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Market Analysis

Purpose

To understand the the project context and the project itself.

Deliverables
  1. A report that will be read by faculty and company.
  2. In-class presentation followed by discussion.

Background

The purpose of the opportunity analysis (OA) is to help the team shape its mission statement, form and realize the challenges of its product development strategy, and understand the company's current situation and strategy. Another purpose is to create an early, well-defined task which forces a close working relation between the students and the company and serves to kick-start projects.

**************Note: Info below this line will be updated for 2014-2015...stay tuned*************

Customer Needs Plan
Your project’s customer needs research efforts will provide critical information on customer needs, customer reaction to alternative product concepts, and customer reaction to a proposed prototype product. Obtaining this needed information from potential customers can be challenging. You need to think through: 1) what market segment (group of potential customers) you will assess, 2) who you will contact that can provide the information that represents the needs of the customers, 3) how you will obtain the information that you need from your contacts (interviews, observation of activities, questionnaires, 4) how you will ensure some degree of standardization in the information obtained by different team members, and 5) the best way to document and communicate the insights that are obtained.

Your plan should be informed by the Kimmel lecture on customer research and by the chapter in the Ulrich & Eppinger textbook on finding customer needs.

Your customer needs research plan should contain (1) a description of the relevant stakeholders and decision makers who might be interviewed (market segment and sub-segments), (2) which segments you plan to interview to understand customer needs (see the Customer Needs assignment), (3) how many people you will interview in each category and the date that those interviews will be completed, (4) how you will find interviewees (be specific) and (5) the research objective(s) for your interviews. Items 1-5 should be about two pages in length. Follow this with the draft (or final) version of your interviewer guide for the interviews.

Target Market Definition 
describe the general market that your product targets. Segment that market and describe each segment in detail. Indicate which segment is the primary target for your product and which, if any, is the secondary target. If relevant, describe other segments.


Rest of the OA

The PA includes information about the company and about the project, including a preliminary assessment of project viability. The PA is created through internal and external research. Data is gathered via interviews with company representatives, the study of company public and private (when made available) records, on-site visits of design and manufacturing operations (where feasible) and searching of relevant secondary research materials. If working with a large company, the PA should focus on the business unit with which you are working, rather than on the company as a whole, although the latter should be presented in summary form. For example, if you were working with 3M on a Scotch Tape product, your PA would concern the Scotch Tape group, with summary information on the 3M Stationary and Office Supplies Division (in which the tape group sits) and more summary information on the 3M company as a whole.

Producing a comprehensive PA requires considerable and detailed information gathering by the team. Company representatives from marketing, engineering, manufacturing, sales and finance are prepared to have student team members contact them for copies of internal company documents and interviews. For the company, this is an opportunity for their business unit to be evaluated by neutral, outside observers and the resulting report should be of value to their organization.

Procedure

Read through this description. Formulate a strategy and plan among your team members for completing the project by the due date. Call your primary company contact to discuss and arrange interviews with relevant company representatives and review of appropriate company documents. The company contacts have seen this PA project brief and are expecting your call. Conduct interviews, read company documents, research secondary information. Assign a report editor and a presentation organizer. Outline report. Write report sections. Edit. Produce presentation. All team members read and critique final report.

Mark the first page of the report with "Confidential, Do Not Copy" in red.

Deliver the report to the course and to the client. Archive in your Google Drive.

Presentation

Along with the report, in class, your team will be giving a presentation that summarizes the highlights of your project analysis. The length of the presentation is 10 minutes (8-10 slides). No more than two people should present.

A note on presenting: Part of the NPDBD experience is setting a high professional bar. While this 10-minute presentation may seem minor, use it as an opportunity to hone your professional presentation skills. Pay attention to content, message, slides and delivery. Presenters should rehearse before delivering in class.

Report Format

Use the sectioning numbers and titles shown in bold. Reasonable deviations are permitted. Document length will be 10-20 pages, single spaced.

Title page: Name of company, name of product, names of student team members, date. (1 page)

Table of Contents. (1 page)

1. The Company

1.1 Description --- Brief company description. Name, core products, customers, history, size (yearly sales, employees), locations, key business units... Like what you might see in a ValueLine report on the company. Description of business unit with which you are working, if applicable. Size (people and sales), key products, where it sits on a company organization chart. Where products are manufactured. (1-2 pages). If the company is a startup or pre-startup, briefly describe the origin of the company or the opportunity.
1.2 NPD Process --- Description of existing company new product development process. What it is, who is on product development teams, what strategy is followed. (1 page)

2. The Project

2.1 Description --- Brief description of the project you are working on. (1 page)
2.2 SWOT Analysis --- A Strengths/Weaknesses/Opportunities/Threats (SWOT) analysis for the project. If you don't know how to do a SWOT, the Wikipedia entry is a good start. (1-2 pages)

3. The Context

3.1 Existing Solutions --- Describe how customers currently solve the problem your product is trying to solve
3.2 Competitors --- Describe direct and indirect competitor companies: name, products, strengths, weaknesses. Restrict to domain of your project.
3.3 Information Sources --- Sources where information on existing solutions and competing products can be found. For example, titles of key trade publications, the leading trade shows (include date and location), textbooks, academic journals
3.4 Key Opinion Leaders --- Names, titles and affiliations of at least five influential people (e.g. leading cardiac surgeons for a pacemaker product) whose opinion on the field or product would be valued. These could be local, national, or international.

4. Project Assessment

Preliminary assessment by the group on project viability, that is, the teams own judgement about the opportunity and the product. Be honest. One way of approaching this is to ask if you would invest your own money in the project (for startups), or if you would fund the project if you were the VP (established companies). (1 page)

Appendix

A.1 Company Sources --- Names, titles, contact information of all those in company who could help you with the project. 
A.2 Company Products --- Photos and data sheets of existing related products from the sponsoring company. 
A.3 Competitor Products --- Photos and data sheets of products from other companies that directly or indirectly compete.
A.4 References --- Sources of information used to prepare the report.


Questions to Ask

Here are questions you can ask of the company to gather data for the report. Not all questions will be relevant to all projects and there will be additional questions relevant to your project which do not appear on this list. Your team is free to use its best judgment about what to include and what not to include, keeping in mind that the primary purpose of the PA is to understand the company, its market environment, and the project context. Yes/No style questions can be answered "Always, Sometimes, Seldom, Never" and always try to get the interviewee to elaborate on short-answer questions. You may want to interview more than one person to gather multiple perspectives. The information should refer to the business unit (BU) you are working with.

Company
  1. Where is the company's historic strength and competitive advantage? Engineering? Marketing? Finance? Sales? Takeovers?
  2. Company history.
Product
  1. Who are typical customers for your products (end users and others along the chain)?
  2. What's the typical supply and distribution chain?
  3. What's the typical flow of information back to the developers from customers about the product?
  4. Who typically makes the purchasing decision for your products?
  5. In what applications are your products typically used?
  6. Where are your products made?
Competitors
  1. Who are your primary competitors?
  2. Who has what market share in markets you and they serve?
  3. Which competitor do you worry most about?
  4. What distinguishes your company from your competitors?
  5. What do customers think about your product versus your competitor's?
New Product Process
  1. Does your company have a formal NPD process? How long has it been in place? How is it updated?
  2. How is "new product" defined?
  3. Who is responsible for NPD?
  4. How are product ideas generated and where do they come from?
  5. Are new product ideas championed by senior management?
  6. Does the NPD process tailor itself for individual projects?
  7. Who is on the NPD team?
  8. How is the NPD team leader selected?
  9. How are NPD teams rewarded?
  10. How are team decisions reached?
  11. How are customers involved in the development process?
  12. Is a stage-gate (regular checkpoints) process used?
  13. Who does the sign-off at stage-gate checkpoints?
  14. What is the average time-to-market for new products?
  15. How are projects terminated?
  16. Are your products formally benchmarked against those of your competitors? How?
  17. What project management tools are used?
  18. Does your company have a stated new product development goal? What is it?
  19. How many new products did the company produce last year and in the last 5 years?
  20. What are the most important factors for new product success?
  21. What companies do you think have a model NPD process?

Customer Research
  1. What market research methods are used to determine customer needs?
  2. How is the voice of the customer integrated into the NPD process? determined?
  3. What market research methods are used?
  4. Who gathers customer needs data?
  5. Do you use focus groups? Which firm? Regional? National? Global?
  6. Do you use large sample phone or mail surveys? Which firm conducts?
  7. Do you use one-on-one interviews? Who writes the script? Who conducts the interview?
  8. How is data from customer interviews or focus groups analyzed?
  9. What are customer needs for a project you are working on now? How were they determined?
  10. What are your market research strengths and weaknesses?
Engineering Design
  1. What is the role of industrial design in product development?
  2. When and how are prototypes used? What form of prototypes are used?
  3. How are product materials selected?
  4. How are suppliers selected?
  5. What CAD systems are used?
  6. What engineering analysis software is used?
  7. Is 3D printing used? Where? What technologies?
  8. Where are records required during the design and manufacturing process?
  9. What are key engineering design strengths of the company?
  10. When is prototyping done?
  11. What do typical prototypes look like?
  12. What are in-house resources for prototyping and model building?
Manufacturing
  1. Where/how are current product manufactured (internal/out-sourced, location, tools, level of automation)?
  2. What volumes are typical?
  3. How is quality assessed and maintained?
  4. When does manufacturing get involved in the product development process?
  5. How are change-orders handled?
  6. What are manufacturing strengths?
  7. How do you decide what to fabricate in-house and what to contract out?
  8. What goes into the decision to purchase capital equipment for manufacturing?
  9. How are pilot runs of new products handled?
  10. What planning tools are used?
  11. How is product inventoried/shipped?
  12. How are suppliers picked and qualified?
  13. How are incoming parts or materials inspected?
Financial
  1. How are financial forecasts for new products done?
  2. Can we see a sample spreadsheet for a current product (or at least the spreadsheet headings)?
  3. What financial criteria are used to evaluate new products?
  4. What are typical assumptions for viable profits on a new product?
  5. How are general and administrative (G&A) or other overhead costs allocated among new product development projects?
  6. What's the accepted level of uncertainty for financial forecasts? 
This Project
  1. What is your vision of the project?
  2. Draw me the product (if you can)?
  3. Guess a range for the price of this product?
  4. Why this project?
  5. How important is this project to the company (business unit) strategic goals?
  6. Why is your company doing this project with the university?
  7. What advantages of having UMN students and faculty involved?
  8. What are management's objectives for this project?
  9. What skills do you expect student team members to have?
  10. What budget and resources are available for the project beyond the fee paid to the university?
  11. What's the procedure for handling small project costs?
  12. Who from the company will attend weekly team meetings?
  13. Who else in the company needs to be informed about the project on a periodic basis?
  14. What are company's primary patents in project area? (Read them.)
  15. What are company core technologies in the project area?
  16. What are major risk areas for project?
  17. What should the end-of-project prototype(s) and business plan look like?
  18. What other deliverables are there?
  19. What are the relevant trade publications which you read to understand the market and competitors?
  20. Which trade shows do you go to?
  21. Are there any up-coming trade shows that one or two students can be sent to?

Resources for Project Assessment


People to Interview at Company
  • Project primary marketing contact
  • Project primary engineering design contact
  • Manufacturing contact
  • Financial contact
  • BU (Business Unit) chief (director/VP, or company CEO)
  • Patent attorney or patent administrator
  • Local sales representative or sales person
Internal Company Materials to Examine
  • Annual reports (past 5 years)
  • Employee handbooks, divisional brochures, benefits booklets
  • Org chart
  • Profiles of senior managers
  • Recruiting packages
  • Corporate histories
  • Company and BU newsletters
  • Company and BU organization charts
  • BU press releases (past 3 years)
  • Recent trade/media articles about BU
  • Videos: products, marketing messages, ads, training tapes, convention tapes
  • Product catalogs, product brochures, product data sheets
  • New product development process document
  • Memos and notes related to current project
  • Web site
External Sources
  • Star Tribune (5 year search on company)
  • SEC Edgar (for 10-K annual reports)
  • FDA (for company 510K, PMA and warning letters)
  • USPTO or Google Patents for patents
  • Catalogs and web sites of competitors