Merck and Company
The business environment of the 21st century is very different from the business environment 200 years ago. Since the Industrial Revolution until today, businesses have developed more and more products to meet the needs of an ever increasing world population. The cycle of business has been changed dramatically since the invention of the Internet, which has shortened the selling cycle and made it more convenient for consumers to shop from the comfort of their own homes . When online shopping, consumers are more likely to purchase a product spontaneously, or discard products more frequently, which results in a need for more products to purchase. The new product development process is essential to all businesses because the potential for profit is so large in today’s consumption- based society. Products are developed quickly and merchandise is sold in a short period of time after production, thus generating revenue in a very short period of time. This shortened selling cycle requires a detailed and efficient process which is able to guide the organization through the six new product development steps which include: idea creation, idea screening, project planning, product development, test marketing, and commercialization (Donnelly, P.J., 2011). The new product development process at Merck and Company is a good example of an efficient and reliable process. Merck’s ability to create great products for the needs of their customers has allowed the company to gain a competitive advantage in the pharmaceutical market. Idea Generation
Idea creation is the first component of the new product development process. Companies must identify specific needs of their clientele and create ideas for new products. Many times, a preliminary analysis of the Strengths, Weaknesses, Opportunities and Threats is completed to determine needs. At Merck and Co., idea creation is usually the result of the identification of a sociological, epidemic, pandemic or common need (Merck and Company Research, Discovery and Development (n.d)). Merck and Co. then develops solutions to specific illnesses or conditions. Many businesses use customer surveys and input from departments within the organization to identify potential ideas. Ideas for new products can come from any source. Most companies obtain ideas from front line staff and customers. These companies usually have more than one avenue by which ideas or suggestions can be communicated to the company. However, it is not uncommon for organizations to get ideas from competitors, market research, and professional resources (Donnelly, P.J.,2011).
After a disease or condition is identified, researchers at Merck and Company begin searching for possible solutions to destroy or treat the condition. At times, ongoing research is also presented to the company as possible projects to pursue. Customer feedback and feedback from doctors are important in refining already developed pharmaceutical products; meanwhile, intense screenings of research projects and ideas from the scientific and health community are more important in developing new products. Scientists with independent labs can apply for funds with pharmaceutical companies if they can present relevant data stating that the research is pertinent in the health community (Donnelly, P.J.,2011). Idea Screening
After multiple new ideas for products are generated, the organization must then begin the second step of the new product development process, idea screening. In this step, organizations analyze the possible alternatives and identify specific products to produce based on other factors such as budget, profit potential, and market potential. Often times there are projects which are profitable, however, the organization decides not to begin mass production based on resources available to complete production or current market trends (Donnelly,...