New product development models represent the pipeline in which a company decides new products are necessary in order to maintain sustainability. Few companies actually start a new product model with little or no market information. A few different types of new product development models include business plans, product stages or gates, and a market entry approach. A business may decide to only use one model in order to reduce overall costs. Other times, the development model is based on the type of product a company produces or will produce in the near future.
Business plans are the most common method an entrepreneur uses to start a company. Established companies can use these plans, however, to establish new product development models over the life of the business. When a company looks to start a new product, it can create a completely new business plan to review the entire process from start to finish. In some cases, a company may need outside funding in order to create an entirely new division for the product. Here, a specific business plan helps the company secure these funds as the product development and other phases have inclusion in the report.
Companies may need to break down large product development processes into more manageable parts. These new product development models may use stages or gates in order to create separation among the different parts of the process. Different stages may be a discovery or idea, initial review or scoping, and creation of a business case, which then moves on to development and testing or validation of expected results. Once a company completes each stage, the new product is ready to hit the market, with certain expectations in mind by owners or executives. On the flip side, at any stage, the company can pull the plug on the idea and cut off development prior to the company wasting money on a potentially disastrous product.
A slightly different approach to new product development models is the change management style. Here, a company is expecting to make changes in goods or services at specified intervals over a given time period. At the planned stage, the company begins making changes to current operations in order to implement new product development models. This process ensures that, at some point in the future, product changes will increase demand for the company’s goods or services. Too much change management, however, can destroy a company and make it difficult to return to standard product production.
