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The Business Analysis Process of New Product Development

A study of small and medium size enterprises

Written by Luis Barrios, Jonas Kenntoft

Paper category

Master Thesis

Subject

Business Administration>Management

Year

2008

Abstract

Thesis: Small and medium-sized enterprises Different organizations have different definitions of enterprise size. The following definitions are used in this study: According to the European Commission's definition (as shown in Table 3.1), a small and medium-sized company is defined as a company with fewer than 250 employees and an annual turnover of no more than 50 Euros in millions, and/or annual assets and liabilities The total amount of the table does not exceed 43 million euros. According to the European Commission, micro, small and medium enterprises are socially and economically important because they account for 99% of all enterprises in the EU, provide approximately 65 million jobs, and contribute to entrepreneurship and innovation. The relevance of innovation orientation and small businesses reflects the changes in the modern market environment, in which new product development and differentiation have become important aspects of business development for many companies (Appiah-Adu and Singh, 1998). However, SMEs do not conform to the traditional marketing characteristics of marketing textbook theory (Tomes and Phillips, 2003). According to Tomes and Phillips (2003), there is documented evidence that SMEs have unique characteristics that distinguish them from the traditional marketing of large companies. These characteristics may be determined by the inherent characteristics and behavior of the entrepreneur or owner/manager; they may be determined by the internal size and development stage of the enterprise. These limitations can be summarized as: limited resources (such as financial, time, and marketing knowledge); lack of professional knowledge (owner managers are often generalists rather than experts); Appiah-Adu and Singh (1998) pointed out that small and medium-sized enterprises usually have relatively simple Organizational structure and the characteristics of a more unified culture. In addition, small and medium-sized enterprises are characterized by a limited range of products and customers, thus minimizing the requirements for formal procedures developed to collect and process customer or market information for decision-making. In addition, smaller companies are often characterized by informal and short-term decision-making strategies (De Toni and Nassimbeni, 2003: Appiah-Adu and Singh, 1998). For our research, it will be interesting to investigate the debate in Appiah-Adu and Singh (1998) regarding the formal requirements of NPD procedures, which will be minimized in small businesses. 3.2 New product development Before starting to discuss the new product planning process, you should first determine what defines a new product. In this part, a definition will be discussed to develop a definition and a path for this article. The following parameters define the "new product", which is the ultimate goal of the new product planning process. According to Rudder (2003), practitioners and researchers use the term new product development to describe a series of product developments. However, we believe that there is almost no consensus on what a "new product" is. Rudder (2003) continues to believe that a broad definition is the most useful, and should include the development or introduction of new products from manufacturers, or the introduction of old products into new markets. The types of innovations that can be introduced are: Brand reformulation: When the branded product has basically not changed in the past few years. The company can reformulate its brand strategy. Product line expansion: When a company decides to expand a successful product through, for example, new flavors or colors. New market: Find new markets for old ideas. New products: looking for new product ideas for new or old markets. Imitation products: produce products that are similar to existing products. To quote Rudder (2003), “Only 10% of all new products launched in the past five years are truly innovative or new to the world”. If these figures are true, then in actual operation, the launch of "new" products is quite rare worldwide, which means that 90% of "new" products are not new products. However, they are new to the manufacturer in most cases and may have gone through the planning process and development process. It is concluded that the purpose of the research is to study the business analysis process of small and medium-sized enterprises, without distinguishing between new products of the world or new products of manufacturers. 3.3 Defining concepts In this section, we will discuss concepts such as forecasts, forecasts, estimates, income, earnings, etc. It is necessary to clarify them in advance to avoid any possible misunderstandings. Prediction is to estimate some future events or conditions beyond the control of the organization and provide the basis for management plans (Herbig and Milewicz, 1994). According to this, forecasts and estimates are not so far apart, and we can treat them more as synonyms. Forecasting is a great tool because it represents a major part of the business decision-making process. (Herbig and Milewicz, 1994) In addition to this input and according to Waddell and Sohal (1994) Read Less