Product Development Process in Contemporary Environment

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The modern business scenario is highly competitive and understanding its complex dynamics is essential for companies to gain competitive advantages. New product development (NPD) and innovation are crucial in determining the success or failure of a company. This paper analyses some of the critical concepts that define the success or the failure of a firm. The text deepens the competitor’s identification through a literature review, and it analyses the idea of customer trends by exploring the current attitude towards mobility and transportation.

Finally, the paper provides an assessment of the most commonly used product development models, highlighting pros, cons, and suggesting a mixed model that incorporate some aspects of the stage-gate model with the short development cycles framework. The complex dynamics that influence innovation and NPD indicates that they are part of the management process. Analysis of competitors and customer trends, as well as the anticipation of future tendencies, allow the management to define adequate planning strategies.

Innovation and development of new products

Innovation and new product development (NPD) are essential aspects of modern businesses. They are indissolubly related and should be seen as a management process rather than a functional activity (Trott, 2008). Both innovation and NPD require a broad range of expertise which includes human resource management, finance, business strategy, marketing, and manufacturing. A company that does not invest in innovation and NPD is inevitably bound to disappear from the market.

An effective example that mirrors the high level of competition in modern business is the mobile phone sector. Apple is a corporation that has innovation and NPD as a mission, as highlighted by the way Steve Jobs emphasizes the revolutionary interface of the iPhone in 2007 (Naawat, 2011, 3:00). The charismatic personality of Jobs was part of the marketing strategy of Apple.

The importance of innovation, NPD, and competition affects not only a specific market sector, but it involves the national growth. Tidd and Bessant (5) highlight how innovation and NPD impact other fields than technological products, allowing companies to reduce production costs and resist competitors from areas where labor costs are traditionally lower. From a wider perspective, therefore, innovation and NPD are becoming a central aspect of national economies and planning.

Potential Competitors, innovation, and NPD

Planning the development of new products or updating existing ones involves several aspects. Marketing, customer trends, available similar products, research, and development opportunities are some of the issues to be taken into consideration (Trott, 2008). Hence, identifying competitors is a crucial phase in planning the development of new products. The range of potential competitors is broad and includes all the rival companies that offer similar products (Earle and Earle, 2008).

Creating a competitive strategy to achieve competitive advantage requires the knowledge and understanding of the actual state of the market, and the ability to anticipate the actions of the competitors (Yu et al.). Competitors analysis is a complex process that should involve several aspects to be effective in creating consistent competitive advantages. The competitive environment changes dynamically, and any planning for the development of new products should be updated consequentially.

Assessing the presence and weight of rivals in a specific market sector narrows the focus on which products are likely to become successful (Trott, 2008). In some cases, managers can perform partial competitor analysis, failing to include foreign rivals or showing difficulties in anticipating the future state of the external environment (Yu et al., 2015; Yu et al. 2016). Companies can follow several strategies to identify competitors, including web searches, surveys, interviews, and focus groups (Baxter et al., 2015).

Depending on the sector in which the company is involved, further methods include the mining of customer reviews on competitors’ products (Gao et al., 2018). Some authors highlight the importance of monitoring and managing patients. Patents provide information on the technological advancement of competitors (Holger et al., 2016). They identify market niches and possible developments and offer the chance to create patents aimed at blocking the progress of the competitors.

Correct competitor analysis means adequate competitive strategies to gain competitive advantages. When a company has profit rates higher than the average value within the related market sector, the firm has a competitive advantage (Hosseini et al., 2018). However, the dynamics of the market and fierce competition require adequate strategies to maintain competitive advantages. Some organizations have implemented technologies and procedures to promote consistent innovation and to quickly modify the existing product range if the market conditions change.

Google’s employees, for example, are required to devote a percentage of their working time on developing projects of their choice, while Zara has developed a great ability to modify its offer according to the market trends (Arnett et al., 2018). Both NPD and adaptation of existing products are crucial for effectiveness on the market, the former requiring the implementation of standard procedures to ensure the constant development of new ideas, the latter insisting on the flexibility of resources and how these are used.

Marketing orientation and understanding of customer trends provide competitive advantages. However, Zigger and Henseler (2015) notice that there is little knowledge of how different orientation strategies interrelate, affecting product performance. Food, technology, and mobility are some of the sectors where customer trends are changing quickly; veganism is increasing, augmented reality livens up the technological research, mobility patterns are changing dynamically (Pilař et al., 2018; Chung et al. 2015; Speranza, 2018).

The new trends in mobility are likely to impact innovation within companies largely. Over the last decade, there has been a progressive and substantial shift in the use of mobility services; alternative and varied forms of transportation are taking over the traditional model of owning one or more cars (Brendel and Mandrella, 2016). Car sharing and the combined use of public and private means of transportation are some of the emerging trends, especially in metropolitan areas.

The topic has dramatic relevance as, by 2030, 60% of the total population will converge in urban environments and the demand for urban mobility will increase drastically (Brenden and Mandrella, 2016). Within this scenario, some developing directions emerge.

Transportation and mobility impact the global degradation of the environment largely (Hildebrandt et al., 2015). From this perspective, companies are required to create research and innovation toward sustainable products. Also, new business and urban models are to be developed to meet the customers’ demands and support sustainability (Hildebrandt et al., 2015). A unique provider, for example, could offer different means of transportation to its customers.

Product Development Models

Product development models offer theoretical frameworks to ease the creation or the modification of a product to meet the market demand. They are methods to implement a business strategy coherently and effectively (Wirtz et al., 2015). First theoretical models, such as departmental stage frameworks and activity-stage models, were conducted by companies internally. Overall, these models are prescriptive and mechanistic, lacking dynamism and flexibility, and failing to feel the pulse of the market (Lee et al. 2018). More modern models are customer-centered and take into consideration the dynamism within the market.

Stage-gate models are among the most utilized among firms of every size. These frameworks include a series of vital steps, the gates, where the project can be taken to the following stage, or killed (Cooper, 2012). For example, a multi-stage stochastic optimization model for energy systems planning and risk management allows the management of a building to handle the uncertainties effectively and optimize the final expected cost (Cano et al., 2016). The stage-gate model is flexible and scalable; a downside is the risk of poor judgment during the crucial gate-steps.

Choosing the correct product development model depends on several factors. First generations frameworks are used in fields where innovations are not disruptive, and where traditional products continue to offer adequate performance. In the construction environment, for example, departmental stage and activity-stage models still offer excellent outcomes (Harison et al., 2015). More dynamic sectors require more flexible and permeable models.

Agility is becoming a strong trend in strategy planning, and a model that includes a series of short development cycles is currently being widely used (Lee et al., 2018). The risk, in agile practices, is the lack of management and scalability. Perhaps, a proactive and modern model could combine the agility of the short development cycles framework with the managerial strength of the stage-gate model. Between the gates, the process should be as open as possible to allow dynamism and permeability. At the gates, the management should take stricter control, evaluating the progress, assessing external inputs, and anticipating possible changes in the market scenario to make decisions and providing guidelines for the following step.


The centrality of innovation and NPD in the management process within the current business environment is undeniable. Analysis of the competitors, existing customer trends, and the ability to anticipate future market tendencies are crucial in defining planning strategies. Different product development models are available, and each company should choose the most appropriate for a certain product. Combining aspects of the stage-gate model with the agility of the short development cycles model seems to offer interesting developing areas.

Reference List

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