Chapter 14 Entrepreneurship

Product Development

The process of modifying a current product or creating a new product → 7 steps

7 Steps of Product Development

• New product development strategy

• Idea generation

• Screening and Evaluation

• Business Analysis

• Development

• Test marketing

• Commercialization

1.) New Product Development Strategy

Create a strategy objective for the company

2.) Idea Generation

Focus on brainstorming sessions to come up with new, innovative ideas

3.) Screening and Evaluation

Compile the brainstorming list into smaller units to narrow ideas

4.) Business Analysis

Create financial expense and sales projections for the new product in the future

5.) Development

The new product idea has turned into a prototype and will undergo tests

6.) Test Marketing

Offer the product for sale in a small geographic area to test its success

7.) Commercialization

The new product is brought to market with full-scale production, sales, and marketing support

Prototype

A preliminary model of something

Outsourcing

Contracting a party outside the company to perform services and create goods that were traditionally performed in-house by the company’s own employees and staff

Benefits of Outsourcing

• Control costs

• Increase efficiency

• Reduce labor costs

• Reduce risks

• Start new projects quickly

Development Team

A team working collectively for developing or creating new products

Innovation

A new idea, device, method, or way of doing something that enhances the lives of users

Production Costs

The costs incurred by a business when manufacturing a good or providing a service

Concept Testing

The process of performing tests and surveys to evaluate a new product idea prior to the introduction to the market

Automation

The process of using automatic equipment or technologies instead of human labor to perform business processes

Quality Control

A system put in place to maintain certain standards of output

Productivity

An economic measure of output to measure the efficiency or units of output

Logistics

A detailed organization of complex operations involving many people, destinations, and supplies

Growth Plan

The practice of setting goals and creating strategies and tactics to accomplish them