5.14:
New Product Development – Need
New Product Development, or NPD, is a business process that involves the conceptualization, design, development, and marketing of entirely new products or significantly improving existing ones.
The need to differentiate and remain competitive in a saturated market necessitates businesses to develop new products.
This process is driven by innovation, effective risk management, responsiveness to fashion cycles, and the enhancement of business relationships.
Innovation in sustainable materials and manufacturing methods has led brands like Patagonia and Stella Mc Cartney to capitalize on them. It enables businesses to meet the ever-increasing preference and demand for sustainable clothing.
Additionally, it helps expand market share and mitigate risks through a broader product portfolio. H&M's strategic shift from fast fashion to sustainability with the Conscious collection exemplifies this.
New Product Development, like Nike's recycled shoes targeting environmentally conscious consumers, helps companies to align with fashion cycles, catering to the latest customer trends.
Ultimately, New Product Development is linked to improving business relationships by fostering collaborations with suppliers and promoting transparency in the supply chain.
5.14 New Product Development – Need
New Product Development (NPD) is a critical activity for businesses aiming to maintain competitiveness and foster growth. The factors driving the need for NPD are:
- Market Competition: Increasing global competition necessitates continuous innovation. Companies must develop new products to differentiate themselves, capture market share, and stay ahead of competitors.
- Customer Needs & Expectations: As customer preferences evolve, companies must create new products to meet these changing needs and expectations. It includes adapting to external environmental trends.
- Technological Advancements: Rapid technological progress opens up opportunities for new product development. By leveraging new technologies, companies can create innovative products that provide them with a competitive edge.
- Shortening Product Life Cycles: Products have shorter life cycles due to fast-changing consumer trends and technological advancements. As a result, continuous NPD becomes necessary to replace obsolete products.
- Strategic Objectives: Companies may engage in NPD to achieve strategic objectives, such as entering new markets, targeting new customer segments, or enhancing brand image.
- Business Success and Growth: New products contribute significantly to a company's growth and success. They generate revenue, improve market position, and enhance the brand's reputation.