Innovation_in_New_Product_Development_and_Product_

Copyright©2011AccentureAllRightsReserved.Accenture,itslogo,andHighPerformanceDeliveredaretrademarksofAccenture.InnovationinNewProductDevelopment&ProductLifecycleManagement(PLM)A.J.Gupta,15March20112Copyright©2011AccentureAllRightsReserved.Innovationsinthe21stCenturyChallengesandOpportunitiesinInnovationandNewProductDevelopmentRoleofPLMKeyTakeawaysCaseStudiesQ&AAgenda3Copyright©2011AccentureAllRightsReserved.Innovationsinthe21stCenturyChallengesandOpportunitiesinInnovationandNewProductDevelopmentRoleofPLMKeyTakeawaysCaseStudiesQ&AAgendaToday,InnovationexecutionisimperativeinordertoovercomemarketandstructureissuesShorteninglifecyclesTechnologyDevelopments,CustomerEducationandCompetitiveIntensityhavedramaticallyincreasedtheimportanceofinnovationforbusinesssuccessAuto/IndustrialEquipmentElectronicsandHiTechFastFashionCommoditizationandChinapricingpressuresServiceIndustryTelecommunicationsShorteningLifeCyclesIndustrydisruptionMusicIndustryvs.iTunesXBookstoresvs.Amazon.comXBlockbustervs.NetflixXDigitalDisruption4Copyright©2011AccentureAllRightsReserved.ConsumerDurablesPlug-inhybridelectriccars(storagedevice)AddedgreenpowersourcesSmartappliances(e.g.,thermostats,AC/refrig/storage)+ControlGatewayReal-timeandgreenpricingsignals(portal/stats)SmartMeter―EquityMarket‖supplyvs.demandclearingonPDAInnovationinestablishedmarketsistargetedmoreatthehighendsegmentandprotectingexistingcashcowsSmartGridsSmartPhonesandApplicationsSocialNetworking–WebApplicationsPredictiveAnalyticHealth5Copyright©2011AccentureAllRightsReserved.Andtheseinnovationsaremorefocusedonaddressinghighpercapitaincomegroup6Copyright©2011AccentureAllRightsReserved.SquareTerrafugiaTransitionElectric-CarChargingStationsEyeWriterLab-GrownLungsTheX-51AWaveRider7DevelopedDominantCompetitionLowCostHighCostCopyright©2011AccentureAllRightsReserved.DefendandGrowDevelopedMarkets•Worldclassproducts•LeveragetechnologyandIP•“Tier5”AlignHigh-costProductLineuptoCompeteonValue/Cost•EstablishgrowthmarketR&DandPartnerships•Cost-basedde-featuringofdevelopedmarketproductstoaddressregionalmarketsDevelopandmigratefrugallyengineeredplatforms•Utilizewell-developedgrowthmarketR&D•Ground-uplow-costplatforms123GrowthMarketsMedicalSystems$15KportableultrasoundPartnerwithDaimler,etc.PartnerwithLiebherrRefrigerationChinesemodelChinesefull-lineDevelopGrowthMarketR&DCapability$100K+ConventionalultrasoundMigratelow-costplatformstoserveDevelopedMarkets•Commonlow-costplatforms•Architecturetomixandmatchhigh/lowendmachinestunableforanyglobalmarket4Inhighgrowthmarketsproductsneedtobefundamentallyre-orchestratedratherthende-contentedproductsfromestablishedmarketsclientclientclientclientclientclientclient8Copyright©2011AccentureAllRightsReservedInnovationstrategyforgrowthmarketsfocusesonthe―BaseofthePyramid‖•Pursuingthe―base‖forcesrethinkingofconventionalwisdomabout:–Technologyandbusinessmodels(TataNano)–Scaleandprofitability(SmallPlasticShampoosachets)–Price-performancerelationships(PlasticBottlesforCola)–Productivityandcapitalefficiency(GrameenBanks)–Sustainabledevelopment(AmulCooperatives)4BillionPeopleEarninglessthan$2,000/year$2,0004,000MiddleClassindevelopingcountries$2,000—$20,0002,000WealthyNationsAnnualPurchasingPowerParity(PPP)in$US$20,000PopulationInMillions100Source:C.KPrahladInnovationinnewgrowthmarketsistargetedatBottomofPyramid9Copyright©2011AccentureAllRightsReserved.ThinkGlobalandactlocal,seemstobethemantra.Moreimportanceistogivemoreimportancetofunctionalityandperformancewithleastfrills•Integrated•Flexible•Insight-DrivenGlobalR&DLocalR&D1LocalR&D1HighPerformingBusiness?PositioningfortheFuturePeerCompetitivenessNOKIAR&DPeopleCultureMassRuralMarketDesignSimpleLowCostNOKIA40%shareinemergingmarketUp&closetoculture(Functional+performance)Style=NoFrills(DesignSimple)GrowthMarketsareactingaslaboratoriesofproductinnovationandproductdevelopmentCopyright©2011AccentureAllRightsReserved.CustomervaluepropositionChallenges:•Customerrequiremorevalueandsophistication•Highcompitetionsinceentrybarierinemergingmarketsislow•Technologyperspective•ToomuchfocusonmakingsmallchangesonlyApproach:Companiesprovidecustomizedproductsforuniquecustomersegment,withmoreinvolvementoflocalwithinthepricepointsexpectedbythecustomersFocusAreasCustomizedofferingGoingLocalPriceperformancemetrics•Significantdifferenceinproductfromthehomemarket-200mlcolabottle•Pricetobetailoredtoemergingmarketrequirements•Adaptstoneedtoemergingmarkets•Reductioninminimumproductsizeforsellingatlowerprice•Designsimpletoreducethecosts•Innovatingpackagingforcostreduction•Actonuniquecustomerrequirements•Tailorproducttolocalrequirements,e.g.smallsachetsforshampoosHence,InnovationsingrowthmarketsprovideenhancedTotalValueProposition10GlobalizationRegulationsmakingrecyclingmandatoryComplexityCompetitionCleanGreenTimetoMarketProfitabilityandGrowthTobeInnovative,executivesfaceChallengesinProducts,Process,Organizationandsystems11Copyright©2011AccentureAllRightsReserved.•Managingexplodingproductcomplexityandtechnologyproliferation•Embeddingprodu