UNIVERSIY OF CEBU LAPU-LAPU AND MANDAUE CAMPUS

COLLEGE OF BUSINESS ADMINISTRATION

OPERATIONS MANAGEMENT AND TOTAL QIALITY MANAGEMENT

NAME:_Cyril Grace A. Booc

________________________________
ASSIGNED TOPIC

CONTENT AND DISCUSSION:

Product or service development strategy

A product or service development strategy can help a company improve innovation and add
value to the design of its products or services. One strategy businesses can adopt in this area is
to create products or services designed to meet the needs of a market.

 What Is Product Development Strategy?

Product development strategy refers to the methods and actions used to bring new
products to a market or modify existing products to create new business.
 Why is product development strategy important?
Product development strategy is important because it uses market research to develop
a plan for success in selling products. Your overall strategy should include the methods
and techniques you will use during each stage of product development. This can help
you overcome obstacles and focus on the most successful strategies. Making plans for
how to develop various products can also enable you to adjust existing products and
grow your business.
 What are the stages of product development?

The seven stages of product development are:

1. Idea development: Idea development involves brainstorming for new products
and ways to make existing products more relevant.
2. Editing and selection: During the selection process, the product development
team determines which ideas have the most potential to do well in the market.
3. Prototype creation: Once an idea has been selected, the company must create a
prototype or draft version of its proposed product.
 4. Analysis: At the analysis stage of product development, the company studies
market research and evaluates the possible problems with the product.
5. Product creation: After incorporating notes from the analysis into the prototype,
the finished product can be created.
6. Market testing: Before releasing the product to a wider audience, products are
often released to a smaller market or focus group. The market testing phase
includes evaluating customer feedback and the effectiveness of the product's
marketing.
7. Commercialization: The final stage of product development occurs when
adjustments are made based on market testing and the product is released to
the full market.
 Product development strategies
Change ideas
Modify an existing product
Increase product value
Offer a trial
Specialize and customize
Create package deals
Create new products
Find new markets

Cost-driven strategies
Cost-driven strategies can help an organization implement an operational strategy to compete
based on price. It is common in markets where the customer bases their decision to buy on the
price of a commodity relative to alternatives.
For example, most people buy staples like flour, sugar and salt based on price because many
brands offer similar products. To successfully implement this strategy, a company may make its
production process more cost effective to offer its products at a more competitive price than
rivals.
 What is Cost-driven strategies?
Cost-based strategies relate to the business decision to base the price of a product on the
costs of production rather than external factors such as competition or the economic
environment. This is traditional approach to pricing which may be appropriate in stable
markets where competition is moderate.
Ultimately the price of a product must exceed its cost or the firm will make a loss.

Outsourcing strategy
Many industries rely on the expertise and supply chain resources of others to produce their
products and services and deliver them to the end-user. For companies that outsource or
offshore some of their operations, there is a need to have a comprehensive outsourcing
strategy that will take care of vendors, quality control issues and logistics.
  The term “outsourcing” refers to a strategy whereby corporate tasks and structures are
given to an external contractor. These can be individual tasks, specific areas, or entire
business processes.

For example, several companies outsource their manufacturing and packaging to foreign
companies to take advantage of lower labor costs. They also hire supply chain management
firms to oversee the distribution of the finished product from the ports to the customer's door.
• 2 Kind Of Outsourcing
1. External Outsourcing- a task given in its entirety to an outside company
2. In-house (Internal Outsourcing)- Given a task to a different area of your
company, or to a department which specializes in it, this is commonly known as
internal outsourcing.

Having an efficient outsourcing strategy can ensure products meet the company's standards,
solve customers' needs at the right price point and help the organization achieve its cost-cutting
and revenue targets. The same can apply to companies that sell services, such as web-based
software. They can outsource the software development to companies in other countries, host
the finished product in a cloud-based system and only interact with customers via online
interfaces such as a website or mobile application.

Flexibility strategy
Some companies use an operational strategy that allows them to compete based on the
flexibility of their product or service or volume. For example, a company can emphasize its
ability to change its products quickly based on customers' preferences. Flexibility can also mean
allowing customers to personalize their orders or the ability to hold a small or large amount of
inventory based on expected demand.
 Strategic flexibility is the process of updating key strategies in a timely manner.