Product Development
Module 3
Introduction
The development phase executes projects after idea generation and concept testing. It ensures that the proposed product matches customer requirements, organizational capabilities, and financial projections. Key focus areas during this phase include product design, product architecture, prototype development, and team management.
Product Design
Product design synthesizes technology and human needs into manufacturable products. Good design relies heavily on intuition, creativity, and understanding of the customer's situation. Effective designs are ergonomic and intuitive; poor designs are bulky, underpowered, or cluttered.
| Concept | Characteristics |
|---|---|
| Market-Driven Innovation | Originates from the market, follows current trends, addresses existing complaints. |
| Design-Driven Innovation | Creates new markets, pushes new meanings (not just new technology), creates trends. |
Apple's iTunes and iPod successfully provided a new meaning and purpose to music consumption rather than simply giving customers what they asked for.
Product Architecture
| Architecture Type | Definition & Characteristics | Examples | Pros & Cons |
|---|---|---|---|
| Modular | Every part is a separate module with standard components performing distinct functions. | Desktop computers, car gearboxes, tires. | + Flexibility, customization, upgrades. − Larger form factor. |
| Integral | Single parts perform multiple functions; components cannot be easily swapped. | Laptops, mobile phones. | + Compact, optimized, higher perceived quality. − Limited post-purchase modification. |
Six Types of Modularity
| Type | Description | Example |
|---|---|---|
| Component Sharing | Same component shared across different products. | Intel/AMD processors across laptop brands. |
| Component Swapping | Same components swapped across systems. | EV batteries, universal charging cables. |
| Cut to Fit | Components altered in length/size to fit needs. | Trousers with adjustable lengths. |
| Mixed | Mixing base materials to get custom choices. | Mixing base paints to create shades. |
| Bus | Foundational platform where modules attach. | Electronic circuit boards. |
| Sectional | Different sections fit into each other. | Lego toys. |
Design for Manufacturing
Design techniques aim to reduce timelines and ease execution by minimizing part complexity. Strategies include common parts across product lines, eliminating fasteners, minimizing final-assembly adjustments. Color-coding and specific fitments prevent assembly errors. Sometimes final assembly is left to the customer to simplify storage and transport (Ikea furniture).
Swatch: Adopted integral architecture for the watch movement (automated, sealed, low cost) while keeping the dial modular for variety.
Shimano: Converted a fragmented modular bicycle component industry into an integrated click-shift gear system, gaining near-monopoly through robust branding.
Design for the New Product Process
| Design Objective | Description | Example |
|---|---|---|
| Speed to Market | Ergonomic, lightweight shapes accelerating development. | Ingersoll grinders. |
| Customer Needs | Tailored to specific use cases blending functional requirements. | SUVs blending car handling with clearance; JCB excavation forks. |
| Universal Uses | Accommodates every age group with automated usage. | Automatic glass doors in retail. |
| Corporate Identity | Consistent design philosophy across product lines. | TATA front grills, Rolex aesthetics. |
| Environment | Recyclable materials, green design. | Products made from recycled plastics. |
Prototyping
Prototypes are physical or digital product approximations utilized for testing, learning, and communicating. They reduce risk, optimize time, and lower overall costs by catching errors early. They act as funding milestones during long-gestation cycles. 3D printing and CAD enable non-destructive testing, but physical prototypes remain necessary for unanticipated operational issues.
| Prototyping Strategy | Characteristics |
|---|---|
| In-House Development | Protects secrecy; necessary for unique skills; can hinder transition to mass production. |
| Vendor (Outsourced) | Easier to scale up; clearer specifications; risks IP secrecy. |
| Participant Role | Description |
|---|---|
| Direct Participants | Core team: R&D, industrial design, engineering, manufacturing. |
| Support Participants | Design consultants, marketing, vendors, resellers, service, lawyers, regulators. |
Case Study: Gillette
Gillette systematically replaces older blade technology. The Mach 3 launch (codename Manx) involved extensive prototyping to determine ideal spacing, pivots, and positioning of a 3-blade system to reduce skin irritation. Testing showed users were insensitive to price given the performance, willing to pay a 45% premium. Despite internal debate for an incremental upgrade, Gillette executed a breakthrough project costing $750M over 5 years. Years later, Gillette bypassed a 4-blade system to launch the 5-blade Fusion to rapidly counter competitors (Wilkinson Sword).
Identifying the Product Development Team
The functional department leading product development is determined by which area undergoes the most change or holds the core competency. Pharmaceutical drug development is led by R&D; an aesthetic furniture project is led by design.
Types of Structure
| Structure Type | Functionality & Use Case | Pros & Cons |
|---|---|---|
| Functional | Products move sequentially through specialized departments. Best for customized projects with defined stages (e.g., steel plants). | + Deep specialization. − Poor coordination, long timelines, lack of end-to-end ownership. |
| Project-Based | Dedicated team focuses 100% on the product start-to-finish. Best for startups and breakthrough projects. | + Short timelines, superior coordination, total ownership. − Team expertise isolated. |
| Matrix | Hybrid with dual reporting (functional + project). Used for complex long-gestation projects (aerospace). | + Resource sharing, dynamic application of skills. − Dual-reporting friction. |
In a heavyweight matrix, the product manager holds discretionary power over functional managers. In a lightweight matrix, the product manager only coordinates while functional managers control resources.
Product Integrity
Product integrity is the absolute consistency among product features, organizational structure, internal processes, and customer needs. It creates instant appeal and the "wow factor."
| Integrity Type | Focus Area |
|---|---|
| Internal Integrity | Consistency between functions, structure, and design parameters. |
| External Integrity | Consistency between actual performance and user expectations. |
Heavyweight project managers maintain product integrity over long gestation when functional teams might lose sight of the goal.
Developing New Services
Pure services are intangible and difficult to evaluate before purchase. Productizing a service converts it into a standardized package with a descriptive name, defined scope, clear timeline, and fixed pricing. This strategy lowers buyer risk, simplifies budgeting, and templatizes the workflow.
Product Service System (PSS)
A PSS combines products and services into marketable bundles, reducing commoditization.
| PSS Type | Description & Ownership | Example |
|---|---|---|
| Product-Oriented | User owns the physical product; company provides periodic maintenance. | AMCs for water purifiers, washing machines. |
| User-Oriented | Company owns the product; user rents temporarily. | Renting summer coolers, furniture. |
| Result-Oriented | User pays for a specific usage result without prior commitment. | Renting a movie on Netflix; event tent setups. |
Platform Thinking for Services
Service platforms build common architectures serving multiple needs through integrated subsystems. A core IT banking solution serves as a platform where loan processing, KYC, and treasury act as modules. SuperSeva standardized 87 services for IT companies, offering basic services free to lock in users while making it nearly impossible for competitors to match scale.
Structuring the Team
Teams require cross-functional collaboration. Synergy occurs when combined output exceeds the sum of individual capabilities. Pixar combined advanced computer graphics with elite storytelling under Steve Jobs as sponsor, fostering a culture where technical designers and content creators intermingled daily. Disney granted Pixar autonomy to protect this culture.
Ownership and Leadership
Leaders must shift styles: creative inspiration during ideation, action-oriented discipline during implementation. Product managers should be capable generalists with self-confidence and empathy.
Assigning Team Members
| Team Classification | Description |
|---|---|
| Core Team | Members for the entire project, maintaining continuity. |
| Ad Hoc Team | Specialists joining for specific phases (factory workers, field sales). |
| Extended Team | External stakeholders, suppliers, dealers, market research agencies. |
If a dedicated team isn't established, organizations use network nodes as central points of contact across functional structures.
Managing the Team
Training must be cross-functional. Technical staff must adopt a marketing orientation. Globally Dispersed Teams (GDTs) enable 24-hour work cycles but face time-zone, performance control, and cultural challenges in interpreting technical specifications.
Ultra-Quick Revision (Exam Essentials)
Key Concepts & Distinctions
| Concept A | Concept B | Key Differences |
|---|---|---|
| Modular | Integral | Modular = flexibility/customization; Integral = compact, optimized, multi-functional shared components. |
| Functional | Project-Based | Functional = sequential specialized departments (slow); Project-based = dedicated team (fast). |
| Heavyweight Matrix | Lightweight Matrix | Heavyweight: PM has discretionary power; Lightweight: PM only coordinates. |
| Pure Services | Productized Services | Pure: intangible, customized; Productized: standardized scope, fixed pricing. |
Must-Know Terms
- Design-Driven Innovation: Creates new markets and consumer meanings.
- Product Integrity: Internal + external consistency.
- PSS: Marketable combination of products and services.
- Platform Thinking: Core architectural foundation supporting subsystems.
- Synergy: Combined team output > sum of individuals.
- Core Team: Members for the entire project duration.
- Network Nodes: Connecting points between functional departments.
- GDT: Virtual teams leveraging geography and 24-hour cycles.