Stage 1 - Opportunity Identification and selection

What is the 1st phase of the New Product Development (NPD) process?

Opportunity Identification and Selection (OIS)

What is the main goal of OIS?

To discover + prioritise viable innovation opportunities aligned with firm’s strategy.

What is the Product Innovation Charter (PIC)?

Strategic document that sets boundaries + goals for NPD efforts.

Name 2 types of sources for opportunity identification.

Internal + external sources

Give 1 internal source of opportunities.

• Staff suggestions or internal idea campaigns

Give 1 external source of opportunities.

Customer complaints or feedback

What does the PIC include?

• Background

• Focus

• Goals

• Strategic guidelines

Why do firms use a PIC?

To guide NPD teams

with clear market + technology directions.

What are the key criteria for screening opportunities?

• Strategic fit

• Feasibility

• Scalability

• Market potential

What is a new-to-the-firm product?

Product that is new to the company but not to the market

EG: Nature Valley originally only made granola cereal but later granola bars - eaten “on the go.”

What is an example of a new-to-the-world product?

iPhone introduced in 2007

or Polaroid camera

What are line extensions?

New variants in an existing product line (e.g. Coke cherry, diet coke)

What tool helps estimate the potential of an opportunity financially?

Sales forecasting models (e.g. ATAR)

What is the ATAR model?

A forecasting model

• Awareness
  Will people know the product exists?

• Trial
  Will they try it at least once?

• Availability
  Can they find and buy it easily?

• Repeat
  Will they buy it again?

What is the strategic importance of OIS?

It reduces risk by focusing development on high-potential areas.

What is disruptive innovation?

Innovation that creates new markets and displaces existing ones.

What type of user is crucial in early trend spotting?

Lead users

What is a lead user?

identifies issue before majority

strong incentive to solve them.” (Eric)

in NPS - They predict future trends — their problems today become common problems later

What is strategic opportunity scanning?

exploring external trends to find innovation ideas that fit a company’s long-term goals.

How did Starbucks use strategic opportunity scanning?

• Continuously monitoring cultural trends

• Tracking social media

• Gathering customer feedback

• Through initiatives like My Starbucks Idea, they crowdsourced ideas from customers/employees to uncover unmet needs + new opportunities.

What is a key risk of missing OIS?

Investing in products that don’t meet real market needs

What is 1 challenge of OIS?

strategic goals vs creativity

Firms often face a tension: they want big, bold ideas, but they also need those ideas to fit their strategic goals.

finding the sweet spot between encouraging creativity and sticking to strategic direction — so innovation is both exciting and viable.

What kind of innovation aligns best with OIS?

Both incremental and radical, if strategically screened

What does incremental and radical innov mean?

Incremental innovation = small improvements to existing products (e.g. new flavour, better packaging)

Radical innovation = introduces a completely new concept or technology that creates a new market or significantly changes consumer behaviour (e.g. the first iPhone or electric car).

Why is cross-functional input important at this stage?

Ensure feasibility (is it practical?) from the start