Introduction
The world is now on a fast pace. New products come and goto. Some were successful, but some are left forgotten. This is especially true in industries where the products have short life-cycles like in the mobile phone industry. New models face obsolescence in just a period of less than five years. Thus companies in this industry must have research and development departments that can work as fast as the products’ life cycle. In the mobile phone industry, a company that truly has this characteristic is Nokia Corporation.
This paper presents how Nokia does its product design and development that made it the world’s leader in mobility. Also presented in this paper are discussions on the phases of product design. The formation of a task force responsible for developing a new product is also discussed. The organizational culture and management issues that the head of the task force mentioned would face are also presented. Furthermore, the project planning tools that the task force may use in designing the product are also presented.
Executive Summary
Product design and development contribute a lot in the success of a new product. The phases in developing a new product are idea generation, idea screening, concept development, and testing, business analysis, beta testing, and market testing, technical implementation, and commercialization. The best way to do these phases is by creating a task force or creating a product development team. In this way, product design and development will be achieved faster and more effectively. However, the manager of the task force should be aware that certain issues can occur from this task force. Furthermore, the task force manager and the team members can use project management tools like Gantt charts and project management software in developing and designing the new product. Nokia Corporation does all of these that is why they lead the mobile industry.
Phases of Product Design
Bringing a new product or service to market is called new product development (NPD). The two parallel paths concerned with the new product development are: one is the idea generation, product design, and detail engineering; the other one is concerned with market research and marketing analysis.
There are various types and general categories of new products. Some products are new to the market; some products are only new to the company. Some products completely create a new market. Some new product concepts simply involve some minor modifications in an existing product, on the other hand, some are really and fully innovative for the company and the industry.
The process of developing a new product involves several steps. The first step is idea generation. This is also called the “fuzzy front end” of the new product development process. Obtaining ideas for the new products can be done through basic research by using SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. Observing the market and consumer trends can also be done. The company’s research and development department, competitors, employees, focus groups, salespeople, trade shows, corporate spies are also sources of ideas or insights on what product should be developed. Ethnographic discovery methods can also be used. It refers to the observation and searching for user patterns and habits.
After generating the idea by using the techniques and methods mentioned earlier, idea screening follows. The objective of this phase in product design is to eliminate unsound concepts before committing resources to that particular product. The screener must ask whether the customer targeted by the product will receive benefits from the product. Another question that should be asked is about the size and growth forecasts of the market segment. The expected competitive pressure for the product idea should also be known. The basis for the industry and market trends for the product ideas must also be considered. Furthermore, the technological feasibility of the new product must be questioned. Lastly, the profitability of the product manufacturers should be taken into consideration.
The next phase is concept development and training. In this phase, the marketing and engineering details of the new product are developed. In this phase, the question of who is the target market must be answered. The product features are also given the details in this phase. The benefits that the product will provide must also be understood in this phase. The reactions of the consumer should also be known. The production detail of the product must be defined; this includes concerns for cost-effectiveness. The feasibility of the product must be obtained by using tools like computer-aided rendering and rapid prototyping. The cost to produce the product must also be known in this phase. Testing the concept of the product is done in this phase. It can be accomplished by using Choice Modeling in order to know what the prospective consumers think about the idea.
The next phase for new product development is the business analysis phase. In this phase, the likely selling price for the product is determined. This can be based on competition and customer feedback. The Fourt-Woodlock equation can be used in estimating the sales volume of the product. Profitability and break-even point for the new product are also determined in this phase.
After business analysis, beta testing and market testing follow. In this phase, a prototype or mock-up of the product is produced. The product including its packaging must be tested in a typical usage situation. Conducting focus group customer interviews must be done in this phase. If deemed necessary, the new product can be introduced in trade shows. After testing, make the necessary adjustment for the design of the product. When the adjustments are made, an initial run of the product can be produced and sell it in a test market area to know customer acceptance.
If the results of the beta testing and market testing are acceptable, technical implementation can be started. In this phase new program is initiated. Resource estimation and requirement publication are also done. Planning the engineering operations and department scheduling should also be done in this phase. A logistics plan is generated in this phase. Resource plan publication, program review and monitoring, and contingency planning are also prepared in the technical implementation phase.
The commercialization phase follows technical implementation. Launching the product, placing advertisements, and promotions are done in this phase.
The steps mentioned may be repeated if needed. Some of the steps can also be eliminated. Furthermore, some companies complete several steps at the same time in order to reduce the time for the new product development process (Ulrich & Eppinger, 2004).
Task Force Formation
The responsibility of this task force is from moving the market requirements for the product to ensuring that the product will achieve success. The team should be formed in such a way there should be representatives from different divisions of the company. In this way, speedier product development will occur because there is the simultaneous performance of the various aspects of the product development process. Representatives from marketing, manufacturing, purchasing, quality assurance, and field service personnel must be included. A representative from vendors is also advisable. The research must be done in an open and participative environment. Everyone must be given the chance to speak up and give their potential contributions. The objective of the team should be to ensure the product’s success including its marketability, manufacturability, and serviceability (Heizer & Render, 2006).
Organization Culture and Management Issues
In developing the task force, the concern should be given in the selection of the appropriate team members. Naturally, the person should be competent enough for the knowledge he or she is required to contribute to the task force. The time constraints should also be considered. The person should have ample time to work on the project. Furthermore, every company has its own organizational culture, and some subcultures exist in the different divisions. If personnel from different divisions will work together, expect that there will be some clash of cultures, thus the task force manage should be prepared to handle these kinds of situations.
Project Planning Tools
In project planning, activities should be scheduled and they should be sequenced and given an allotted time to complete. The length of how long each activity should take should be determined. Popular tools for project planning include the use of Gantt chart, PERT and CPM, and project management software.
Gantt charts are planning charts that are used to schedule resources and allocate time. This is a low-cost means of helping managers to ensure that all activities are planned for, the order of performance is accounted for, the activity time estimates are recorded and the overall project time is developed (Heizer & Render, 2006).
Program Evaluation and Review Technique (PERT) and the Critical Path Method (CPM) can be used for project planning. This helps managers schedule, monitor, and control large and complex projects. Both PERT and CPM follow six basic steps, first is to define the project and the work breakdown structure must be prepared. Next is to develop the relationship among the activities. The third step is drawing the network of the activities. The fourth step is to assign time and/or cost for each activity. Proper estimation techniques must be used in this step. The fifth step is the computation of the longest time part or the critical path. The last step is to use that network of activities in planning, scheduling, monitoring, and controlling the project (Heizer & Render, 2006).
Different project management software is available in the market. The most popular of which are the Primavera (by Primavera Systems, Inc.), Pertmaster (by Westminster Software, Inc.), MacProject (by Apple Computer Corp.), VisiSchedule (by Paladin Software Corp.), MS Project (by Microsoft, Inc.), and the TimeLine (by Symantec Corp.) (Heizer & Render, 2006).
Company Background
Nokia Corporation is renowned as the world’s leader in mobility. The company was founded in the 1980s. Since then, they have been the pioneer in the industry. Right now, the company is leading the union of internet and mobility.
Nokia Corporation offers a wide range of mobile devices, services, and software. Their products allow people not only to communicate but also to navigate, entertain by using music and video, images, games, business mobility, and more. The mobile phone industry is not the only place where Nokia leads. Nokia Corporation also leads in the camera manufacturing and digital music industries.
The company values mobility as a power that can make economies grow and develop societies. They recognize that mobility changes the world not only in developed countries but also in developing countries. The company’s vision is to use this potential by improving mobile access and enables people to have more things that they can do on their mobile devices.
Nokia Corporation’s head office is located in Finland. It also has offices for research and development, marketing, sales, and production all over the globe. The company accounts for 38% of the total global device market during 2007. Indeed they are the number one manufacturer of mobile devices. The volume of mobile device units as of 2007 is 437 million units. The net sales of the company in 2007 amounted to EUR 51.1 billion. Their operating profit was EUR 8.0 billion. The company has a workforce of 112,262 employees. The company also exhibits strong research and development presence in ten countries. Their investment in research and development amounts to EUR 5.6 billion. 27% or 30,415 of the employees work for the research and development division. The company enjoys a market in over 150 countries worldwide. It is estimated that Nokia devices are available at 350,000 points of sale.
At present, the company focuses on maintaining its position as the world’s leader in the mobile devices market, and also in the consumer Internet and business services industry. Several strategic acquisitions have been made in order to maintain the leader status. Nokia Corporation acquired Loudeye, a leader in the digital music platform, Twango, a media sharing company, and Enpocket, a mobile advertising company (Nokia in Brief from Nokia.com and Nokia company brochure).
Application of the Phases of Product Design
Nokia Corporation’s research and development unit are the Nokia Research Center. The objective of this unit is to explore and develop new technologies and concepts that would pave the way for a mobile information society where the Internet and mobile communications are completely integrated. The Nokia Research Center serves as the research and development center for the Nokia business units. The activities done in the Nokia Research Center goes beyond the current product development. The activities also include understanding the market and user requirements. Of course, this is done through the help of the marketing division. It provides the necessary information about sales trends and other information related to the sales of Nokia’s products. As discussed earlier, this step is included in the phases for developing a new product. The idea for a new product is accumulated by the Nokia Research Center. The accumulation of ideas usually takes two months. Participation by the different personnel of the various divisions is required in almost all phases of the new product development process. The ideas are screened after generating them. This may take another two months. In the concept development and training phase, the details of the new cellular phone are established. The feasibility of the new phone is also taken into consideration. Business analysis is done through the help of the finance department. The expected selling price of the new phone model is determined in this phase. Other financial ratios and figures are also developed in this phase. This phase normally takes four months. Beta testing and market testing are collaborative efforts by the engineering and marketing division. Nokia produces prototypes of the new product and tests it on different users and industry experts. If the tests conducted generated positive results, technical implementation will follow. The actual engineering design and production layout of the new phone is determined. Units that are ready to be sold in the market are created. Nokia Corporation, after conducting all the phases of the new product development, it launches its new product in press conferences or other channels in the media. It throws events specifically held in order to attract much attention to their new handset model.
The Gantt chart for the new product development of Nokia Corporation is shown below.
Conclusion
Creating task forces in designing and developing a new product is the best way to make a successful product. This is deemed as the best product development approach used in the United States. In this way, phases of the product development process can be done concurrently. Thus the time to develop a new product is shortened. This is especially important in the mobile phone industry. In the industry where Nokia Corporation leads, there is a quick phase of change and innovations. The lifecycle of a mobile phone decreased dramatically. The need for an efficient and effective development team paved the way for the creation of the Nokia Research Center. The Nokia Research Center does its job well by providing Nokia business units timely results for new products.
Different project planning tools can be used to manage and make product designing more effective and efficient. Examples of these are the use of Gantt charts and project management software.
Recommendations
The use of project development teams or task forces is the most effective in product design and development. Organizational culture and management issues must be addressed to create a task force that achieves its objectives. Different project planning tools should be created in order to make product design and development effective and efficient. Other corporations should emulate Nokia Corporation in its way of developing and designing products that are truly winners in the industry.
References
- About Nokia: Company Brochure. (2008) Nokia Corporation.
- Heizer, Jay & Render, Barry (2006). An introduction to operations management. Eight Edition. Pearson Education, Inc. Prentice Hall.
- Nokia in brief (PDF). Web.
- Ulrich, K. & Eppinger, S. (2004). Product design and development, Third Edition. McGraw-Hill, New York.