Developing and designing great products are keys to success in business. Anything less than an excellent product strategy can be destructive to a firm. Top companies' focus on few products and concentrate on maintaining a high level of quality for those products
to maximize the potential for success.
For instance Honda's focus is
engines. Virtually all of Honda's sales e.g. autos, motorcycles, generators, lawn mowers, are based on its excellent engine technology. Likewise, Intel's focus is on computer chips, while Microsoft's is on PC software.
However, most products have a limited and even predictable life cycle and companies must be constantly looking for new products to design, develop and take to market. Good operations managers insist upon strong communication between customer, product, processes, and suppliers that results in a high success rate for their new products. One product strategy is to build particular competence in customizing goods or services. This approach allows the customer to choose product variations while reinforcing the organization's strength. Dell Computers, for example, has built a huge market by delivering computers with the exact hardware and software desires by the end user. And Dell does it fast - it understands that speed to market is imperative to gain a competitive edge.
Many service firms also refer their offerings as products. So while the term products may often refer to tangible goods, it also refers to offerings by service organizations. An effective product strategy links product decisions with investment, market share, product life cycle, and breadth of the product line. The objective of the product decision is to develop and implement a product strategy that meets the demands of the market place with a competitive advantage.
Goods and services selection is very important. How management selects those?
Marketers see product research as the first stage in Product Life Cycle Management. Product research is a business and engineering term which describes the complete process of bringing a new product to market. There are two parallel aspects to this process: - Types of New products
There are several types of new products. Some are new to the market, some are new to the firm, and some are new to both. Some are minor modifications of existing products while some are completely innovative. These are displayed in the following diagram.
Management has many options in the selection, definition, and design of goods and services. Product selection is choosing the good or service to provide customers or clients. For instance, hospitals specialize in various types of patients and various types of medical procedures. They select their product when they decide what kind of hospital to be. A hospital's management may decide to operate a general-purpose hospital, a maternity hospital, or even a hospital specializing in heart diseases. Numerous other options exist for hospitals, just as they exist for restaurants and automobile companies.
Product decisions are fundamental and have major implications throughout the operations function. They influence capital equipment cost, layout design, space requirements, the skills of people hired and trained, materials, and the processes used. Factors Influencing Selection
Product selection, definition, and design take place on a continuing basis because so many new product opportunities exist.
Five factors influencing market opportunities are: -
Economic change which brings increasing levels of affluence in the long run but economic cycles and price changes in the short run. For instance, in the long run, more and more people can afford an automobile, but in the short run, a recession may alter the demand for automobiles.
Sociological and demographic change, which may appear in such factors as decreasing family size. This alters the size preference for homes, apartments, and...