Product Planning
EXHIBIT 4-1
Courtesy of Xerox
The Lakes project developed a new copier platform, including this new product, the Xerox
Document Centre 265.
• Derivatives of existing product platforms: These projects extend an exist ing product platform to better address familiar markets with one or more new products. To develop a new copier based on an existi ng l ight-lens (not digital) product platform woul d be an example of th is type of project.
• Incremental improvements to existing products: These projects may on ly involve add ing or modify ing some features of existi ng prod ucts in order to keep the product line current and competitive. A sl ight change to remedy minor flaws in an existing copier product would be an example of this type of project.
• Fundttmenta/ly new products: Th ese projects i nvolve radically different product or production technologies and may help to address new and unfamiliar markets. Such projects inherently involve more risk; however, the long-term success of the enterprise may depend on what is learned through these important projects. The first digital copier Xerox developed is an exampl e of this type of project.
The Process
Exhibit 4-3 illustrates the steps in the product pl anning process. First, m u l tipl e opportuni ties are prioritized and a set of promising projects is selected. Resources are allocated to these projects and they are scheduled. Th ese pl a n n i ng acti vities focus on a portfolio of opportunities and potentia l projects and are sometimes referred to as portfol io manage ment, aggregate product pl anning, product line plarming, or product management. Once projects h ave been selected and resources allocated, a m ission statement is developed for each project. The formulation of a product plan and the development of a mission state ment therefore precede the actual product devel opment process.
A l though we show the plann i ng process as essentially linear, the activi t ies of
selecting promising projects and allocating resources are i n herently iterative. The real i ties of schedules and b udgets often force a reassessment of priorities and further refinement and cul l ing of potential projects. The product pl an is therefore reevaluated frequently and sh ou l d be modified based on the latest information from develop ment teams, research laboratories, production, marketing, and service organizat ions. Peopl e involved l ater in the process are often the first to rea l ize that someth i ng about the overall plan or a project's mission is inconsistent, infeasible, or out of date. The abi l ity to adjust the product plan over ti me is vital to the long-term success of the enterprise.
EXHIBIT 4-3 The product planning process. These activities address a portfol io of product development projects, resulting in a product plan and, for each selected project, a mission statement.
Xerox Corporation is a global enterprise offering a wide a rray of document-related products, services, and business solutions. lls mission is to be the leader in the global document market, providing document solutions that enhance business product i vity. A key element of Xerox 's competitive strategy is to exploit technological innovation in a rapidly changing market. Pursui ng this strate&ry require the ability to choose the right set of development projects and to define the scope of these projects in uch a way that the projects a re complementary. Exhibit 4-1 is a photo of t he Xerox Document Centre 265, a product resulting from a Xerox project code-named Lakes.
The product planning process takes place before a product development project is formally approved, before substantial resou rces are applied, and before the larger devel opment team is formed. Product planning is an activity that considers the portfolio of projects that a n organization might pursue and determines what subset of these projects wi ll be pursued over what time period. The product planning activity ensures that product development projects support t he broader business strategy of the company and addresses these questions:
• What product development projects wi l l be undertaken?
• What mix of fundamenta ll y new products, platforms, and deri vative products should be pursued?
• !low do the various projects relate to each other as a portfolio?
• What will be the timing a nd sequence of the projects?
Each of the selected projects is then completed by a product development team. The team needs to know its mi ssion before beginn ing development. The answers to the e criti cal questions are included in a mission statement for the team:
• What market segments shou ld be considered in designing the product and deve loping its features?
• What new technologies (if any) should be incorporated into the new product?
• What are the manufacturing and ser vice goals and constraints?
• What are the financial targets for the project?
• What are the budget and time frame for the project?
This chapter explains how an orga ni zation can maximize the effectiveness of its prod uct development efforts by f irst considering the set of potential projects it might pursue, deciding which projects arc most desirable, and then launching each project with a fo cu ed mission. We present a f i ve-step planning process beginning with the identification of opportunities and resulting in a mission statement for the project team.
The Product Planning Process
The product plan identifies the portfolio of products to be developed by the organization a nd the timing of their introd uction to the market. The planning process considers prod uct development opportunities identified by many sources, incl uding suggesti ons from marketing, resea rch, customers, current product development teams, and benchmarking of competitors. From among the e opportunities, a portfolio of project is chosen, timing of
EXHIBIT 4-2
The product plan identifies the portfolio of projects to be pursued by the development organization.
This plan divides projects into four categories: new platforms, derivatives of existing platforms, product improvements, and fundamentally new products.
projects is outlined, and resources are allocated. Exhibit 4-2 is an example of a product plan listing products to be devel oped and indicating the time frame for each.
The product plan is regu l arly updated to reflect changes in the competitive environ ment, changes in technol ogy, and information on the success of existing products. Product plans are developed with the company 's goa l s, capabilities, constraints, and competitive environment in mind. Product planning decisions generally involve the senior ma nage ment of the organization and may take pl ace on l y annually or a few times each year. Some organizations have a director of pl an n ing who manages this process.
Organizations that do not carefu ll y plan t he por tfolio of devel opment projects to pur
sue are often plagued with inefficiencies such as:
• Inadequate coverage of target markets with competitive products.
• Poor timing of market introductions of products.
• Mismatches between aggregate development capacity and the number of projects pursued.
• Poor di stribution of resources, with some projects overstaffed and others understaffed.
• Initiation and subsequent cancellation of ill -conceived projects.
• Frequent changes in the d i rections of projects.
Four Types of Product Development Projects
Product development projects can be classified as four types:
• New product platforms: This type of project involves a major development effort to create a new family of products based on a new, common platform . The new product family would address familiar markets and product categories. The Xerox Lakes proj ect, aimed at the development of a new, d i gital copier platform, is an exa mple of this type of project.
56 Chapter 4
• Derivatives of existing product platforms: These projects extend an existing product platform to better address familiar markets with one or more new products. To develop a new copier based on an existing light-lens (not digital) product platform would be an example of this type of project.
• Incremental improvements to existing products: These projects may only involve add ing or modifying some features of existing products in order to keep the product line current and competitive. A slight change to remedy minor flaws in an existing copier product would be an example of this type of project.
• Fundamentally new products: These projects involve radically different product or production technologies and may help to address new and unfamiliar markets. Such projects inherently involve more risk; however, the long-term success of the enterprise may depend on what is learned through these important projects. The first digital copier Xerox developed is an example of this type of project.
The Process
Exhibit 4-3 illustrates the steps in the product planning process. First, multiple opportuni ties are prioritized and a set of promising projects is selected. Resources are allocated to these projects and they are scheduled. These planning activities focus on a portfolio of opportunities and potential projects and are sometimes referred to as portfolio manage ment, aggregate product planning, product line planning, or product management. Once projects have been selected and resources allocated, a mission statement is developed for each project. The formulation of a product plan and the development of a mission state ment therefore precede the actual product development process.
Although we show the planning process as essentially linear, the activities of
selecting promising projects and allocating resources are inherently iterative. The reali
Product PlanningEXHIBIT 4-1 Courtesy of Xerox The Lakes project developed a new copier platform, including this new product, the XeroxDocument Centre 265.• Derivatives of existing product platforms: These projects extend an exist ing product platform to better address familiar markets with one or more new products. To develop a new copier based on an existi ng l ight-lens (not digital) product platform woul d be an example of th is type of project.• Incremental improvements to existing products: These projects may on ly involve add ing or modify ing some features of existi ng prod ucts in order to keep the product line current and competitive. A sl ight change to remedy minor flaws in an existing copier product would be an example of this type of project.• Fundttmenta/ly new products: Th ese projects i nvolve radically different product or production technologies and may help to address new and unfamiliar markets. Such projects inherently involve more risk; however, the long-term success of the enterprise may depend on what is learned through these important projects. The first digital copier Xerox developed is an exampl e of this type of project.The ProcessExhibit 4-3 illustrates the steps in the product pl anning process. First, m u l tipl e opportuni ties are prioritized and a set of promising projects is selected. Resources are allocated to these projects and they are scheduled. Th ese pl a n n i ng acti vities focus on a portfolio of opportunities and potentia l projects and are sometimes referred to as portfol io manage ment, aggregate product pl anning, product line plarming, or product management. Once projects h ave been selected and resources allocated, a m ission statement is developed for each project. The formulation of a product plan and the development of a mission state ment therefore precede the actual product devel opment process.A l though we show the plann i ng process as essentially linear, the activi t ies ofselecting promising projects and allocating resources are i n herently iterative. The real i ties of schedules and b udgets often force a reassessment of priorities and further refinement and cul l ing of potential projects. The product pl an is therefore reevaluated frequently and sh ou l d be modified based on the latest information from develop ment teams, research laboratories, production, marketing, and service organizat ions. Peopl e involved l ater in the process are often the first to rea l ize that someth i ng about the overall plan or a project's mission is inconsistent, infeasible, or out of date. The abi l ity to adjust the product plan over ti me is vital to the long-term success of the enterprise.EXHIBIT 4-3 The product planning process. These activities address a portfol io of product development projects, resulting in a product plan and, for each selected project, a mission statement. Xerox Corporation is a global enterprise offering a wide a rray of document-related products, services, and business solutions. lls mission is to be the leader in the global document market, providing document solutions that enhance business product i vity. A key element of Xerox 's competitive strategy is to exploit technological innovation in a rapidly changing market. Pursui ng this strate&ry require the ability to choose the right set of development projects and to define the scope of these projects in uch a way that the projects a re complementary. Exhibit 4-1 is a photo of t he Xerox Document Centre 265, a product resulting from a Xerox project code-named Lakes.The product planning process takes place before a product development project is formally approved, before substantial resou rces are applied, and before the larger devel opment team is formed. Product planning is an activity that considers the portfolio of projects that a n organization might pursue and determines what subset of these projects wi ll be pursued over what time period. The product planning activity ensures that product development projects support t he broader business strategy of the company and addresses these questions:• What product development projects wi l l be undertaken?• What mix of fundamenta ll y new products, platforms, and deri vative products should be pursued?• !low do the various projects relate to each other as a portfolio?• What will be the timing a nd sequence of the projects?Each of the selected projects is then completed by a product development team. The team needs to know its mi ssion before beginn ing development. The answers to the e criti cal questions are included in a mission statement for the team:• What market segments shou ld be considered in designing the product and deve loping its features?• What new technologies (if any) should be incorporated into the new product?• What are the manufacturing and ser vice goals and constraints?• What are the financial targets for the project?• What are the budget and time frame for the project?This chapter explains how an orga ni zation can maximize the effectiveness of its prod uct development efforts by f irst considering the set of potential projects it might pursue, deciding which projects arc most desirable, and then launching each project with a fo cu ed mission. We present a f i ve-step planning process beginning with the identification of opportunities and resulting in a mission statement for the project team.The Product Planning ProcessThe product plan identifies the portfolio of products to be developed by the organization a nd the timing of their introd uction to the market. The planning process considers prod uct development opportunities identified by many sources, incl uding suggesti ons from marketing, resea rch, customers, current product development teams, and benchmarking of competitors. From among the e opportunities, a portfolio of project is chosen, timing of
EXHIBIT 4-2
The product plan identifies the portfolio of projects to be pursued by the development organization.
This plan divides projects into four categories: new platforms, derivatives of existing platforms, product improvements, and fundamentally new products.
projects is outlined, and resources are allocated. Exhibit 4-2 is an example of a product plan listing products to be devel oped and indicating the time frame for each.
The product plan is regu l arly updated to reflect changes in the competitive environ ment, changes in technol ogy, and information on the success of existing products. Product plans are developed with the company 's goa l s, capabilities, constraints, and competitive environment in mind. Product planning decisions generally involve the senior ma nage ment of the organization and may take pl ace on l y annually or a few times each year. Some organizations have a director of pl an n ing who manages this process.
Organizations that do not carefu ll y plan t he por tfolio of devel opment projects to pur
sue are often plagued with inefficiencies such as:
• Inadequate coverage of target markets with competitive products.
• Poor timing of market introductions of products.
• Mismatches between aggregate development capacity and the number of projects pursued.
• Poor di stribution of resources, with some projects overstaffed and others understaffed.
• Initiation and subsequent cancellation of ill -conceived projects.
• Frequent changes in the d i rections of projects.
Four Types of Product Development Projects
Product development projects can be classified as four types:
• New product platforms: This type of project involves a major development effort to create a new family of products based on a new, common platform . The new product family would address familiar markets and product categories. The Xerox Lakes proj ect, aimed at the development of a new, d i gital copier platform, is an exa mple of this type of project.
56 Chapter 4
• Derivatives of existing product platforms: These projects extend an existing product platform to better address familiar markets with one or more new products. To develop a new copier based on an existing light-lens (not digital) product platform would be an example of this type of project.
• Incremental improvements to existing products: These projects may only involve add ing or modifying some features of existing products in order to keep the product line current and competitive. A slight change to remedy minor flaws in an existing copier product would be an example of this type of project.
• Fundamentally new products: These projects involve radically different product or production technologies and may help to address new and unfamiliar markets. Such projects inherently involve more risk; however, the long-term success of the enterprise may depend on what is learned through these important projects. The first digital copier Xerox developed is an example of this type of project.
The Process
Exhibit 4-3 illustrates the steps in the product planning process. First, multiple opportuni ties are prioritized and a set of promising projects is selected. Resources are allocated to these projects and they are scheduled. These planning activities focus on a portfolio of opportunities and potential projects and are sometimes referred to as portfolio manage ment, aggregate product planning, product line planning, or product management. Once projects have been selected and resources allocated, a mission statement is developed for each project. The formulation of a product plan and the development of a mission state ment therefore precede the actual product development process.
Although we show the planning process as essentially linear, the activities of
selecting promising projects and allocating resources are inherently iterative. The reali
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