New product development process for Apple

Executive Summary

In this report, we will study and critically evaluate the new product development practice for Apple Inc. We will perform a SWOT analysis,analyze their past and future business strategy for maintaining relevance in the technology industry and report evidence of the strategy implementation.

Introduction

When Apple’s first iPhone it was launched in 2007, the iPhone dis not perform well against benchmarks that were standard in the smartphone industry. This resulted to a sale of  1.5 million units in its first two quarters. Here is how the original iPhone stacked up against existing smartphone competitors, using measurements that were considered important at the time. The company begun to  introduced a product that was revolutionary in many aspects , but lacking in others. Apple  started a  well defined process of enhancing features and adding functionality to its products that satisfied  need of the customer (McDonald, 2012)

Apple’s product process has held a large  attraction for a number of years  because of its conventions . The company’s product development plan  does not include  releasing advanced  technologies each  year , rather, unique  innovations like  the iPad, iPod, iTunes, , and the iPhon  are released to the market to have an edge in the  market competition. Apple is no doubt the  worlds’ most innovative company that improves its  breakthrough  technologies and product by  adding  constantly features and functionality in those devices  that amuses  its customers.

Purpose  of the paper

The purpose of this paper is toexplore deeply the  framework of critical success factors, metrics, and tools and techniques for new product development in Apple inc.The paper will also look at the  implementing metrics for each stage of the new product development (NPD) process in the company . Finally,the paper  analyzes the  New product development  process in details  and  endeavor to identify ways in which organisation can improve their competitiveness  by  developing new products, mostly  by  the study of factors that are vital  to success. These factors are  identified through an indepth  study  and research of the practices and performance in product development of Apple inc.

Background

The new product development studies and research  emphasizes the importance of Releasing  new products on the market for continuing business success. Its contribution to the growth of the firms,  its influence on the revenue , and its role as a major  factor in business strategy  have been well documented and outlined. The NPD process consists of the activities carried out by firms when developing and launching new products. A new product that is introduced on the market evolves over a number of key  phases , beginning with an initial product concept or idea that is estudied, developed, tested and launched on the market (Sadler.2003).

Scope

This  paper outlines the new product development process for Apple , and its success factors, suggesting the  metrics that should be used to measure, and  also proposes tools and techniques to make use of these factors . This was conducted  at each phase  of the New Product Development  process, and put  together in a framework .

Methodology

To achieve this objective, a literature review was undertaken to investigate researchers and studies on  on new product development  success and how it can be achieved. These sinvestigations  were critically studied for common factors for companies  that enjoyed success of new products on the market like Apple

Assumptions

Many researchers and studies  have been conducted on new product development for many muiltinational companies, this research may  tend to be fragmented aon one or a number of crutial phases  of the new product development  process for Apple .

Research limitations

numerous research directions could provide extra useful information both to organisations  finding important  success factors and measuring product development success as well as to scholars  performing research in this area.The main research opportunity exists in

implementing or testing the new product development  framework.

Current New development process for Apple

Figure .1. Stages of New Product Development for Apple

  1. New Product Strategy –The strategy connects  the NPD process to firms  objectives and  provides insight  for  the  idea generation and guidelines for establishing  screening criteria.
  2. Idea generation– idea generation  Searches for product suggestions anf ideas  that meet firms plan
  3.  Idea Screening– This   involves an initial analysis to determine which ideas are pertinent and merit more detailed study.
  4. Business Analysis- It evaluates in depth the ideas on the basis of quantitative factors, such as sales volume ,profits and  Return on investment 
  5. Development-This is the Turning  of an  idea on  paper into a product that is tangible
  6. Testing – Testing involves  Conducting a  commercial experiments necessary to verify  customer views
  7. Commercialization-This is the  Launching of the  products to the ,market

The new product development practice process consists of the activities carried out by organization when developing and launching new products and services to the markets . New product that are  released on the market  undergo a number of  of phases , beginning with the first  product concept or idea that is evaluated, developed, tested and launched on the market.These phases can  also be  termed as a sequence of information gathering and evaluation stages. As  the new product develops, the firm  becomes i more informed  about the product and can revise  and change the  initial decision to undertake development or introduction of the product  The  information gathering   can lead to improved new product decisions on the  organization  by lminimising the risk levels and limiting  the resources used to products that eventually fail. New product development  process differs from a company to company  since it should be adapted to eachorganisation  in order to meet specific the firms  resources  and requirements (Stevens, 2002).

New product development framework for Apple Inc

Apple provides high quality and efficient  products that include the Apple logo, iPhone, iPod touch, iPad .These products provide a leap forward in the product development process by offering very reasonable prices. They have a reputation for making high tech gadgets  as compared to other companies  in their domain. Apple’s product process has held a strong fascination for many over the years as it defies long-held conventions about how it should work for companies as large as it is (Apple, 2012).

The ability of a company  to innovate  higher quality new products  and services quicker and  more frequently introducing them to the market  is a  competitive advantage.  For companies like Apple to  additionalally  enhance competitiveness, they have to invest heavily on  Research and Development design and production activities so as to  gain  economical advantages. Apple’s  New Product Development   framework  frequently involves the coordination of activities across innovative teams. Therefore, based on studies and research on  new Product Development, this paper proposes  a new conceptual NPD integrated framework for Apple.

The company’s new product development  framework consists of five NPD  key phases.The first phase is the  Identification  of Opportunity, second is the Concept Development, the third is  Design & Development, the forth is  Product Testing  and finally  Product Commercialization. In the current dynamic business environment,Apple is  increasingly being confronted with product improvement difficulties and set backs  to release  new product to market faster than the rivary in the technology domain (Crawford, 2002) This occurrence has become a strategic phenomenum  for many organizations Many companies are  introducing new products faster, more frequently, and of user friendly  .Researchers urgue that  Organizations must be able to bring down the  resources required to provide an efficient and appropriate combination of product features like  performance, price and availability to customers economical advantages in the form of cost reduction in product development and manufacturing

Factor 1. Marketing Strategy and target market

According to Kotler (1999), a marketing strategy is how a company hopes to create customer value and achieve profitable relationships through marketing methods and logic. In a marketing strategy, companies decide which customers it aimsto serve (Target) and how it will serve the market (Positioning).A target market is the group of people which present the greatest opportunities for sales in an identified market segment. The products focus on ages ranging from between 18 years to 40 years because the populous in this gapis always busy maybe working and studying thus they don’t have adequate  time have a proper meal or cook, therefore, most of them will resort to product innovations.The company thus offers a  great opportunity for its customers to experience will the products

Positioning

This refers to the art of designing a company’s product, offeringor image to occupy a typical place in the minds of the target market (Kotler, 1999). Apple  already has a good market position and it’s very famous for the value for money when it comes to the products they offer.. This positioning is very advantageous since it bring competitive advantage to the company.

 Marketing and Product Objectives

The marketing and product objective of this marketing plan is to provide growth to a product within a year. It aims at improving and promoting customer loyalty to the company. This can be achieved through a myriad of business strategies Apple  has already implemented or is intending to try and experiment the market response.

Market Penetration

Market penetration is the process through which a firm aims at increasing its share of the market in which it already operates. Apple  is very critical on focusing its marketing strategies on the markets they already operate in. They have a single dedicated department that is focused on achieving this.

Market Development

This plan involves locating new markets for the products a company already makes. Apple  has rolled out a department specifically for this reason. The department is referred to as the new business development. This workforce works carefully with customer opinions  to improve features of a product  (Kotler, 1999).

Diversification

Diversification entails activities through which an organization goes into new markets which are totally dissimilar from the existing activities of the firm. Apple  is venturinginto real mobile phone markets, real estates and other financial markets so as to reduce business risks.

Product Development

This alludes to the change of products after some time to keep up their competitive position. Product development is one of the fundamental strategiesfor marketing subway relies on;this is through their healthy menus and brand promotion.The company has a development and research team that is responsible for test marketing and developing the foods that they sell.

Point of Difference

A point of difference (POD) is a benefit or attribute that consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competitive brand (Kotler, 1999). A point of difference works by associating a certain brand to unique attributes that is desirable to certain customers. The key point of difference that makes Apple stand out is its unique and interesting product technology.

New product  Strategies for Apple Inc

Market Analysis

Market analysis is the process of providing information and evaluation needed for activities that involve marketing .Apple  can evaluate the perception of their customers’ needs and wants through this valuable tool called market analysis. In addition, the company also can evaluate their competitors’ situation in the market. The Market analysis comprises market trends, market need, SWOT analysis and competitor analysis.

Market Need

Apple is rolling out a variety of products with advanced technology and efficiency. This has been done to cater for a growing consumer demand for these products. The company seeks to fulfill these needs and wants through producing and marketing these new products.

Competitors Analysis

Apple operates in a very competitive environment. Its primary competitor is Samsung Electronics Co., Ltd., Amazon.com, Inc., International Business Machines Corporation, Cisco Systems, Inc., Google Inc., Microsoft Corporation, Dell Inc., LG Electronics, Lenovo Group Limited, Hewlett-Packard Company, Sony Corporation and many other companies.

Marketing Mix

According to Kotler (1999), it is very essential to develop a marketing mix for marketingsince Apple uses such a strategy to analyze existing data from sources, company shipment data,media, pricing, and promotion data.All this data affects the sales volume for Apple

Product Implementation Plan

An implementation plan is very important for marketinga new product. It is the process of turning a marketing plan into actions and ensuring that the firm accomplishes the plan’s objectives. . It addresses the and why of marketing; the implementation entails where, who, how and when.In this case, we are going to focus on Apple’s redesigned i phone .Apple  plan can be implemented by use of the The McKinsey 7-S model. This model involves seven interdependent factors which are categorized as either hard or soft elements.the hard elements are strategy,structure and systems,while the soft elements are skills,staff,stlye and shared values. The primary focus of the framework is that seven internal organizational aspects should be aligned properly in order to attain success (Lynch 2005). The framework is widely used in various scenarios.

Strategy

According to Wheelwright (2006)  product strategy depicts the plan that an organization uses to build and maintain a competitive advantage .Apple strategy should be developed to achieve sustainable competitive advantage,and be able to sucesiffully compete in the markets.A good strategy is the one that is supported by a strong vision and values.Apples strategy is to deal with competitive pressure by ensuring that their products are effective and high tech and  customers are guaranteed that  their products are very efficient  as compaired to other players in the market.Changes in customer demands are also treated delicately to ensure that every customer is satisified with the  products and will always come back.

Structure

This defines how Apple  is divided,so  as to determine how the company operates.Effective organizational structure in Apple has enabled coordination of  the organizational activities and to have a focus.Apple has adopted a structure whereby work is done in teams of experts,and this has made the organization more flexible,and also empowers employees.there are less hieracies,meaning that information flows more efficiently.In Apple ,there is networking among employees and roles and responsibilities are clearly outlined.this has ensured speedy communication in all the facelets of the organization.

Systems

Apple  has created a condusive environment for capacity building and flexibility.customer information is well managed and shared.control systems are well monitored and regulary evaluated.the organization has also ensured that systems relating to information collection are well updated and documented. Special emphasis has been placed on the customers, with the intention of making  the processes that involve customers as user friendly as possible.

skills

Their plan involves identifying skills gaps and constantly trains their employees and  also maintaining teams.Apple identifies distinctive capabilities of some key employees within the organizations for proper utilization.there are sophisticated ways to set to analyse problems within teams and employees are generally empowered to make decisions.

Staff

Apple  issues positions to staffs according to skills and specialization.they emphasize on hiring the best people for the job, providing them with thorough training and mentoring.Apple  also ensures that their staff  achieve professional excellence.This in return gives the company a competitive edge over its competitors.Employees are instilled with confidence and provided with incentives to work hard. There are also opportunities for caree growth among the staff.

style

Style include norms and values of the organization.Management has adopted a participative style of managing,and effective leadership.Apple defines long term development vision. Leadership of the organization has ensured innovative and friendly environment with smaller chain of command. Apple  has adopted a leadership style and cultural qualities that can help to achieve the strategic objectives.

Shared values

All members of the Apple organisation share some common fundamental values. At present efficient set of values are being promoted by management at Apple , and  more effective initiatives and programs are being  devised so as to  ensure these values  are  being shared and appreciated by all members of the staff. These common goals and values keep all  employees in Apple working towards a common destination as a coherent team.

Other Evidences of Strategic product  Implementation

Responding to changing consumer expectations in terms of Context mobile technologies; Apple’s  marketing program meets these expectations through a number of approaches. Most notable are the TV advertisements .

Risk Analysis

Most of the company will also identify the risk analysis so as to gain high profitability and better loyalty of customers. Apple has to make sure that the quality of its products is  high because if it has any problems with quality, it will tarnish the reputation of Apple . Regardless of how the market position, the positioning of Subway is high quality.

STREGTHS AND WEAKNESSES OF APPLE NDP

strengths

  1. Customer loyalty for a long period of time
  2. Apple is a top innovator in mobile device technology
  3. Strong financial performance
  4. Brand reputation
  5. Retail stores across the world
  6. Strong marketing and advertising teams

Weaknesses

  1. High price for their products discouranging customers
  2. Decreasing market share due to competition
  3. Patent infringements
  4. Rapid changes in its  management
  5.  Products Defects especially the new products
  6.  Products Incompatibility with various operating systems

Metrics for Development of Apple’s new products

Development period is described  as the duration from the initialising to completion of the development stage.This  is the  length of time to develop a new product finalizing the  business case stage to the first market  sales. Apple has  defined a product development team that  comprise of individuals from various functions within the organization The most efficient development teams also involve customers  in the early stages of development.This procedure calls for  frequent communication between functions represented on the team and co-location greatly facilitates this process (Stevens, 2002).

Recommendation

This paper proposes that to enhance success of a firm,companies  must  have a well defined and  communicated new product  development process.. Successful businesses such as Apple  have a dedication towards the ideas and opinions of the customer. It is very important  that companies must collect  as many ideas and opinions  as possible from external and internal sources  to design and develop sucessiful new products. The sucess of execution of the predevelopment phases like  initial screening, first  market and business analysis is directly bonded  to the products market success. Companies should  shorten the development period of the products  so as to mreduce  the chances  of changing of customer needs  during the product development. It is very crucial  to verify and authenticate performance  of a product  and design features that aligh with customer’s acceptance prior to launching the product into the market (Feigenbaum, 2006) .

Conclusion

New product success still remains the critical challenge for many firms. Apple is  aware of the key role new products must play in their future targets and mission .The company is  constantly searching for  new ways to innovate and  revitalize its products to meet market demands.Apple is also  redesigning and  restructuring  their new products development  practices and processes for good revenues. This paper analyzed and looked  critically the new product development  process of Apple  and  also attempted to identify strategies which the company  can use to  improve their performance when developing new products. This would be very  useful for  companies in their product development processes  (Leake, 2003).

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