MUY691

New Product Development

Opportunity Identification

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The product development process
Opportunity is an idea for a new product.

An opportunity is a
§ product description in simple and basic form
§ a newly sensed need
§ a newly discovered technology
§ match between a need and a possible
solution.

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The Bolt laser-based cat toy, the original 4
product of the FroliCat brand
Opportunity Identification Example
Types of Opportunities

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Tournament Structure of Opportunity Identification

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 FroliCat Sway Opportunity Funnel

1 1 1
mission PD product
statement process launch

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explored
50 7
opportunities selected
Pharmaceutical Drug Development
 Effective Opportunity Tournaments

§ Generate a large number of opportunities

§ Seek high quality of the opportunities generated

§ Create high variance in the quality of opportunities

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 Opportunity Identification Process

1. Establish a charter
2. Generate and sense many opportunities
3. Screen opportunities
4. Develop promising opportunities
5. Select exceptional opportunities
6. Reflect on the results and the process

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 1. Establishing a Charter

For example, the charter for the FroliCat effort was:

Create a physical product in the cat toy category

that we can launch to the market within about a year
through our existing retail sales channel.

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2. Generate and Sense Many Opportunities
Where do opportunities come from?
internally generated 46%

customer 23%

competitive product 11%

sales force 5%

university 4%

independent inventor 4%

distribution partner 3%

other partner company 2%

supplier 2%

Source: Terwiesch and Ulrich survey of 524 managers in 13

diverse service and product industries, October 2006.
 Techniques for Generating Opportunities

I. Follow a Personal Passion

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 Techniques for Generating Opportunities

II. Compile Bug List

III. Pull Opportunities from Capabilities (VRIN)

§ Valuable
§ Rare
§ Inimitable
§ Nonsubstituable

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 Techniques for Generating Opportunities

IV. Study Customers

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 Techniques for Generating Opportunities

V. Consider Implications of Trend

VI. Imitate, but Better

§ Media and marketing activities of other firms

§ De-commoditize a commodity
§ Drive an innovation “down market”
§ Import geographically isolated innovations

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Techniques for Generating Opportunities

Examples of the imitate-but-better approach: 18

SpinBrush, Starbucks, Altoids
 Techniques for Generating Opportunities

VII. Mine Your Sources

§ Lead users
§ Representation in social networks
§ Universities and government laboratories
§ Online idea submission

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 3. Screen Opportunities
§ Web-based surveys

§ Workshops with “multivoting”

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 4. Develop Promising Opportunities

§ List the major uncertainties regarding the

success of each opportunity

§ Perform the tasks to resolve uncertainties

with the lowest cost in time and money

§ Tasks
§ Informal discussion with a few potential
customers
§ Patent search, etc.
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 5. Select Exceptional Opportunities

§ Real-Win-Worth-it (RWW)
• Is the opportunity real?
– Is there a real market that we can serve with the product?
– Consider the market size, potential pricing, and availability of
technology.
• Can we win with this opportunity?
– Can we deliver the product in the required volume at the
required cost?
– Can we establish a sustainable competitive advantage?
– Can we patent or brand the idea?
– Are we more capable of executing it than competitors?
• Is the opportunity worth it financially?
– Do we have access to the necessary resources (financial,
developmental, supply chain)?
– Will the investment be rewarded with appropriate returns?
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5. Select Exceptional Opportunities

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6. Reflect on the Results and the Process
Some questions to consider in reflecting on the
opportunity identification results and process
are:

§ How many of the opportunities identified came from

internal sources versus external sources?
§ Did we consider dozens or hundreds of
opportunities?
§ Was the innovation charter too narrowly focused?
§ Were our filtering criteria biased, or largely based on
the best possible estimates of eventual product
success?
§ Are the resulting opportunities exciting to the team?
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What drives the quality of the best opportunities?

§ Mean quality of the opportunities in the process.

§ Variance in quality of the opportunities in the process.
§ Number of opportunities generated in the process.
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§ Accuracy of evaluating the opportunities generated.