Topics: Product management, Product life cycle management, Variable cost Pages: 7 (2284 words) Published: March 26, 2013
Chapter 5- GLOBAL COMPANY PROFILE: Regal Marine world’s 3rd largest boat manufacturer; Regal uses CAD computer aided design; Regal uses JIT inventory to deliver parts as needed. GOODS & SERVICES SELECTION: The good or service provided is basis for an organization’s existence and the key to success; To maximize success, companies focus and concentrate on few products; Companies must look constantly for new products to design; Product Decision- to develop, implement a product strategy that meets the demands of the marketplace with a competitive advantage; Product strategy is 1 of 10 decisions of OM and focuses on developing a competitive advantage thru differentiation, low cost, rapid response, or combination of these. PRODUCT STRATEGY OPTIONS: Product Selection- the choosing of good or service to provide customers or clients; Differentiation- by offering a distinctly unique and high quality product; Taco Bell- has developed a low cost and high value product line; Toyota- a rapid response to changing customer demand; PRODUCT LIFE CYCLES: Intro Phase- the product is being fine-tuned for market, negative cash flow due to research, product development, process modification, and supplier development; Growth Phase- product design is stabilizing, requires effective forecasting of capacity requirements; Maturity Phase- high sales revenue, competitors are established, improved cost control, reduction in options of product line necessary for profitability and market share; Decline Phase- Sales and profits decreasing, can invest to bring good products up, otherwise terminate; Strategies change as products move through life cycle and successful strategies determine best strategy for product on its life cycle stage. PRODUCT-BY-VALUE ANALYSIS- Pareto Principle- focus on critical few, not trivial many; Product by Value Analysis- lists products in descending order of their individual dollar contribution, lists total dollar contribution of product; Contribution- the difference btw direct cost and selling price; NEW PRODUCT OPPORTUNITIES- Understand Customer-the premier issue in new-product development, lead users are ahead of market trends and their needs lead to product development; Economic Change- increasing levels of affluence in long run, but price changes in short run; Sociological & Demographic; Technological; Political/legal Change. PRODUCT DEVELOPMENT- the product development system links product decisions with cash flow, market dynamics, product life cycle, and organization’s capabilities, the system consists of 1. Ideas from many sources, 2. Does firm have ability to carry our idea?, 3. Customer requirements to win orders, 4. Functional Specifications (How will product will be made) 5. Product specifications (how the product will be made) 6. Design rewiew, 7. Test Market, 8. Intro to Market. QUALITY FUNCTION DEVELOPMENT (QFD): QFD- determine what satisfies customers and translate desires to target design that each functional area can understand and act on; House of Quality- a graphic technique for defining the relationship btw customer desires and product and it is the first step in building a world class production system, 1. ID customer wants 2. ID how good/ service will satisfy wants 3. Relate customer wants to product hows 4. ID relationships btw firm’s hows 5. Develop importance ratings 6. Evaluate competing products 7. Determine desirable technical attributes, your and competitors performance; QFD also shows how quality effort will be deployed; QFD effort is devoted to meeting customer requirements with design characteristics; ORGANIZING 4 PRODUCT DEVELOPMENT: 1st Approach- traditional US approach of an organization with distinct departments, advantage is fixed duties & responsibilities, disadvantage is lack of forward thinking; 2nd Approach- popular approach, assign a product manager to champion product thru product development system; 3rd Approach- the best product development approach used in US, use of...
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