There are different organizational alternatives to new product development. We describe here a few of them
1.Formation of Venture Groups
Some companies assemble a group of executives from production, R&D, and marketing to develop a new product. These persons come together for a specific purpose and after achieving it return to their respective departments. These groups are called venture groups. Here the marketer provides market feedback on new technologies developed by R&D, who then adopt them to customer needs. The production executives provide feedback on the amount of time it will take to produce the product and other bottlenecks that may arise. In some companies, finance executives are also a part of this group to provide financial dimensions of new product development. This is useful as it helps the marketer to arrive at a price for the new product.
In most firms new product development lies with the marketing group. And within this group the task is of the product management group. The limitation of this organizational structure is that at times, new product development may not be able to consider organizational resources and constraints. Hence, cooperation from other departments may not come through and the new product may never be able to take off.
Some firms assign the task of new product development to their R&D. The limitation of this structure is that many a time R&D scientists may come up with excellent research products but the market may not accept them. The assumption that the â€œbest product wins the dayâ€? may not hold well in the market place.
Few firms have a corporate planning department. It may be named in any manner but the firm assigns to this department the task of environmental scanning and developing of new products. This has the advantage of a specific group of executives responsible for evolving coping strategies to meet environmental uncertainties. But the limitations are the same as in the case of new product development assigned to marketing or R&D department only.
To conclude, new products are important to an organizationâ€™s sustained growth and in some cases even renewal. The firm should be able to effectively manage this function to get higher returns on its investment.