Managing new product definition in highly dynamic environments

In 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...

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Main Authors: BHATTACHARYA, Shantanu, KRISHNAN, Viswanathan, MAHAJAN, Vijay
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 1998
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Online Access:https://ink.library.smu.edu.sg/lkcsb_research/5105
https://ink.library.smu.edu.sg/context/lkcsb_research/article/6104/viewcontent/10.1.1.39.3865.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.lkcsb_research-61042022-09-06T05:58:51Z Managing new product definition in highly dynamic environments BHATTACHARYA, Shantanu KRISHNAN, Viswanathan MAHAJAN, Vijay In 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. 1998-11-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/5105 info:doi/10.1287/mnsc.44.11.S50 https://ink.library.smu.edu.sg/context/lkcsb_research/article/6104/viewcontent/10.1.1.39.3865.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University new product development product definition dynamic environments Entrepreneurial and Small Business Operations Marketing Operations and Supply Chain Management
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic new product development
product definition
dynamic environments
Entrepreneurial and Small Business Operations
Marketing
Operations and Supply Chain Management
spellingShingle new product development
product definition
dynamic environments
Entrepreneurial and Small Business Operations
Marketing
Operations and Supply Chain Management
BHATTACHARYA, Shantanu
KRISHNAN, Viswanathan
MAHAJAN, Vijay
Managing new product definition in highly dynamic environments
description In 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.
format text
author BHATTACHARYA, Shantanu
KRISHNAN, Viswanathan
MAHAJAN, Vijay
author_facet BHATTACHARYA, Shantanu
KRISHNAN, Viswanathan
MAHAJAN, Vijay
author_sort BHATTACHARYA, Shantanu
title Managing new product definition in highly dynamic environments
title_short Managing new product definition in highly dynamic environments
title_full Managing new product definition in highly dynamic environments
title_fullStr Managing new product definition in highly dynamic environments
title_full_unstemmed Managing new product definition in highly dynamic environments
title_sort managing new product definition in highly dynamic environments
publisher Institutional Knowledge at Singapore Management University
publishDate 1998
url https://ink.library.smu.edu.sg/lkcsb_research/5105
https://ink.library.smu.edu.sg/context/lkcsb_research/article/6104/viewcontent/10.1.1.39.3865.pdf
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