The Challenges of Product Development

Most people without experience in product development are astounded by how much time and money are required to develop a new product. The reality is that very few products can be developed in less than 1 year, many require 3 to 5 years, and some take as long as 10 years. The cost of product development is roughly proportional to the number of people on the project team and to the duration of the project. In addition to expenses for development effort, a firm will almost always have to make some investment in the tooling and equipment required for production.

Developing great products is hard. Few companies are highly successful more than half the time. These odds present a significant challenge for a product development team. Some of the characteristics that make product development challenging are:

The Challenges of Product Development

1. Trade-offs

An airplane can be made lighter, but this action will probably increase manufacturing cost. One of the most difficult aspects of product development is recognizing, understanding, and managing such trade-offs in a way that maximizes the success of the product.

2. Dynamics

Technologies improve, customer preferences evolve, competitors introduce new products, and the macroeconomic environment shifts. Decision making in an environment of constant change is a formidable task.

3. Details

The choice between using screws or snap-fits on the enclosure of a computer can have economic implications of millions of dollars. Developing a product of even modest complexity may require thousands of such decisions.

4. Time pressure

Any one of these difficulties would be easily manageable by itself given plenty of time, but product development decisions must usually be made quickly and without complete information.

5. Economics

Developing, producing, and marketing a new product requires a large investment. To earn a reasonable return on this investment, the resulting product must be both appealing to customers and relatively inexpensive to produce.


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