Table of Contents
The process of new product development is crucial for the survival of firms, particularly mid-sized or small companies. Therefore, in order to withstand competition from multinational conglomerates, small enterprises have to continuously modernize their existing products to conform to current tendencies. The new product development plan starts from the conceptualization and ends with the product’s eventual introduction to the global market. Thus, a thoughtful application of the models and well-reasoned analysis of the company’s performance guide the new product development process for small businesses.
The biotechnology company BioMat Sciences Incorporation has developed a new product called Primagen. The scientists of the BioMat Company have discovered a novel molecule that has been industrialized and commercialized into a significant and robust system. The product is chemically bond to collagen, which is the key protein of teeth, and because of it, it is able to solve the major problem of adhesive and restorative dentistry. Hence, Primagen is a high-performance system that develops the practice of adhesive dentistry by means of highly robust and sturdy substances.
The product under consideration, Primagen, aims to enrich dental devices marketplace in the USA’s fast–paced industry, particularly in a cosmetic dentistry global market. This global market is growing due to the rising focus on technological innovations and increasing issues with people’s oral health. Among the modernizations, there are preceding technological solutions that allow the increasing of patient’s safety, accelerated clinical development, and facilitated regulatory acceptance of the dentists (Solomon, 2015). Furthermore, current developments in molecular diagnostics have paved the way to the goal of personalized medicine, which seeks to ensure the best interests of patients, companies, and healthcare providers. Thus, the ever-increasing middle-class population, an upsurge in customer awareness, and the expenditure of the dental tourism in developing markets are expected to increase the market growth from $ 1.7 billion by 7 % for the period of 2017-2021 (McFadyen, 2015). Moreover, it has been estimated by the Marketsandmarkets that the cosmetic dentistry market can reach 22.4 billion by 2020 (Marketsandmarkets.com., 2015). However, nowadays, a significant deficiency of reimbursement for various cosmetic dental procedures and a high cost of imaging systems can restrain the growth of the market (Solomon, 2015). Therefore, such groundbreaking product as Primagen is bound to effectively propel the target market in the foreseeable future, as compared to its possible contestants. Among the most significant competitors of the product in the sphere of dental health, there are such companies as Patterson Dental, PerkinElmer Incorporated, PeptiPharma, PharmaNetics, or Power3Medical, with their active development of new products (Graphiq Inc., 2017).
Primagen falls within the category of dental service products. As Primagen is the unique product in its marketplace, the company has to protect the industrial property rights. Such protection concerns the distinctive signs, particular trademarks, and geographical indications of the merchandise. Such defense is aimed to protect the results of investment in the development of new technology, thus giving its owners the inducement and means to invest into further research and development activities.
Currently, the product is in its final 5th stage of development in the stage-gate model. It has already been introduced to the market based on a marketing strategy (Cooper, 2014). It means that after a careful testing process and validation, a product moves directly to a launch stage and is introduced to the target marketplace.
New Product Development Plan
Product Life Cycle
The product life cycle defines the period of time over which the new product is developed, introduced to the market, and completely removed from it. While old, long-established merchandises ultimately become less popular, the demand for new modern goods usually upsurges quite rapidly, following their appearance in the market. Accordingly, the cycle can be divided into four clearly defined stages, such as introduction, growth, maturity, and decline. Each stage has its own characteristics that have special meanings for business. The company has to recognize the different life cycle stages and realize that every invention has the limited lifespan. Therefore, the company should invest into new products development in order to maintain its position in the market.
Habitually, the prospective product life cycle starts with introduction stage. This stage is considered the most expensive for the company as it requires spending costs on research, development, consumer testing, and defining customer needs. For instance, the particular example of the product that is in the introduction stage is 3D TVs. In contrast, the growth stage of a new product is characterized by its progress in profits. During this period, the company is able to invest more in the promotional activities in order to maximize the potential of this phase. For instance, such product as DVR discs is in its growth stage. During the maturity period, when the product is already established, the aim of the company is to preserve the marketplace share they have already obtained. Finally, the last phase of each merchandise is decline stage. At this period, the market for a product will start to shrink. A vivid example of the product in its decline stage is videocassette.
The BioMat Sciences’ product Primagen is in its maturity stage of product lifespan. Thus, during this period, the company should invest heavily in marketing. Moreover, during this phase, the products manufacturers should consider further product modifications or improvements of the production procedure. These activities are bound to provide the new product with the competitive advantage.
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While Primagen, as a new product, is at the stage of maturity, its prospective life cycle phase is the decline stage. Therefore, the company should be prepared to switch the manufacturing process to less-expensive production methods and cheaper markets in order to provide the new merchandise with the competitive advantage.
From the perspective of a company’s project manager, a SWOT analysis can offer helpful viewpoints at any stage of the managing effort. Frequently, SWOT is used to either explore possibilities for new efforts or make decisions about the best path for the new initiatives. In addition, SWOT analysis is helpful in the process of identifying the opportunities for success in the context of threats as it helps elucidate main guidelines and make rational choices. With the help of qualitative model, a project manager can determine the need for change, reveal priorities as well as possibilities, and adjust or upgrade plans mid-course. Thus, by focusing on the key foreseeable factors that might affect the product under development, a SWOT analysis provides a clear basis for examining business performance and prospects of the company. Thus, careful obeying of the SWOT suggestions can open wider avenues for company’s products, thereby increasing revenues of the conglomerate.
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The strengths of the company are easy to identify through a dialog with customers, suppliers, and employees. The obtained record will help recognize the areas where the company is particularly strong. The strengths of the product are tightly connected with the company’s assets, as they can be the key to product’s success. For the BioMat Company, strengths can be divided into three distinct categories. First, with its novel molecule, the company demonstrates an expressive difference in the market. Therefore, the assets of the BioMat are positive cash flow, increasing revenues and profitability, and experienced fiscal management. The next category concerns the company’s brand image. BioMat Sciences has a market leadership in a profitable position, a well-established customer base, a decent reputation, a strong brand name, the means for effective research and development, a skilled sales force, attractive designs and innovations, and the ability to make quick decisions. Among the particular Primagen’s strengths, there is the provision of high-quality dental treatments to the customers. For instance, Primagen solves the major problem of adhesive and restorative dentistry (BioMat Sciences, 2013). In addition, it expands the practice of adhesive dentistry by working with extremely durable substances. Among its other strengths, there are unique selling propositions (USP), comfort before and after treatment, affordable price, good reputation, and reduced amount of time spent in the dentist’s chair.
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Even though the weaknesses are often ignored, the company’s project manager must realize that they are the initial step in tackling underperformance of business or product in particular. The weaknesses of Primagen are mainly connected with the financial status of the company. There are insufficient funds for investment in new product development, lack of personal assets and guarantees, inability to afford outside advice, poor office location, non-affordable insurance, lack of instructions in the Internet for the clients, and deficiency of the process of advertising. If ignored, these weaknesses might lead to the lowered revenues, thus decreasing staff income of the company.
Various external changes can provide the company with opportunities that well-controlled businesses can turn to their advantage. Among Primagen’s opportunities, there are the insolvency of a competitor, expanding the marketplace in order to access the potential new customers (e.g. overseas), thus deteriorating competitors’ performance, increasing sales to existing target customers, and developing new distribution channels for the product (e.g. on the Internet). Also, improving the supply arrangements or recruiting a key employee from a contestant may shift the business in the company’s favor. Moreover, such external factors as political or regulatory change, economic or social trends, modernization of technology, changing consumer requirements, and even a demographic change are also able to create new opportunities and increase demand for the product.
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Threats can have far-reaching implications, and they can even destroy the business. Primagen faces such threats as the external influences, like better-quality competitive products or the emergence of new contestants, over-reliance on one supplier or a group of distributors, key personnel exit, loss of a target purchaser, price upsurge from the suppliers, failure of suppliers to meet quality requirements, or creditors reducing credit lines or increasing charges. Moreover, among possible threats, there are rent reviews that increase the costs, the expiry of a lease, or legal actions (e.g. prosecuted by a client). Even the wider business environment may be altered to company’s disadvantage. For instance, lower exchange rates can decrease the revenues from overseas. Even new technology development can create a demand for “environmentally-friendly” products, which can also become a threat to the company.
NPV formula gives the company an opportunity to analyze the profitability of a projected investment or project and forecast possible revenues. NPV demonstrates the difference between the current value of cash influxes and expenditures. The BioMat Sciences Incorporation has a positive net present value, which indicates that the earnings generated by a project or investment exceed the anticipated costs. It is estimated that the company generates $233,016 USD in an annual revenue. The company receives most of its income from its new product Primagen. Therefore, the formula NPV vividly demonstrates that the product under development has positive NPV values and is profitable for the corporation (Graphiq Inc., 2017).
Stage-Gate NPD Model
NPD is a consumer-driven business process that contains the methods and tools for the successful developing of the new product. It is usually supported by top management and organized though project management. Stages involve the activities that are recommended for each project. Thus, NPD Stage-Gate Process includes four main processes after product discovery: definition, development, deployment, and post audit. Primagen is currently at its final stage of development. It means that during this stage, the project managers have approved the product’s final design, finalized its cost, launched the advertisements, and defined the promotion strategy. The product was launched in 2005, after regulatory, operations, and sourcing reviews, as well as after a careful investigation of qualification plan, (BioMat Sciences, 2013).
Among the upcoming decision points, there are adjusting the product to the market’s requirements, gathering consumer feedback about the reliability of the new product, and promoting. In addition, in future, project managers will have to make a decision on whether or not the company should continue investing in the product (a Go/Kill decision). It assists in quality-control frontiers with three aims: calculate business rationale, safeguard the quality of execution, and approve the project plan and resources.
Among the fundamental risk factors that may occur, there are changes in consumers’ demands or new, modernized technologies of competitors. For instance, if the consumers’ needs switch from current product to another due to new trends, the company may lose revenues or even fail entirely. Also, among the foreseeable risks, there is the relationship with suppliers, as they are the key figures in creating a high-quality product at lower price. Technical risk involves loss of revenues due to ineffective engineering, manufacturing, technological, and testing processes. Technical risk of Primagen manufacturing is connected to the process of manufacture, the cooperation with suppliers, and close employee relationship. In contrast, commercial or financial risk concerns extending credits without guarantee. However, BioMat Sciences does not account for any credits that cannot be paid.
Conclusions & Recommendations
BioMat Sciences is a privately held company that has been operating as a Research and Development Life Science business since 1999. Its first product appeared on the market in 2003. Since then, BioMat has become one of the principal developers and dealers of high-quality materials to the oral health marketplace. The new merchandise under consideration is Primagen. The scientists of BioMat Company at the University of Montreal discovered a novel molecule, which was later advanced and commercialized into a substantial and vigorous adhesive scheme.
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Since the time it was introduced to the market, Primagen has managed to propel the cosmetic dentistry marketplace due to its numerous strengths. The company produces high-quality supplies, the leading products in the dental marketplace, and restorative systems that are becoming acknowledged in the field of oral health. The product under consideration enriches the USA’s dental devices marketplace. This market is currently growing due to several reasons, such as rising focus on technological innovations, clinical development, and other issues arising in people’s oral health. However, though the company is operating in the fast-paced market, it has many competitors in the sphere of dental health — for instance, Patterson Dental, PerkinElmer Incorporated, PeptiPharma, PharmaNetics, and Power3Medical. Among the strengths that differentiate the product from its competitors, there are high-quality dental treatments provided to the customers and expanded practice of adhesive dentistry though the means of highly robust and durable substances. Other strengths include unique selling propositions, affordable price, decent reputation, limited amount of time spent in dentist’s chair, and comfort provided before and after treatment.
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In order to protect the company from failing and to increase its revenues, the project manager should be aware of all possible threats and ways of overcoming them. Therefore, the recommendations for BioMat Company are to build sturdy relations with suppliers and clients, foster respectable employee relationships, and ensure that managers have clear and reasonable bonds with suppliers, employees, and customers. Hence, following these rules will allow the company to successfully sell its merchandizes with the focus on capturing leading market positions and creating barriers to entry for the potential competitors.