Product family-based design and development is a useful approach for firms to adapt to an age of shortening product lifecycles, increasing development costs, and demanding customers. In this chapter, we have presented an integrated view of product family-based design and development in which the optimal product family-based design (decisions about the number of products and their locations on attribute space) precedes their detailed development (architecture, configuration design, and component/supplier selection).
Models of product family development explicitly allow firms to represent the relationships between products. These models differ significantly based on whether the markets for these products are vertically or horizontally differen- tiated. Implicitly, the models serve as a decision support system for managers who want to identify ideal platforms for their family, or sharpen the definition of their platform with cost minimization as an objective. An important current limitation of these models is that they are largely restricted to a monopo- listic environment and do not capture the competitive dynamics involved in product-family design. A second area of further research is the incorporation of technological uncertainty and channel interactions in distributing product families.
While the models presented above are all driven by problems faced in realistic situations, they also suffer from the simplistic assumptions required to develop insights. These models have been found to be useful in directing managers, but require further calibration and modification to become decision support models.
One of the primary obstacles to more realistic decision-support modeling is the limited availability of data that would drive such a model. We believe that future research in this area should also focus on gathering data to validate these models and refine them for real-life applications. Collecting an exhaustive table of required data for such models may seem daunting at first, but two factors come to the manager’s aid. First, firms can draw from engineers’
experiences and design cookbooks to calculate design costs. Second, the most
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challenging part of data collection for using this model is marketing related, estimates of which are generally available in most firms.
In conclusion, product family approach can help managers balance the benefits and costs of variety and manage the complexity associated with product variety. Such an approach can be particularly suited for incumbent firms with a wide product line and the associated proliferation of components and suppliers.
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development: An evolutionary integration
Lee Fleming and Santiago Mingo
We would like to thank John Elder for editing help and the Harvard Business School Department of Research for supporting this research. Errors and omissions remain ours.
1. Introduction
Very few firms can survive today without new products, for these provide revenue, increase market share, improve prestige (attracting future employees and external endorsements), and provide effective vehicles for organizational renewal and strategic change (Wheelwright and Clark, 1992). Breakthrough products offer explosive growth as well. Although the abundant research and literature on how to develop new products has helped firms improve their new product development processes, truly creative product development remains difficult. Breakthrough product development, in particular, remains elusive and seemingly random.
We focus in this chapter on the very beginning of the product development process, adopting an evolutionary perspective because it explains why firms tend to invent incrementally and why truly creative product development remains so difficult. Because the evolutionary perspective (Darwin, 1858;
Campbell, 1960; Basalla, 1988; Simonton, 1999; Gierer, 2004) recognizes the differences between an idea’s birth and its ultimate success, it helps firms recognize and manage the inherent tensions between creativity and execution (March, 1991; Christensen, 1997; Hansen, 1999; Repenning, 2002;
Sutton, 2002; O’Reilly and Tushman, 2004). These tensions become especially difficult when a firm attempts to invent a breakthrough.
While it would be impossible to cover even a fraction of the research on creativity and product development, in this chapter, we organize some of the dominant themes of that research according to the three stages of evolution defined by Darwin – variation, selection, and retention. The variation stage covers the generative sources of creativity. We argue that this process can only occur within a single individual, although it can be improved (within the
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individual) by collaboration. The selection phase covers the initial sorting of the occasional good idea from the modal bad idea. The last stage, retention, covers the development of prototypes and products, experimentation, tech- nology transfer, portfolio management, and marketing – in short, the classic elements of product development. Given that the other papers in this volume (and the new product development literatures as a whole) focus mainly on the selection and retention stages, we will do little justice to the selection stage and no justice to the retention stage. We conclude with a discussion of how managers can influence the early stages of creativity.