Gain Competitive Advantage Through New Product Development
In today's competitive world, companies do not compete on cost or delivery alone. Intro of new goods or new product features has become a main method to obtain competitive benefits. The best example of this strategy is that of Pepsi Company. For decades, Pepsi Cola & Coca Diet coke battled intended for supremacy in the cola marketplace, however in 1990's Pepsi gained market share, improved profitability to become World Number 1 drink vendor by simply introducing multitude of new goods. See: The Pepsi Machine
Similarly, Apple., has consistently outwitted competition by presenting radical new releases: iMac, iPod, iPhone, iTunes, OS Times etc .
In high tech universe, companies can easily hope to endure only if they will introduce new items. Old items will swiftly become obsolete & new items becomes the sole source of future revenue.
New product development offers an opportunity to replace the competitive scenery. New products will help company gain new customers, maintain existing clients and maximize profitability. In other words, new products may be the only supply of competitive advantage - if executed effectively. And this puts the spot lumination on the item manager. Merchandise manager's function in determining the new item: specifications, features, performance, charges et al, is vital to get competitive advantage.
Retain existing customer base
Client's needs maintains changing eventually. In order to maintain current consumers, business need to constantly adapt to meet the changing requirements. For example , if GMC were to maintain making similar model of the cars as they do in 2150, then today it would be bankrupt. Companies ought to constantly introduce new products to hold the existing consumers exited and happy.
One other example of merchandise stagnation & hence shedding market share will probably be that of Motorola. For a long time Motorola made & sold simply analog phones - even if the service providers had moved to digital systems. Then came Nokia with sleek digital phones & stole the market share by Motorola in 1998. (see: JUST HOW MOTOROLA DROPPED ITS APPROACH Also observe: Zombie Businesses: How to Study from Their Mistakes)
The problem with most SME (Small & Medium enterprises is that they neglect to keep up with the market - they may have one/few powerful products, plus the management concentrates on execution & improving working efficiency for a long period - that they can forget to update their products. Ultimately competition effects a better product and throws the incumbent out of business. For example Design Acceleration Inc. A new great application - " Signalscan", during time other competitors surfaced - forcing Design Acceleration Inc. to merge with Cadence Style systems.
In India, Nirma a Gujarat based customer and professional products organization once centered the cleansing detergent industry with its " Nirma" company washing Dust. But the company failed to present new products - and relied solely for the flagship product for sales. Consequently the market share features plummeted as well as the brand features lost the relevance to most consumers.
Simplest way to retain the latest market share should be to attack the existing items with more recent & better products. The modern products must be aimed at clients of existing products and for similar products (from competitors). Cannibalizing existing products is a surest approach to retain market share, remain new & current in the market place - and win some market share via competition (if they do not offer exciting new releases to match)
Today, cannibalizing existing goods is a standard practice at the foutune-500 firms. The best cases can be seen in Computer industry & Auto sector - in which companies often introduce new releases that exchange their existing ( & even ideal selling) goods.
On the contrary, few firms have resisted this trend of cannibalizing current product lines -- and have protected their products via...