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New Product Development (NDP) Report

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Updated: May 1st, 2020

Introduction

Products act as the main source of monetary benefits that organisation organisations enjoy upon availing them to willing clients. An organisation may decide to increase its sales returns by colonising new markets. Due to differences in the needs of the target consumers in different markets, it may be compelled to either improve or develop completely new products to suit a market (Kim & Wilemon, 2007).

This strategy is perhaps largely workable for Google when it chose to enter the Chinese market. Considering that the goal of new product development (NPD) entails coming up with products that succeed in a target market, using the case of Google China, this paper investigates the processes of developing such commodities.

Purpose

This paper discusses new product development at Google China. The discussion borrows from various theoretical frameworks for developing new products in organisations. The paper also conducts interviews on customers and company employees about the reception of Google China’s new products with the aim of developing an understanding on the effectiveness of NPD practices of the company.

Background

First led by Kai-Fu Lee, Google China began as a subsidiary of Google Company in 2005. It ranks the third position in the Chinese market after Soso and the Baidu. Carsten (2013) informs how it controlled a market size of about 338 million people in 2009.

Over the years, the company has been struggling to expand its market. However, it has encountered immense challenges akin to the various legal regulations on search engines in China’s mainland. In 2010, Google searches were prohibited for some time in China’s mainland. Mobile searches and others yielded DNS errors (Carsten, 2013).

Hong Kong does not censor search results for various search engines. Google China found it the most appropriate location from where to control the sharing of networking and information resources across the internet with Google customers who are located in the China.

Marketing successful Google products elsewhere across the globe in the Chinese market is incredibly difficult because of censorship and other regulations on information sharing. The company endeavours to search new products that fit the Chinese search marketplace.

For instance, it presumes that the software for android Smartphones has a high potential to succeed in the Chinese market. Google had controlled 29 percent of the total search market in China by 2010. However, this trend declined by 24 percent over 2012 before settling at 1.7 at the close of 2013 (Carsten, 2013).

This poor performance attracted the necessity for the development of new products that suit the Chinese market. This case has been given priority if Google China has to operate in the market with success in the future.

Scope

New product development comprises all approaches that are applied to avail new products in all markets where an organisation’s operations are established. These strategies include idea development, design of the products, its engineering, marketing research, and promotion analysis.

The scope of this paper is limited to product design, idea development, and engineering. The other two aspects (marketing analysis and research) focus on ensuring acceptance and performance of the products in the marketplace.

Methodology

This research uses both primary and secondary resources. Direct online interviews, which are conducted on employees and customers of Google China, are the sources of primary data. The interview questions are designed to eliminate ambiguity. This situation enhances clarity so that interviewees can respond accurately.

The interviews (as shown in appendix 1 and appendix 2) focus on determining the reception of Google products, which the Chinese people search consumers. The questions also target at determining the implication of censorship upon the consumption of the product. This information may provide an opportunity for benchmarking or reverse engineering in the development of new products that suit the Chinese consumers.

A sample of 20 people (customers and Google China employees) was interviewed. Primary data is important in helping develop thumbnails for products that are likely to succeed in the Chinese market.

However, the development of the actual products requires the deployment of an appropriate NPD conceptual model. Therefore, a wide range of secondary data on frameworks of NPD becomes important. The most appropriate framework is then selected for analysis of Google China’s NPD processes.

Assumptions

The models deployed in the discussion of NPD are borrowed from secondary resources. Such models are developed for application in general organisations without considering specific needs in some markets.

This research assumes that upon generation of ideas that measure up to the needs of the Chinese market, Goggle China can follow such models to create products that will succeed in the Chinese marketplace. The research also assumes that no other recent or better NPD models exist in unpublished scholarly works and/or stored in a form that is inaccessible through online libraries.

Limitations

Using online interviews to collect data in a nation where there is regulation of freedom of expression through online media is one of the major limitations of this research. Fear among the interviewees on the purpose or use of the information that is sought from them may increase their reluctance to participate in the interviews.

This situation has the implication of lowering the accuracy and reliability of the research findings and the offered recommendations. The approaches deployed by Google in NPD may also differ from those applied by other organisations. Thus, the process of generalising and applying the recommended NPD processes in other organisations is another limitation of the research.

Frameworks

Sequential Model

The sequential model depicts the process that leads to the development of new products. It comprises a number of sequentially organised steps (Smith & Reinertsen, 1998).

Application to the Organisation

Sequential model in figure 1 shows that NPD initiates with the development of the concept or a product idea before examination of the feasibility of the products. This case makes the model highly applicable in Google China since the challenge of developing new products that meet the needs of the China’s search market requires compliance with China’s rules and regulations.

The feasibility of the product must be evaluated in the context of legal and regulatory environment so that a failure to pass the feasibility test calls for a re-examination of the concept before any other effort to develop the product further.

Aspects such as the quality of the product and its capacity to satisfy of customer needs are also accomplished at the feasibility stage (Smith & Reinertsen, 1998). In fact, at Google China, organisational resources can be wasted if software and applications developers initiate NPD process without total assurance of the likelihood of acceptance of the new product as it progresses in each stage of development.

Overlapping Model

The overlapping model approaches NPD process through the interactions of various professionals and work teams from the beginning to the end. Rather than operating through specialised stages, contribution of all players in the development process ensures attention to varying ideas since the development process takes place (Ulrich & Eppinger, 2004).

Under the model, each of the stages of NPD initiates before the end of the preceding stage (Ulrich & Eppinger, 2004). Additionally, new product developers at one stage pre-visit the previous stage in an attempt to incorporate various changes to eliminate cascading bugs in the current stage from the previous stage as illustrated in figure 2 below.

Figure 2: Overlapping Model in Product Development

Overlapping Model in Product Development

Source: (Ulrich & Eppinger, 2004)

Application to the Organisation

While developing new Google China’s products, several variables may influence the success or failure of the overall development process.

While implementing a phase in the NPD process, it important to consider the necessary changes in the previous phases in an effort to incorporate them in the second phase to increase the probability of success of later phases. For instance, it is important to evaluate a phase in the context of the likely omissions of legal requirements as they apply in China’s search industry.

Innovation Value Chain Framework

Innovation Value Chain Framework

Source: (Hansen & Birkinshaw, 2007)

Projected by Hansen and Birkinshaw (2007), the innovation value chain scheme presents four chronological stages, namely creation of thoughts, selection of the appropriate idea, transformation, and idea execution.

The model provides an in-depth examination of an organisation’s efficacy through KPI constraints for gauging production capacity. The framework may be fruitful at Google China since it can be tailored to diverse production stages within the company

Application to the Organisation

The usability of the value chain framework to different sectors within Google China makes it feasible to gauge the circulation of various production strategies across many systems while at the same time weighing production at different departments that make the company.

The framework can come in handy while determining production at Google China by enlightening its expenditure in IP security and/or in structuring its status to advance its production volume.

High-Tech model

Google China operates in a technology intensive industry. This environment underlines the necessity for considering NPD models that are applicable to such an industry. Cooper and Edgett (2010) assert that high-tech organisations need to establish NPD models that incorporate their business objectives and specific goals. They suggested an NPD model that concentrates on these aspects.

NPD comprises various stages, namely thought formation, plan selection, model testing and expansion, industry scrutiny, beta testing, bazaar investigation, methodological execution, commercialisation, and pricing of the new product (Cooper & Edgett, 2010). However, the plan deviates from the sequential and overlapping models.

It features a special concept, namely strategic arena, which only applies in high technology organisations (Cooper & Edgett, 2010). This aspect refers to the particular business-oriented bazaar, trade, applications, merchandise category, technology, or simply efforts that are concentrated on a new product (Zemlickienė, 2011). The model also highlights the importance of the use of strategic maps in the NPD process.

Application to the Organisation

Strategic maps help in assessing the most effective and important strategic arena (Zemlickienė, 2011). This claim suggests that they offer mechanisms of evaluating and visualising the mechanisms of addressing various factors that influence the NPD process.

For Google China, strategic maps provide a room for incorporation of environmental factors that control the company’s success in the Chinese search market. In this sense, the model provides mechanisms for ensuring the development of customised Google products that are likely to boost the organisation’s competitive advantage in the Chinese market.

Diamond Production Framework

The diamond framework, which makes part of Porter’s work that sought to address the issue of competition disparities with reference to different products, has five key production elements, namely product upgrading and technology plan, idea-to-launch procedure administration, portfolio supervision, atmosphere, traditions, headship, and new product performance.

Diamond Production Framework

Source: (Rugman & D’Cruz, 1993)

Application in the Organisation

Using this framework, Google China can think about three foremost matters, i.e. the availability of a premeditated product arrangement to advance its production levels, configuration of the plan with the company’s approaches, and the existence of reputable systems for ensuring successful execution of business strategies

Critical Analysis

Gaps Identified

The aim of approaching the problem of NPD in the context of a conceptual model that has various decision loops or algorithms is to ensure a reduction of bugs that result in failures of new products either in the development process or soon after completion of the entire process.

Identifying gaps in the organisation’s approach to NPD can help conceptualise an alternative approach to NPD, which will lead to the development of new products that have a higher probability of success in the market (Ulrich & Eppinger, 2004).

Google China uses NPD plan based on the standardised NPD model deployed by its parent company across all other markets, notwithstanding special laws and regulations in the Chinese market. This gap may explain the reduced success of Google success in China between 2010 and 2013 as discussed before.

Strengths

Although different NPD models have their strengths and weaknesses, consideration of strengths and weakness of the organisation in any market, which prompts the development of a new product is incredibly important. Google China has a large resource base support from the parent company akin to its successful global operations (Carsten, 2013).

The resources can be utilised in marketing research to identify specific attributes for search engines that are valued by Chinese search consumers. This information can be deployed as inputs of idea conception stage, which is common to sequential, overlapping, and high-tech models, to enhance utility levels of new products in the market.

Weaknesses

Due to declining competitive advantage in the Chinese market, the company may encounter challenges while trying to place its new products successfully in the Chinese market. This possibility is a significant weakness upon considering that it has a low presence in the social media advertising.

New media advertising constitutes one of the growing ways of communicating a product to consumers (Kotler, Adam, Denise, & Armstrong, 2009). The company has no capacity to solicit for relaxation of Chinese laws and regulations on search engines.

These inabilities create uncertainty on whether the nation will enact new laws that can create a non-conducive political climate for success of new products that are developed consistently with the provisions of the current laws.

Recommendations

In a market where the existing products of an organisation perform poorly, introduction of new products becomes the only option to re-energise its operations. Developing a new product begins with the identification of an appropriate NPD model. Google Company approaches NPD from the context of examining ideas from its people.

It prioritises the top most100 ideas, utilises agile approaches, promotes visibility, and/or pays attention to usability of its products. This approach fails to incorporate regulations such as censorship.

The model generally applies in nations that have higher levels of freedom for expression and sharing of information. Thus, it is recommended for the company to incorporate this consideration while at the same time deploying either high-tech or overlapping NPD approaches in the Chinese market.

Conclusion

Organisational products undergo different phases, namely the development phase, the preamble stage, rapid growth stage, maturation, and decline phase. At the decline phase, re-engineering or developing new products is important to prevent a total collapse of the organisation in a given market.

Google China recognises the importance of developing a new product that will renew its fortunes in the Chinese market. NPD starts with identifying an appropriate model. The paper has discussed three NPD models together with their applicability at Google China.

Reflection

Any organisation that seeks to gain a competitive advantage in a market that is characterised by competition and statutory regulations must not only focus on compliance, but also look for products that meet consumer needs better than the competitor products.

Through this assignment, I have learnt that introducing organisations’ operation in a new market requires the development or modification of products to meet specific needs of the market. The objective of any organisation is to deliver value to its owners.

This value is normally expressed in terms of the returns on investments. Organisations face the pressure of delivering value to not only to the owners, but also to other stakeholders who have stakes in the performance of the firm (Cooper & Edgett, 2010).

This goal cannot be achieved without high-performing products in the market since sales act as the main way of generating income in a profit-making organisation.

By studying the case of Google China’s struggles in establishing itself in the Chinese search market, I have leant that total assessment and analysis of the organisational operation environment is important in avoiding failures in placing products in the new marketplace.

Through the assignment, it is evident that the rules of new product development change with the changing external forces as an organisation ventures into different markets. This situation has altered my perception of new product development process as encompassing a holistic approach, which can be applied within any organisation with success.

Initially, I viewed product development as a process that constitutes all steps that are necessary for ensuring that a new product satisfies the needs of the target market in terms of usability. However, it is now clear that although a product may be highly usable, a regulatory force can prevent its consumption in the market.

Google Company has been successful in the global search market. Many organisations, especially software and networking applications companies, have benchmarked their NPD processes with those of Google. I believe Google Company is one of the global organisations whose products have received positive reception in all markets.

However, through the assignment, it is clear that no single company’s NPD strategies can lead to the creation of new successful products in all markets. Thus, although benchmarking is essential, it is important for an organisation to approach new markets in an open-minded manner.

This case ensures that the input for idea conception, analysis, and testing only depends on the anticipated environmental variables, but not on other variables that apply in another market segment.

This assignment has provided a learning opportunity on how product development process occurs in real-life. It is not a straightforward approach, but an approach that requires many iterations and examination of probable products through several algorithms to enhance their positive reception in the market.

For instance, through the interviews, potential customers of Google products in China unanimously agreed that if Google searches do not return DNS errors, which occur because of blocking of some sites due to censorship of the products to comply with China’s regulations, they could consume them.

In this extent, focusing on a particular organisation has provided an opportunity to appreciate how a particular context in which an organisation influences its NPD conducts.

Reference List

Carsten, P. (2013). Microsoft Blocks Censorship of Skype in China: Advocacy Group. Retrieved from www.nbcnews.com/tech/internet/microsoft-blocks-censorship-skype-china-advocacy-group-f2D11664965

Cooper, G., & Edgett, E. (2010). Developing a product innovation and technology strategy for your business. Research Technology Management, 53(3), 33-40.

Hansen, M., & Birkinshaw, J. (2007). The Innovation, Value Chain. Harvard Business Review, 85(6), 87-98.

Kim, J., & Wilemon, D. (2007). Sources and Assessment of Complexity in NPD Projects. R&D Management, 33(1), 16-30.

Kotler, P., Adam, S., Denise, S., & Armstrong. (2009). Principles of Marketing. Australia: Prentice Hall.

Rugman, M., & D’Cruz, R. (1993). The double diamond model of international competitiveness: Canada’s experience. Management International Review, 33(2), 17–39.

Smith, P., & Reinertsen, D. (1998). Developing Products in Half the Time. New York, NY: John Wiley and Sons.

Ulrich, K., & Eppinger, S. (2004). Product Design and Development. New York, NY: McGraw-Hill.

Zemlickienė, V. (2011). Analysis of High-Technology Product Development Models. Intellectual Economics, 5(2), 283-297.

Appendices

Appendix 1: Interview questions

Are you an employee or potential customer of Google China?

  1. Employee
  2. customer/potential customer

If you are an employee, what is your experience with Google China?

  1. Always occupied in troubleshooting networks and directing customer traffic
  2. Hardly occupied in troubleshooting networks and directing customer traffic

If you are customer/potential customer, have you ever used Google China search products

  1. Yes
  2. No

If your response to question 3 is No, why?

  1. Highly censored
  2. Always returns DNS error

If your response to 4 is b, can you consider using the products if Google China search products do not return DNS error or when censorship is limited?

  1. Yes
  2. No

Appendix 2: Interview Reponses

Question Response
a b
1 4 16
2 0 4
3 3 13
4 5 8
5 8
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