Strategic New Product Development for the Global Economy

Citation

Goldsmith, E.B. (2008), "Strategic New Product Development for the Global Economy", Journal of Product & Brand Management, Vol. 17 No. 2, pp. 128-128. https://doi.org/10.1108/10610420810864757

What is refreshing about this book is that professors from Japan and the USA joined together to tackle the subject of global product development. As we all know, innovation, production, distribution, and consumption have gone worldwide. A recent trade book chronicled an author's attempt to not buy anything from China for a year. It turned out the task was nearly impossible. Given that phenomenon, it makes the subject of this 12‐chapter book even more important as we move forward in research, testing, and marketing, fully realizing the potential of international exchange.

The authors of Strategic New Product Development for the Global Economy start with the case of Shiseido Tactics hair dressing for men and the differences worldwide in men's hair treatments. In the 1950s, men preferred pomades and oils, creating a greasy mix that made hair shiny and held it tightly in place. After changes in “the look”, by the 1980s the Shiseido Company undertook the development of a new hair dressing for men. Twenty‐one different scents were tested in the USA, Japan, and Italy. One was selected, and the name “Tactics” was chosen. It never became a hit but the overall sales suggested success and longevity.

The authors, Toyohiro Kono, Professor Emeritus of Business Administration of Gakusuin University in Tokyo, Japan, and Leonard Lynn, Professor of Management Policy of Case Western University in the USA, modestly note there are a lot of books on product development. But, their book is different in the way it approaches the topic and in the unique cases such as the Tactics one. Many of the Japanese cases have not appeared in print in English before. The authors point out that “Over the past several decades U.S. and Japanese firms have produced many more successful new products than firms from other countries” (p. xv). Their prime emphasis is on the importance of new product development (NPD) as part of corporate strategy.

The cases are not limited to the USA and Japan; there are many European examples. More than 100 NPD cases are given. What is truly original is that they don't just talk about developing new products. They explain why companies choose to eliminate products that no longer fit their corporate strategy. If you have ever wondered why a company drops or sells a product line or brand that appears to be successful, this book explains why such action is taken.

A unique aspect of the book is Chapter Seven on creativity in research organizations. How do you make creative research effective for the company? To answer this question, they provide the results of a survey the authors conducted of 461 Japanese companies in a wide range of industries. They found the more successful companies have top managers who exercise strong control over research yet at the same time they encourage a free atmosphere. The company management can differentiate between finding solutions to immediate problems without losing sight of long‐term projects. Creativity is defined as the ability to produce work that is both novel and appropriate.

Since Chapter Seven appears at the mid‐point of the book, the chapters that lead up to it explain what new products are, why some fail, what is involved in the process, how to create a new product concept, and how to organize NPD. Teams and incubator departments are described. To give examples of coverage, Chapter Three gives cases from the Canon personal copier to women's apparel. Chapter Five is about creation, not the biblical kind, but about the Toyota Lexus and finding the right product feature mix. Chapter Six is about organizing the effort.

So you can see what a methodical book this is, sort of a how‐to with examples. As a professor, if you want to freshen up your cases, this book will do it for you. If you teach global product development, it is essential. If you take business students to Japan in the summer as my university does, this book would be perfect background reading and then follow it up with an actual headquarters or plant visits. As a creative or a product manager, there are practical implications, steps to follow, and pitfalls to avoid.

While the development process is going on, assessments are taken along the way and these are explained in Chapter Eight, leading up to the all important product launch (the fun part) in Chapter Nine. Cases in this chapter include USA Today and Asahi Super Dry Beer. Competition and cooperation are discussed. Knowing when to stop the NPD process is the subject of Chapter 10. When do you let it go? What do you eliminate? What do you want to avoid? Most of all, irreversible declines – a wrong turn leading to the demise of the company – are to be avoided. GE and IBM are cited as companies who keep reinventing themselves.

The book ends with explaining NPD trends in Chapter 11, including cases from Fuji Xerox and film and summing up with success factors in NPD in Chapter 12. Even though NPD is unique, there are commonalities we can learn from. Kono and Lynn say top management's role in NPD is critical. We need leaders with vision and clearly defined goals. Second to that is the strength of the strategic planning department. To break that down further, their survey revealed four important categories: “linking the product to the company's core competencies, having well‐designed decision‐making parameters, achieving effective internal cooperation, and performing a well‐executed product launch” (p. 226).

Perhaps most useful is the historical nature of this book, as it describes older forms of global NPD when “almost all of the multinationals were headquartered in the ‘Triad’ nations of the U.S., Japan and Western Europe. To the extent NPD took place in other countries, it seldom amounted to much more than adapting Triad products to the more primitive conditions in other countries. A German automaker in Mexico, for example, redesigned its cars for service on rougher roads” (p. 79). Today, it is more likely to have multinational teams work on site so they are attuned to local conditions and consumer needs. They say that sometimes it is difficult to find managers at the site with requisite technical skills, and there are risks involving intellectual property rights. If there is one take‐away from this book it is the need for more cooperation and understanding, true in all aspects of global interaction.