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NEW PRODUCT MANAGEMENT

Open Posted By: ahmad8858 Date: 26/04/2021 Graduate Assignment Writing

You will read assigned chapters  and provide examples to chapter concepts from Costco.

Company Information:

Company: Costco Wholesale Corporation

CEO: Walter Craig Jelinek 

Year Founded: 1983

Headquarters: Issaquah, WA

FY20 Revenue: $122.14 Billion

Employees: 214,000

Description: “Costco is a membership only warehouse which generates a majority of its revenue from retail sales and a small percentage from membership fees.” (Wikipedia)

Category: Engineering & Sciences Subjects: Chemistry Deadline: 12 Hours Budget: $120 - $180 Pages: 2-3 Pages (Short Assignment)

Attachment 1

PART FOUR
DEVELOPMENT

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Development

Figure IV.1

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Chapter 13
Design

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What Is Design?

  • Has been defined as “the synthesis of technology and human needs into manufacturable products.”
  • In practice, design can mean many things, ranging from styling to ergonomics to setting final product specifications.
  • Design has been successfully used in a variety of ways to help achieve new product objectives.
  • One thing it is not: an afterthought; “prettying up” a product that is about to manufactured!
  • “Beautiful is not enough. The product must be useful. Design includes the whole human interface.” (Ken Munsch of Herman Miller)

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The Role of Design at Apple

  • Firms such as Apple, judged high in design effectiveness, have superior returns on sales, net incomes, and cash flows.
  • Apple routinely praised for the modernistic, intuitive designs of iPads, iPhones, and other devices.
  • Clean, simple appearance of Apple devices directly traceable to the ‘60s record players and radios of German designer Dieter Rams.
  • Design is certainly not an afterthought at Apple!

Design-Driven Innovation

  • “Design introduces a bold new way of competing. Design-driven innovations do not come from the market; they create new markets. They don’t push new technologies, they push new meanings.” (Design expert Roberto Verganti)
  • In design-driven innovation, design itself has the leadership role (unlike market-pull or technology-push innovation).
  • Product functionality is as important to excellent design as is appearance or aesthetics.

Contributions of Design to the New Products Process

Figure 13.1

  • Design for Speed to Market (Ingersoll-Rand Cyclone Grinder)
  • Design for Ease of Manufacture (IBM Proprinter)
  • Design for Differentiation (Haworth and Steelcase office equipment)
  • Design to Meet Customer Needs (“user oriented design”) (Crown Equipment Rider Counterbalance forklift trucks)
  • Design to Build or Support Corporate Identity (Apple, BMW)
  • Design for the Environment (Subaru, Apple)

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Principles of Universal Design

  • Equitable Use: The design is useful to people with varied abilities.
  • Flexibility in Use: The design accommodates a wide variety of preferences.
  • Simple and Intuitive to Use: The design is easy for anyone to understand.
  • Perceptible Information: The design communicates the required information to the user.
  • Tolerance for Error: The design minimizes adverse consequences of inappropriate use.
  • Low Physical Effort: The design can be used efficiently by anyone with minimal fatigue.
  • Size and Space for Approach and Use: The product is easy to reach, manipulate, and use.
  • Source: James M. Mueller and Molly Follette Story, “Universal Design: Principles for Driving Growth Into New Markets,” in P. Belliveau, A. Griffin, and S. Sodermeyer (eds.), The PDMA Toolbook for New Product Development (New York: Wiley, 2002), pp. 297-326.

Figure 13.2

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Range of Leading Design Applications

Purpose of Design

Aesthetics

Ergonomics

Function

Manufacturability

Servicing

Disassembly

Item Being Designed

Goods

Services

Architecture

Graphic arts

Offices

Packages

Figure 13.3

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Product Architecture

  • The process by which a customer need is developed into a product design.
  • Solid architecture improves speed to market, and reduces the cost of changing the product once it is in production.
  • Product components are combined into “chunks,” functional elements are assigned to the chunks, and the chunks are interrelated with each other.

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Product Architecture Illustration

Figure 13.4

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Product Architecture and Product Platforms

  • Product architecture development is related to establishing a product platform.
  • If chunks or modules can be replaced easily within the product architecture, “derivative products” can be made from the same basic platform as technology, market tastes, or manufacturing skills change.
  • Examples: 200 versions of the Sony Walkman from four platforms.

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Assessment Factors for an Industrial Design

Figure 13.5

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Prototype Development

  • Comprehensive Prototype: complete, fully-functioning, full-size product ready to be examined by customers.
  • Focused Prototype: not fully functioning or developed, but designed to examine a limited number of performance attributes or features.
  • Examples: a crude, working prototype of an electric bicycle; a foam or wood bicycle to determine customers’ reactions to the proposed shape and form.

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Model of the Product Design Process

Figure 13.6

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Improving the Interfaces in the Design Process

  • Co-location
  • Digital co-location
  • Global teams
  • Produceability engineer
  • Upstream partnering with vendors

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Computer-Aided Design (CAD)

  • Greatly accelerates the design step and allows assessment of multiple possible designs without building expensive prototypes.
  • Design for Manufacturability (DFM): search for ways to minimize manufacturing costs.
  • Design for Assembly (DFA): search for ways to ease assembly and manufacture.
  • Rational for DFM: A seemingly trivial detail in design phase might have huge manufacturing cost consequences later on!

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Some of the Uses of CAD in Auto Industry

  • Determining fit of subassemblies: does the radio/CD player protrude too far into the engine area?
  • Facilitating “decking” of cars (attaching the powertrain to the upper body): do all the pieces fit together perfectly?
  • Crashworthiness: can we modify any aspects of the car’s design to improve its ability to protect the passengers in a crash?

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Newer Developments in CAD

  • Stereolithography (rapid prototyping)
  • Mechanical computer-aided engineering (MCAE)

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Attachment 2

Chapter 12
Product Protocol

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A Marketing-R&D Conversation

MKTG: We’re going to be needing a solar-powered version of our standard garage door opener, soon.

R&D: How reliable should it be? Should it be controllable from inside the house? Should we use new electronics technology? Should it be separate from the collector system already installed?

MKTG: Well, you’re the technical people, make some recommendations.

R&D: In other words, you don’t know what you want.

MKTG: Cripes, do we have to tell you everything? What do you do for a living? How should we know where the collectors should be located?

R&D: If we go electronic, you’ll say it’s too expensive. If we go electric, you’ll say we’re living in the ‘30s. Wherever we put the collectors you will say we are wrong. If we guess, you second-guess.

MKTG: OK. Put the collectors on the garage roof.

R&D: That probably can’t be done.

Figure 12.1

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One Solution: Toyota’s Oobeya Room

  • Big room to accommodate all team members for a new product project.
  • Prototype (model, mock-up, or drawing) is in center of room.
  • All around the room are boards to guide discussion (objectives, metrics, action, decomposition into sub-projects, critical problems and issues).
  • Team leader sets targets and controls meeting.
  • Team members all make short presentations (under three minutes).
  • No time for loafing! Total meeting time is under one hour.

Why Have A Protocol?

  • Also known as product requirements, product definition, deliverables, etc.
  • Doesn’t it seem obvious and simple?
  • Actually is one of the top success factors distinguishing winning from losing projects.
  • Maybe because it involves more than technical aspects.

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Purposes of Protocol

  • To determine what marketing and R&D groups need to do their work.
  • Think concept life cycle: this is more than a simple concept statement, yet less than we will have when the first prototype is available.
  • Try to identify the key deliverables at this point.
  • To communicate essential to all players and integrate their actions, directing outcomes consistent with the full screen and financials.
  • To set boundaries on development process or cycle time.
  • To permit the development process to be managed (i.e., what needs to be done, when, why, how, by whom, whether).

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Contents of a Product Protocol

  • Target market
  • Product positioning
  • Product attributes (benefits)
  • Competitive comparison
  • Augmentation dimensions
  • Timing
  • Marketing requirements
  • Financial requirements
  • Production requirements
  • Regulatory requirements
  • Corporate strategy requirements
  • Potholes

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Narrow Version of Protocol: End-User “I Want” List

This is the “I Want” list for a new lawn leaf blower /vacuum. These are benefits -- how they are achieved is determined during development.

  • Manufacturer stands behind product -- two year full warranty.
  • Electrically and mechanically safe. Good value and lasts a long time -- top quality component parts, state-of-the-art manufacturing.
  • Makes yard clean-up easier -- most powerful blower you can buy.
  • Converts from blower to vacuum without tools.
  • Electrical cord does not come loose.
  • Can be used with existing extension cord.
  • Easy to maneuver.
  • Clog-free vacuuming.
  • Tubes go together and stay together.

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“I Want” List for the Hapifork

  • Same shape and weight as a regular fork; handle should not be much bigger than normal.
  • Emits a signal if the person is eating too quickly.
  • Washable and dishwasher safe.
  • Resistant, not fragile.
  • Comes in a wide variety of colors to match any décor.
  • Can connect via Bluetooth or USB to other devices to record and track progress.
  • Easy to use.
  • Comes with information on diet and exercise.

Consider that these are stated as benefits, and that some of these might conflict!

Protocol Stated as Benefits: BuiltNY

  • Product concept: carrier for two wine bottles.
  • Customer benefits:
  • Protective, insulating, ergonomic, lightweight, reusable, inexpensive, flexible (easy to fold)
  • Result: neoprene wine bottle carriers (inexpensive, easy to cut and dye into designer colors).
  • Spinoffs included beer carriers and baby-bottle carriers.

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A Sample Protocol: Trash Disposal System

  • Must automate trash disposal at factory cost not to exceed $800.
  • Clean, ventilated, odor-free, no chance of combustion.
  • Must be safe enough to be operated by children; outside storage safeguards against children and animals.
  • Size must be small enough to work as kitchen appliance, to provide easy access and eliminate need for double handling of trash.
  • Simple installation
  • Decor adaptable to different user tastes.
  • If design requires opening of exterior walls, structural integrity and insulation against elements must be maintained.
  • User-friendly, automatic operation, easy to maintain by technical servicepeople.

Figure 12.3

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Protocol and the Voice of the Customer

  • VOC: complete set of customer wants and needs, expressed in customer’s own language, prioritized in terms of importance and performance.”
  • No scientific jargon.

Gathering the Voice of the Customer

  • 20 or 30 45-minute interviews produce 90-100% of customer needs.
  • Audio recording and transcription.
  • Statements grouped into 15-25 affinity groupings, prioritized by importance to customer.
  • Don’t ask “what are your needs or requirements” as this will give you “better sameness,” not revolutionary new products.
  • Ask about experiences or desired outcomes: “What are the most difficult tasks? What do you like and dislike? What was your worst experience?”

Steve Jobs’ Quote on VOC

It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them. … You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”

So does this mean we should forget about VOC?

Steve Jobs on the iPod Touch

“Originally we weren’t exactly sure how to market [it]. … Was it an iPhone without the phone? Was it a pocket computer? … What customers told us was, they started to see it as a game machine. We started to market it that way, and it just took off. And now what we really see is it’s the lowest-cost way to the App Store, and that’s the big draw. So … we were focused on [getting] the price down where everyone can afford it.”

  • So Apple was not asking the customers what they want. They were listening to desired outcomes and how the product provided those outcomes.
  • Recall from PIC: the technology dimension must match a viable market dimension.

Use and Misuse of VOC

  • It is not qualitative research only. The value comes from organizing, clustering, and prioritizing the needs by importance.
  • Do not talk to major customers only. Non-customers, average customers, and customers loyal to the competitor can provide valuable information.
  • Remember that customers are very good at stating their needs, even though they are not professional engineers and usually cannot tell what technology should be used (reason to use QFD).
  • Key lesson: don’t ask customers about what they want. Ask about what outcomes they want to see in the future.

Quality Function Deployment (QFD)

  • A technique designed to insure that customer needs are focused on throughout the new product project.
  • First step is the House of Quality (HOQ): gathers desired attributes from customers and translates them to engineering characteristics.
  • Requires inputs from marketing and technical personnel; encourages communication and cooperation across the functional areas.

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Protocol Within the New Products Process

End User  Market Contact  New Product Group  R&D Contact  Engineers

Unmet Needs Inventory of Statement of Needs to Benefits to How to Deliver the

And Problems Needs Be Fulfilled by Product Deliver Requested Benefits

Benefit to Feature Conversion

(Specs)

Finished Prototype Evaluate Prototype; R&D Delivers Features Delivered;

Product Confirmed Further Development Prototype Lab Assesses Performance

End User  Market Contact  New Product Group  R&D Contact  Engineers

Figure 12.5

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QFD and Its House of Quality

Figure 12.6

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Benefits in QFD Example

  • Compatibility
  • Print quality
  • Ease of use
  • Productivity

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Technologies in QFD Example

  • Postscript compatible
  • Resolution
  • Edge sharpness
  • Duplex printing
  • Hours training required
  • Speed (text)
  • Speed (graphics)

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Tradeoffs in QFD Example

  • Improving resolution slows down text printing and really slows down graphics printing.
  • Increasing edge sharpness slows down both text and graphics printing.
  • Duplex printing speeds up text and graphics printing.
  • Postscript compatibility improves resolution and edge sharpness.

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House of Quality:

Source: Adapted from John R. Hauser and Don Clausing, “The House of Quality,” Harvard Business Review, May-June, 1988.

Moving to Later Stages of QFD

Figure 12.7

Engineering Characteristics

Parts Characteristics

Parts Characteristics

Process Operations

Process Operations

Production Requirements

Customer Attributes

Engineering Characteristics

Parts Deployment:

Process Planning:

Production Planning:

Converted to:

Converted to:

Converted to:

Converted to:

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QFD Realities

  • Substantial cost and time commitment.
  • Only mixed results in some applications.
  • Requires top management support and commitment.
  • Must be viewed internally as an investment.
  • Requires good functional integration.
  • May work better if the team members have a successful track record of working together before.

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Improving QFD Efficiency

  • Concentrate on only some of the Engineering Characteristics: the most critical, or the ones where improvements are easy to accomplish.
  • Organize the Engineering Characteristics into groups, and designate responsibility to functional areas.
  • Do cost-benefit analysis on each Engineering Characteristic to determine which provide the greatest benefit relative to cost of improvement.

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Attachment 3

Chapter 14
Development Team Management

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Options in New Products Organization

1. Functional: work is done by the various departments, very little project focus.

  • Usually a new products committee or product planning committee.
  • Does not lead to much innovation.

2. Functional Matrix: A specific team with people from various departments; project still close to the current business.

  • Team members think like functional specialists.
  • Departments call the shots.

3. Balanced Matrix: Both functional and project views are critical.

  • May lead to indecision and delay.
  • Many firms are making it work successfully.

4. Project Matrix: Team people are project people first and functional people second.

  • People may drive the project even against department’s best wishes.

5. Venture: Team members pulled out of department to work full time on project.

These are listed in increasing projectization, defined as the extent to which participants see themselves as committed to the project.

Other terms are lightweight vs. heavyweight: “heavier” means greater projectization.

Figure 14.1

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Examples of Venture Teams

  • Lockheed’s “Skunkworks” was spun outside of the company so that researchers could concentrate on key innovation targets.
  • BMW sent designers from California and Munich to their “Bank” design center in London to learn Rolls-Royce culture and develop the Phantom.
  • The BMW Z4 sport coupe was similarly designed by a dedicated venture team.

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Difficulties with Venture or Matrix Structures

  • Many firms have moved back to a more lightweight approach after finding venture teams were difficult to establish and/or manage.
  • Matrix structures are notoriously difficult to manage, can get very complex, and can incur high overheads (where does first priority lie, with the team or the function?)
  • In the extreme, matrix structures can even be detrimental to innovation.
  • Encouraging cooperation among team members is most important.

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Considerations when Selecting an Organizational Option

  • High projectization encourages cross-functional integration.
  • If state-of-the-art functional expertise is critical to project success (e.g., in a scientific specialty such as fluid dynamics), a functional organization might be better, as it encourages the development of high-level technical expertise.
  • If individuals will be part of the project for only a short time, it might make more efficient use of their time if they were organized functionally. Industrial designers may be involved in any given project for only a short time, so different projects can simply draw on their expertise when needed.
  • If speed to market is critical, higher projectization is preferred as project teams are usually able to coordinate their activities and resolve conflicts more quickly and with less bureaucracy. PC makers often use project teams, as they are under severe time pressure.

Figure 14.2

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Integrated Product Innovation in a Functional Organization: Toyota

  • Toyota retains a functionally based organization, while successfully integrating product innovation, by doing the following:
  • Stressing written communication across functional areas.
  • Close, mentoring relationship for new hires.
  • “Chief engineers” are lead designers on new car projects; teams of engineers fill in the details.
  • In-house training, with rotation through different functional areas.
  • Simple, straightforward work processes.
  • Design standards promote predictability.

Who Are the Team Members?

  • Core Team: manage functional clusters (e.g., marketing, R&D, manufacturing)
  • Are active throughout the new products process.
  • Ad Hoc Group: support the core team (e.g., packaging, legal, logistics)
  • Are important at intervals during the new products process.
  • Extended Team Members: less critical members (e.g., from other divisions)

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Building a Team

  • Establishing a Culture of Collaboration
  • Team Assignment and Ownership
  • Empowered product champion
  • Selecting the Leader
  • A good general manager
  • Selecting the Team Members
  • Core and extended team members

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Roles and Participants

  • Project Manager
  • Leader, integrator, mediator, judge
  • Translator, coordinator
  • Project Champion
  • Supporter and spokesperson
  • May be the project manager
  • Enthusiastic but play within the rules
  • Sponsor
  • Senior executive who lends encouragement and endorsement to the champion
  • Rationalist
  • The “show-me” person
  • Strategist
  • Longer-range
  • Managerial -- often the CEO
  • Spelled out the Product Innovation Charter
  • Inventor
  • Creative scientist
  • “Basement inventor” -- may be a customer, ad agency person, etc.
  • Idea source

Figure 14.3

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Myths and Truths About Product Champions

The Myths:

  • Champions are associated with market successes.
  • Champions are excited about the idea.
  • Champions get involved with radical changes.
  • Champions arise from high (or low) levels in the firm.
  • Champions are mostly from marketing.

The Truths:

  • Champions get resources and keep projects alive.
  • They are passionate, persuasive, and risk-taking.
  • Champions work in firms with or without formal new product processes. Champions are sensitive to company politics.
  • Champions back projects that align with the firm’s innovation strategy.

Figure 14.4

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Managing the Team: New Product Process Implementation

  • Clarity of goals: Ensure shared vision, common focus, and excellent communication across team members.
  • Ownership: Team members can make a difference; their identity is tied to the project outcome. Provide rewards and recognition.
  • Leadership at senior and team levels: Senior management visibly supports new products; team level leadership can be support, facilitation and encouragement.
  • Integration with business processes: the inputs and outputs of all upstream activities are linked to new product development; facilitated by central business process organization.
  • Flexibility: in terms of number of projects underway, length of time devoted to each stage, etc.

Figure 14.5

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Issues in Team Management

  • Cross-functional interface management
  • Overcoming barriers to market orientation (information flow across functional areas)
  • Ongoing management of the team
  • Team compensation and motivation
  • Monetary vs. non-monetary rewards?
  • Process-based vs. outcome-based rewards?
  • Closing the team down

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Common Rewards to Motivate Teams

  • Project completion celebrations
  • Opportunity to work on a bigger and more meaningful project
  • Writeup in company newsletter
  • Plaques and pins
  • Award dinners

Source: CPAS 2003 study.

Guidance in Setting Rewards

  • Drawbacks to totally financial rewards: lazy team members also benefit; reward may not match the value of the idea to the firm.
  • Align reward structure to project characteristics: for less complex projects, tie reward to profit outcome; for riskier ones, tie reward to processes (procedures, behaviors, completion of phases).
  • Consider milestone rewards to boost team spirit.

Team Rewards in Action

  • TRW’s Project Elite: specific goals are set for team projects and for each individual; 10-25% of pay tied to accomplishing these goals.
  • DuPont “360-degree” review process: team members evaluated by peers, subordinates, and supervisors.
  • Motorola: rewards team behavior and not only results; rewarding only results leads to risk aversion.

Five Conflict Management Styles

Figure 14.6

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Conflict Management Style

Definition

Example

Confrontation

Collaboratively solve the problem to reach a solution the parties are committed to.

Debate the issue, conduct customer interviews, generate possible solutions, find the one most supported by customers.

Give and Take

Reach a compromise solution that the parties find acceptable.

Negotiate a set of features to build into the product, to keep the project moving ahead.

Withdrawal

Avoid the issue, or the disagreeable party.

Team members with unpopular positions don't think it's worth the trouble, and back out of the decision.

Smoothing

Minimize the differences and find a superficial solution.

Accommodate to the team members that are strongly committed to certain product features, for the sake of group harmony.

Forcing

Impose a solution.

Project manager steps in and makes the decisions.

Source: Adapted from David H. Gobeli, Harold F. Koenig, and Iris Bechinger, "Managing Conflict in Software Development Teams: A Multi-Level Analysis," Journal of Product Innovation Management, Vol. 15, No. 5, September 1998, pp. 423-435.

Closing the Team Down

Alternative strategies:

  • Close the team out early; gradually bring in operating people to turn product back over to the firm.
  • Team stays involved and prepares for the marketing (writes plan and trains people), but then turns the product over to the firm for launch. Key team players stay in close contact.
  • Team actually markets the product and may even manage the product as a new company division (rare).

Virtual Teams

  • Teams that are linked electronically using collaboration software.
  • Can communicate despite geographic dispersion.
  • Synchronous or asynchronous mode.
  • Challenges:
  • Team members comfortable with technology
  • Performance measurement and control
  • Poor fit with firm values or cultures
  • Firms may couple traditional plus virtual meetings to avoid some of these issues.

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Managing Globally Dispersed Teams

  • Reasons for growth:
  • Increasing product complexity
  • Accelerated product life cycles
  • Multicultural group should lead to greater creativity and problem solving, as long as communication barriers can be overcome
  • Issues:
  • Levels of language skills among team members
  • Physical distance among team members
  • Cultural differences among team members
  • Difficulties in competing design reviews

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Successful Virtual Global Teams

  • Boeing: used Web-based systems to integrate rocket engine designers and partner firms across several locations worldwide.
  • Xerox uses the Web to integrate designers in Rochester, NY, engineers in Shanghai, and manufacturing plants in Hong Kong.
  • Ford uses global platforms to support multiple brands where each group does the engineering on one system for all vehicles (one group does, for example, the exhaust system for all cars sold globally on the same platform). Ford claims to have achieved 60% savings in engineering costs as well as successful launches.
  • Digital’s global team has members in U.S. (several locations), Switzerland, France, and Japan; uses audioconferencing for early, casual discussion followed by computer conferencing at stages.

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Supporting Diversity in Global Teams

  • Philips: job rotation where employees are sent to foreign locations and work in different functional areas, for a 5-7 year period.
  • Schering: technical people are moved between research centers in Berlin and Richmond.
  • Kao (Japanese chemical company) shuttles workers between Japan and Germany; does predevelopment of hair care products in Tokyo and development in Darmstadt.

Insights on Global Innovation From Senior Executives

  • Idea Generation:
  • Leverage global knowledge.
  • Source ideas from customers, employees, distributors, etc.
  • Product Development:
  • Focus on incremental vs. home run breakthroughs.
  • Share development costs.
  • Use standardization to better manage global operations.
  • Commercialization:
  • Early vs. late entrant decision.
  • Consider local support/local partner.

Figure 14.7

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Conflict Management Style Definition Example

Confrontation Collaboratively solve the

problem to reach a solution

the parties are committed to.

Debate the issue, conduct

customer interviews, generate

possible solutions, find the one

most supported by customers.

Give and Take Reach a compromise solution

that the parties find

acceptable.

Negotiate a set of features to

build into the product, to keep

the project moving ahead.

Withdrawal Avoid the issue, or the

disagreeable party.

Team members with

unpopular positions don't think

it's worth the trouble, and back

out of the decision.

Smoothing Minimize the differences and

find a superficial solution.

Accommodate to the team

members that are strongly

committed to certain product

features, for the sake of group

harmony.

Forcing Impose a solution. Project manager steps in and

makes the decisions.

Source: Adapted from David H. Gobeli, Harold F. Koenig, and Iris Bechinger, "Managing Conflict

in Software Development Teams: A Multi -Level Analysis," Journal of Product Innovation

Management, Vol. 15, No. 5, September 1998, pp. 423 -435.