Sebastian Perrier

1. MISSION
2. VISION
3. The Environment (PESTEL Analysis)
4. The Industry (Porter 5 Forces Analysis + Supply Chain Analysis)
5. Business Level Strategy (Value Chain Analysis “Recourses and Capabilities” + B-C = Competitive Advantage “cost leader vs differentiation”)
6. Set-up Objectives
7. Develop Financial Projections
8. Establish Action Plan and Risk Assesments
9. Corporate Level Strategy (portfolio diversification + vertical integration (define the scope of the firm) + Geographical strategy “Global vs Multinational’)
10. Innovation

8-Stage Process for New Product Development (NPD)

1. Have in place an overall NPD Strategy: what’s your goal? priorities? resources?
2. Idea Generation: does not have to be something new to the world; sources of ideas can be: brainstorming, customers, competitors, salespeople, distributors, etc).
3. Screening: create criteria to evaluate their commercial worth.
4. Concept testing: allow the view of target customers into an early stage.
5. Business analysis: develop formal business plan and financial projections: sales, costs, profits and NPV (discounted at WACC), etc.
6. Product development: develop prototype and physical product to test its attributes, actual cost, durability, suppliers, etc.
7. Market Testing: test the new product in the market, see if marketing mix is effective in acquiring customers, make adjudgements.
8. Commercialization: formal launch of new product to mass-market.

Changing customer tastes, technological advances and competition => Innovate!

It is risky, most new product fail -> should tolerate failures; should be measured in number of successes and lessons learned.

Invention is different from an innovation. Invention is the discovery of new ideas or methods; innovation occurs when an invention is commercialized and brought to market. Innovation is not only about products, also about business models, processes, etc. Many success stories come from doing similar things in different ways; innovation is about finding better ways of meeting customer needs, it does not necessarily require a major breakthrough in technology.

• it is expensive, time-consuming and risky
• requires a corporate culture that promotes innovation (and doesn’t punish it)
• requires support from top management
• requires team-work: specially between the marketing (providing the user perspective) and R&D Department (providing the technical know-how)