Page 313 - Operations Strategy

288 CHAPTER 8 • PRoduCT And sERviCE dEvEloPmEnT And oRgAnisATion

Figure 8.8 A typical ‘stage model’ of the product and service development process

Concept generation

Concept screening

Preliminary design

Design evaluation and improvement

Prototyping and final design

Developing the operations process

are broadly similar. Figure 8.8 illustrates a typical stage model. Remember, though,
that even if we assume that these stages are not sequential, it is a somewhat simplistic
approach to describing what really happens in product and service development. The
reality of bringing products and services from concept to market introduction is, in
reality, both complex and messy.
Concept generation
Ideas for new product or service concepts may be generated from sources outside the
organisation, such as expressed customers’ needs or competitor activity, or from sources
within the organisation such as sales staff and front-of-house operations staff, or, more
formally, from the R&D department. There are many market research tools for gather-
ing data in a formal and structured way from customers, including questionnaires and
interviews. These techniques, however, usually tend to be structured in such a way as
only to test out ideas or check products or services against predetermined criteria.

Concept screening
Not all concepts, or variants within a concept, have the potential to be developed
through to market launch. The purpose of the concept-screening stage is to take the
flow of concepts emerging from the development process and evaluate them. Con-
cepts may have to pass through many different screens, and several functions might
be involved – each using different criteria to screen the proposals. Screening may be
divided into three sets of criteria related to market positioning, operations/technical
implications and financial evaluation:
1 Does the proposed product or service occupy a market position that is both attractive
in its own right and consistent with the organisation’s overall marketing strategy?
2 Does the proposed product or service exploit existing operations resource capabili-
ties or help the operation to develop attractive new capabilities?
3 Is the investment in the proposed product or service feasible, and is the return from
this investment acceptable?

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