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How to Manage a global product development process
.ABSTRA(‘TS
[My real work] is my own specialist expertise,my own development work. We do not have so many people in our team so I often takepart in the software development together with my subordinatesduring the day. [Also] quite often I try to do someof my own development projects after five. Tasks and duties in the Japanese firms have a certain degree of overlap. Information exchange and dissemination is of paramount importance, and sometimes takes up a third of the engineers’ time. As a result, all kinds of relevant knowledge is widely distributed to engineers and managers alike. The downside is that these firms can be quite stressful places to work! Regarding skill development and career patterns, British engineers practice on-the-job training of an individual kind, concentrating on enlarging their specific skills. As a result, they remain narrow specialists without career prospects. No wonder British management has few engineers in its ranks! Japanese engineers. on the other hand, receive group-based on-thejob training, and a broader one at that: general technical and organizational skills are developed as well. These skills are important for the firm to cope with dynamic changes in technologies and markets; also, they prepare R&D engineers for a career up into management.
Flashlight-the most successful new product ever developed by B&D. A global vision statement guides B&D’s new product development. In particular, the innovation strategy at B&D has three tiers of sales goals. First, 30 to 35% of sales are sought from line freshening (i.e., minor cosmetic upgrades). Second, 20 to 40% of sales are sought from two to four significant product line upgrades (i.e., major redesigns to improve performance, appearance, features, costs). Finally. every 18 to 24 months, B&D strives to develop at least one major new product line. Black & Decker actively seeks to develop products that generally are the same from country to country. In particular, the development of the B&D SnakeLight is an interesting example for three reasons. First. this product has been phenomenally successful in North America, Europe, Latin America, and Australia. Second, in most of these markets, the market appears to be saturated, since the penetration rate is between 80 and 100%. However, through innovation, B&D was able to develop a flashlight that better met the needs of consumers. Third, the product is virtuahy identical in every country. In summary, the lessons that may be learned from B&D’s experiences in developing global products are: 1. It is important to understand similarities and differ-
How to Manage a Global Product Development Process, Donald R. Graber, Industrial Marketing Management (November 1996), pp. 483-489 (JBS)
A long-standing debate among both researchers and practitioners centers on the standardization versus adaptation of products. Standardization means that the same product is sold in every country that a firm competes in without modifying or adapting it for the needs or wants of the various markets. The benefit of such a strategy is the ability to gain economies of scale by manufacturing a single product rather than multiple products. The drawback, however, is that competitive product offerings may appeal more to individuals in the various international markets. Conversely, with an adaptation strategy, the product is modified to better fit the needs of the consumers in the various countries. Such a strategy may increase sales, but also increases costs. In this article, Graber, an executive at Black & Decker Corporation (B&D), shares his insights regarding B&D’s global new product strategy and discusses the development of the B&D SnakeLight Flexible
ences of consumers in the focal countries. Differences in religion, culture, education. income, living conditions, and so on are important. 2. Do not try to standardize a product more than required or desirable. Not a11consumers have the same needs and wants. Standardization is only possible to the extent that consumer have similar preferences. 3. Global new product development teams are important for success.These are multifunctional, multigeographic teams. Such teams bring expertise from their respective functions and geographic locations, and this expertise is essential to developing a winning global product. 4. Commitment from top management to developing new products is important to provide a global strategy, to remove roadblocks, to provide advice, and to allocate resources. DeveIoping
Technobgy with R&D Customers, Andrzej M. Pawlak, Research-Technology Management (September-October 1996). pp. 44 -47
[My real work] is my own specialist expertise,my own development work. We do not have so many people in our team so I often takepart in the software development together with my subordinatesduring the day. [Also] quite often I try to do someof my own development projects after five. Tasks and duties in the Japanese firms have a certain degree of overlap. Information exchange and dissemination is of paramount importance, and sometimes takes up a third of the engineers’ time. As a result, all kinds of relevant knowledge is widely distributed to engineers and managers alike. The downside is that these firms can be quite stressful places to work! Regarding skill development and career patterns, British engineers practice on-the-job training of an individual kind, concentrating on enlarging their specific skills. As a result, they remain narrow specialists without career prospects. No wonder British management has few engineers in its ranks! Japanese engineers. on the other hand, receive group-based on-thejob training, and a broader one at that: general technical and organizational skills are developed as well. These skills are important for the firm to cope with dynamic changes in technologies and markets; also, they prepare R&D engineers for a career up into management.
Flashlight-the most successful new product ever developed by B&D. A global vision statement guides B&D’s new product development. In particular, the innovation strategy at B&D has three tiers of sales goals. First, 30 to 35% of sales are sought from line freshening (i.e., minor cosmetic upgrades). Second, 20 to 40% of sales are sought from two to four significant product line upgrades (i.e., major redesigns to improve performance, appearance, features, costs). Finally. every 18 to 24 months, B&D strives to develop at least one major new product line. Black & Decker actively seeks to develop products that generally are the same from country to country. In particular, the development of the B&D SnakeLight is an interesting example for three reasons. First. this product has been phenomenally successful in North America, Europe, Latin America, and Australia. Second, in most of these markets, the market appears to be saturated, since the penetration rate is between 80 and 100%. However, through innovation, B&D was able to develop a flashlight that better met the needs of consumers. Third, the product is virtuahy identical in every country. In summary, the lessons that may be learned from B&D’s experiences in developing global products are: 1. It is important to understand similarities and differ-
How to Manage a Global Product Development Process, Donald R. Graber, Industrial Marketing Management (November 1996), pp. 483-489 (JBS)
A long-standing debate among both researchers and practitioners centers on the standardization versus adaptation of products. Standardization means that the same product is sold in every country that a firm competes in without modifying or adapting it for the needs or wants of the various markets. The benefit of such a strategy is the ability to gain economies of scale by manufacturing a single product rather than multiple products. The drawback, however, is that competitive product offerings may appeal more to individuals in the various international markets. Conversely, with an adaptation strategy, the product is modified to better fit the needs of the consumers in the various countries. Such a strategy may increase sales, but also increases costs. In this article, Graber, an executive at Black & Decker Corporation (B&D), shares his insights regarding B&D’s global new product strategy and discusses the development of the B&D SnakeLight Flexible
ences of consumers in the focal countries. Differences in religion, culture, education. income, living conditions, and so on are important. 2. Do not try to standardize a product more than required or desirable. Not a11consumers have the same needs and wants. Standardization is only possible to the extent that consumer have similar preferences. 3. Global new product development teams are important for success.These are multifunctional, multigeographic teams. Such teams bring expertise from their respective functions and geographic locations, and this expertise is essential to developing a winning global product. 4. Commitment from top management to developing new products is important to provide a global strategy, to remove roadblocks, to provide advice, and to allocate resources. DeveIoping
Technobgy with R&D Customers, Andrzej M. Pawlak, Research-Technology Management (September-October 1996). pp. 44 -47