A synthesis of product development in international business
There is no denying the fact of the quantum leap in the availability of products and services to consumers worldwide, produced by international businesses in their operations around the world.
It is worth noting the variety and sophistication of goods, which have been produced and are still being produced by global firms such as Samsung, Apple, IBM, Hewlett-Packard, Procter and Gamble, Du Pont, Toyota, Mercedes-Benz, etc.
Development of new products by international businesses
The sophistication of goods currently on the international market has been breathtaking, particularly regarding their innovation.
Over the years, there has been an increasing availability of goods, with a significant makeover of their features or a complete jettison of products which were in use in years gone by.
Currently, there is an increasing sophistication, with goods like iPhones, iPads, flat screen televisions, computers, washing machines and many other products.
All these new products have enhanced the quality of life and the facilitation of business operations.
In the present era, there is no longer the use of Walkmans, DVD players, CDs and the like.
Marketing and manufacturing
The pace of technological development in the modern era, leading to the development and innovation in the development of products, has spurred an intense competition in the international business arena, with the rapid churn out of products, which makes existing products obsolete in less than no time.
The rapid increase in the availability of new products developed by international businesses has led to the increasing deployment of technology and innovation, which has created intense competition among global firms.
This requires a global firm, necessarily, as part of its operational model, to commit itself to deploying a significant part of its resources to research and development, leading to the production of innovative products to stay ahead of competitors, catch up with competitors or cause it to fold up.
For example, in the electronics industry, new and innovative products like personal computers, calculators, and mobile phones, etc. have rendered previously existing products like landline telephones, slide rules, etc., obsolete.
An international business, in the application of technology and innovation in developing new products and staying ahead of the competition, must aim at developing products to suit consumer tastes and preferences and to produce goods which are cost-effective to manufacture.
To accomplish this, the international business must aim at creating a close synergy between its research and development (R&D), marketing and manufacturing units.
In creating synergies between R&D, marketing and manufacturing to enable an international business to manufacture goods in a cost-effective manner and cater to the needs and preferences of its customers, the international business would have to do a fine balancing in juggling between achieving harmony in building these synergies, having regard to the differences in consumer tastes and preferences in its various locations.
The preponderance
In developing new products by an international business, it is obvious that there is a preponderance of the influence of R&D in product development. R&D anchors the application of applied and basic research, which is key in the development of new products.
Following thereon, there must be the prerequisites of a strong consumer demand for the new product, which must be anchored on consumer affluence.
There must also be intense competition to spur the development of new products by an international business.
This is due to the fact of intense competition in the global marketplace by firms on the same vertical plane competing to outdo each other in product development, like Apple and Samsung, Procter and Gamble and Unilever, etc.
Obviously, the first business to be successful in product development will, for a considerable period, reap the advantages which come with it in terms of profit maximisation generated as returns from the sale of the product and its general acceptance among consumers.
Correctly synthesising
Though most consumers bask in the euphoria of new products and are more than eager to be associated with the use of new products, it is little known that the path of innovation and technological development, which eventually results in the launch of new products on the market, is fraught with pitfalls.
It is not always the case that a resort to technological and innovative applications leading to attempts at new products, is successful.
Mention can be made of the failure of products, which otherwise held great prospects if they had been successfully launched, like the Newton personal digital assistant by Apple Computers, Sega’s Dreamcast video game console and Sony Betamax format player in video players and recorders, etc. Some of the factors making for the failure of the launch of new products after considerable efforts and good amounts of cash have been expended in their development have been attributed to, among others, product development with limited demand, failure to appropriately commercialise new technology in new products and the failure by a business to adequately exploit factor cost differentials to manufacture a product at an optimum cost.
To circumvent the disappointment in not realising the expected returns and the excitement attendant on innovating research and technology by international businesses in launching new products and thereby realising first-mover advantage, international business and management scholars have posited a raft of measures to be employed by international businesses in realising the objective of successful product development.
The factors proposed are to the effect of correctly synthesising the core competencies of R&D, marketing and production units to achieve the requisite synergies in product development.
The pre-requisite for creating the right synergies for product development is anchored on the fact that the ultimate goal of product development is basically driven by consumer needs, the ease of manufacture of the new product, developing the new product at an optimal cost, and the time to market the new product does not stretch over an unduly long period.
To achieve the object of successful product development, acclaimed scholars and practitioners in international business propose the establishment of cross-functional integration teams across R&D, marketing and production.
The ultimate objective of this cross-functional team is to achieve the goal of accomplishing the conception of product development to its being introduced into the market.
To achieve the goal of the cross-functional integration team, it is proposed that the cross-functional team should be led by a “heavyweight” project manager with access to the high echelons of power in the organisation.
The team should be a representative mix of all the units involved with product development, and lastly, the team should be based in one location to create a sense of bonding and to facilitate rapid communication among the team to handle all nuances involved in the chain of product development.
It is to be noted that product development by international businesses, while creating a euphoria and facilitating easy living, is achieved through painstaking efforts rather than any resort to ad hocism.
The writer is a lawyer with specialisation in international business law.
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