1 Explain managers' role in facilitating product development

1. Innovation, Technological Change, and Competition
   Quantum technological change is a major shift in technology resulting from new kinds of goods and services, while incremental technological change is a gradual improvement of products over time.
   1. The effects of technological change – technological change is both an opportunity and a threat.

2 Identify the factors that shorten the product life cycle, and explain why reducing product development time increases the level of industry competition

2. Product life cycles and product development – the product life cycle describes the change in demand for a product over time through the embryonic, growth, maturity, and decline stages.
   1. The rate of technological change – in many industries, product life cycles are short because change is very rapid.
   2. The role of fads and fashions – they determine the length of the product life cycle for many products.
   3. Managerial implications – the shorter the product life cycle, the more important it is to innovate quickly and continuously.

3 Identify the goals of product development, and explain the relationships among them

2. Product Development
   1. Goals of product development
      1. Reducing development time – product development begins with the idea of the product and ends with its introduction into the marketplace.
      2. Maximizing the fit with customer needs – products need to be designed with the customers in mind so that they fit the customers' needs.
      3. Maximizing product quality – poor quality often results from rushing a product into the market.
      4. Maximizing manufacturability and efficiency – how high is the cost per unit and can we make a profit at that cost?

4 Explain the principles of product development, and describe the way in which managers can encourage and promote innovation

2. Principles of product development
   1. Establish a stage-gate development funnel – how many products can we afford to fund with the funds that they need for development?
   2. Establish cross-functional teams – the core members are the people who are responsible for the product development process.
   3. Use concurrent engineering – the simultaneous design of the product and of the process for manufacturing it.
   4. Involve both customers and suppliers – product development needs input from both customers and the company's suppliers to determine unmet needs and projected costs.
   5. Problems with product development – the track record for successful product development is poor.

5 Describe how managers can encourage and promote entrepreneurship to help create a learning organization

3. Entrepreneurship
   Entrepreneurs notice opportunities and marshal the resources needed to produce new products from outside their organization. Intrapreneurs are employees who marshal the resources needed to produce new products within their own organization.
   1. Entrepreneurship and new ventures
      1. Characteristics of entrepreneurs – high on openness to experience and also have an internal locus of control which accepts responsibilities for what happens to them.
      2. Entrepreneurship and management – entrepreneurship and management are two very different things.
      3. Developing a plan for a new business – a detailed business plan is essential for the success of a new business.
   2. Intrapreneurship and organizational learning – a "learning organization" encourages all workers to identify opportunities and to solve problems.
      1. Product champion – a manager who takes "ownership" of a new product and provides the leadership necessary to bring it to the marketplace.
      2. Skunkworks and new venture divisions – a skunkworks is a group of intrapreneurs who work separately from the normal chain of command and develop new products.
      3. Rewards for innovation – it is necessary to link entrepreneurship to rewards if it is to be encouraged.