexander & Haynie, J. Michael & Gustavsson, Veronica, 2011. "Unpacking the uncertainty construct: Implications for entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 26(3), pages 273-292, May.
- Elmaghraby, Salah E., 2005. "On the fallacy of averages in project risk management," European Journal of Operational Research, Elsevier, vol. 165(2), pages 307-313, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.