One of the integral aspects of a company’s function revolves around the product and services that it offers. Businesses rely on products that deliver value to customers, to achieve competitive advantage and market share. Developing a new product or service takes a number of considerations including competitor analysis, market research, promotion, cost analysis, risk management and corporate strategy amongst others.
Consultants at 121 may assist you with the planning and strategy of new products and services. This would typically be followed by project management and the necessary execution to launch the new product into the market. There are several important aspects to keep in mind.
Prior to the launch of a new product or service, you need to ensure thorough research to investigate if there is sufficient demand. Do your competitors already offer this product or service? Is the market already saturated in a sense that a new competitor will need to compete with price? If there isn’t a sufficient opening where you can build an attractive customer base, it may be wise to consider going back to the drawing board. There are different ways on how to perform research including using online sources to better understand the features of existing products, quantitative methodologies through surveys and qualitative methods such as focus groups. This would help in capturing numerous insights which go beyond your organisation.
A new product will also require the allocation of appropriate resources. To plan, set up and manage a new product, you will need people to work on this project. Depending on the product or service, you will need to determine whether such resources are required on a full-time basis and investigate the salary expenses incurred for this project.
A careful analysis of the day-to-day operational costs needs to be undertaken. This should be documented as part of the project plan to evaluate whether the process is worth undertaking. You may find that the operational costs would entail a number of years before the company enjoys the return on investment of the product or service.
A new product or service will require an assessment of the possible risks. Compliance with existing legislation and a regulator if applicable needs to be managed to avoid detriments such as legal action and fines, which can be considered as risks for the business.
When will the product lead to profitability?
A new product is likely to require a hefty initial investment, to build and promote. To start recording profit, it may take a couple of years. This is something that the business needs to keep tabs on and establish whether this fits into the overall strategy.