to provide clear guidance for the product devel opment organization , generally the team formu lates a more detailed definition of the target market and of the assumptions under which the development team will operate. These decisions are captured in a mission state ment, a summary of which is illustrated in Exhibit 4-10.
Mission Statements
The mission statement may include some or all of the following information:
• Brief (one-sentence) description of the product: This description identifies the basic function of the product but avoids implying a specific product concept. It may, in fact, be the product vision statement.
• Benefit proposition: This element of the mission statement articulates the critical few reasons a customer would buy the product. To some extent this is a hypothesis, which will be validated during the concept development process.
• Key business goals: In addition to the project goals that support the corporate strategy, thee goals generally include goals for time, cost, and quality (e.g., timing of the product introduction. de ired financial performance. market bare targets).
• Target market(s) for the product: There may be several target markets for the product.
This part of the mission statement identifies the primary market as well as any second
ary markets that should be considered in the development effort.
• Assumptions and constraints that guide the development effort: Assumptions must be made carefully; although they restrict the range of possible product concepts, they help to maintain a manageable project scope. Information may be attached to the mission statement to document decisions about assumptions and constraints.
• Stakeholders: One way to ensure that many of the subtle development issues are ad dressed is to explicitly list all of the product's stakeholders, that is, all of the groups of people who are affected by the product's success or failure. The stakeholder list be gins with the end user (the ultimate external customer) and the external customer who makes the buying decision about the product. Stakeholders also include the customers of the product who reside within the firm, such as the sales force, the service organi zation, and the production departments. The list of stakeholders serves as a reminder for the team to consider the needs of everyone who will be influenced by the product.
Assumptions and Constraints
In creating the mission statement, the team considers the strategies of several functional areas within the firm. Of the many possible functional strategies to consider, the manu facturing, service, and environmental strategies had the largest influence on the Lakes project. In fact, these strategies guided the core technical developments of the product.
One could reasonably ask why manufacturing, service, and environmental strategies
(for example) should be part of the mission statement for a new product. An alternative view is that decisions about these issues should arise from the customer needs for the new product and should not be determined in advance. First, for extremely complex projects, like Lakes, the design of the manufacturing system is a project of similar magnitude to the design of the product itself. As a result, the manufacturing facilities involved in the product need to be identified very early in the process. Second, some product require ments may not be derived strictly from customer needs. For example, most customers will not directly express a need for low environmental impact. However, Xerox chose to adopt a corporate policy of environmentally responsible design. In such cases, the mission state ment should reflect such corporate objectives and constraints.
Following are some of the issues that Xerox considered in establishing assumptions and constraints for the Lakes project.
• Manufacturing: Even at this very preliminary stage, it is important to consider the capabilities, capacities, and constraints of the manufacturing operations. A broad array of questions may be relevant, including: Which internal production facilities might be used to manufacture and assemble the product? What key suppliers should be involved in the development, and when? Are the existing production systems ca pable of producing the new technologies that have been identified for the product? For Lakes, Xerox assumed that input devices would be manufactured at production sites in Canada, output devices in Brazil, and the digital image processing engine in both the United States and Europe.
• Service: In a business where customer service and service revenue are critical to the success of the firm, it is necessary to also state strategic goals for levels of service
quality. Efforts to improve service include a strategic commitment to designing prod ucts that contain few parts, which can be serviced quickly. For Lakes, serviceabi lity goals included reducing both the number of field-replaceable modules requ ired to fully service the machine and the time to install them by an order of magnitude.
• Environment: Many corporations today are developing new products with environmen tal sustainability in mind. The Lakes concept team adopted Xerox's first "zero to land fill" policy, an aggressive goal even for a leader in environmental design practices such as Xerox. The stated goal was that no components from a Lakes product should ever go to a landfill. All components would be either remanufacturable or recyclable, or both. No parts should be disposed of by customers. The Lakes environmental design strategy also included an energy efficiency goal to be the "most efficient machine in its class."
Staffing and Other Pre-Project Planning Activities
The pre-project planning activity also generally addresses project staffing and leadership. This may involve getting key members of the development staff to "sign up" for a new project, that is, to agree to commit to leading the development of the product or of a critical element of the product. Budgets are also generally established during pre-project pl anning.
For fundamentally new products, budgets and staffing plans will be for the concept de
velopment phase of development only. This is because the details of the project are highly uncertain until the basic concept for the new product has been established. More detailed planning will occur when and if the concept is developed further.
Step 5: Reflect on the Results and the Process
In this final step of the pl anning and strategy process, the team should ask several questions to assess the quality of both the process and the results. Some suggested questions are:
• Is the opportunity funnel collecting an exciting and diverse set of product opportunities?
• Does the product plan support the competitive strategy of the firm?
• Does the product plan address the most important current opportunities facing the firm?
• Are the total resources allocated to product development sufficient to pursue the firm 's competitive strategy?
• Have creative ways of leveraging finite resources been considered, such as the use of product platforms, joint ventures, and partnerships with suppliers?
• Does the core team accept the challenges of the resulting mission statement?
• Are the elements of the mission statement consistent?
• Are the assumptions listed in the mission statement really necessary or is the project overconstrained? Will the development team have the freedom to develop the best pos sible product?
• How can the product planning process be improved?
Because the mission statement is the handoff to the development team, a "reality check" must be performed before proceeding with the development process. This early stage is the time to remedy known flaws, lest they become more severe and expensive as the development process progresses.
This chapter explains the product planning method as a stepwise process, largely for
simplicity of the presentation. However, reflection and criticism of consistency and fit
should be an ongoing process. Steps in the process can and should be executed simultane ously to make sure that the many plans and decisions are consistent with one another and
with the goals, capabilities, and constraints of the firm.
Summary
• Product planning is a periodic process that considers the portfolio of product develop
ment projects to be executed.
• Product planning involves a five-step process:
1. Identify opportunities.
2. Evaluate and prioritize projects.
3. Allocate resources and plan timing.
4. Complete pre-project planning.
5. Reflect on the results and the process.
• The opportunity funnel collects possibilities for new product platforms, enhancements, and fundamentally new products from several sources within and outside the firm.
• Potential product development projects are evaluated based on the organization's com
petitive strategy, technological trajectories, and product platform plans.
• A balanced portfolio of development projects may include investments in breakthrough products, new platforms, derivatives, and current product support.
• Aggregate planning ensures that selected projects have adequate resources for success
ful completion.
• A mission statement for each product development project documents the product description, benefit proposition, business goals, target markets, critical assumptions, and the product's stakeholders.
References and Bibliography
Many current resources are available on the Internet via
www.ulrich-eppinger.net
There are many excellent books on competitive strategy. These selections include discussions related to product planning.
Day, GeorgeS., Market Driven Strategy: Processes for Creating Value, The Free
Press, New York, 1990.
Moore, Geoffrey A., Crossing the Chasm: Marketing and Selling Technology
Products to Main