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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
Case Teaching Notes for Part I
LEGO
Chapter 2
An important learning point in this case is that Lego tried all of the familiar recommendations to
improve innovation (explore full spectrum of innovation, open innovation, blue ocean strategy,
disruptive innovation, hire diversity and creativity, “walk in the customers’ shoes,” and build an
innovation culture. And none of these worked. According to Wharton professor David
Robertson, the problem was not that these “innovation truths” are actually false. The real
problem was that Lego had geared up a great innovation engine – it could turn out innovative
new products with the best of them – but the innovation engine lacked direction, or as Robertson
puts it, a “guidance system.” To re-orient itself, Lego would need to provide direction to its
innovative process, so that it would turn out “successful new products” and even
“company-saving new products,” rather than just “new products.”
A guidance system requires answers to three questions: where are you, where do you
want to go, and how should you get there. In the case of Lego, that means having a solid grasp
What Lego did to stave off bankruptcy was brilliant. First, they realized that the
innovation engine was too busy spinning out new products. It had to be slowed, so fewer
Lego completely redefined innovation within its organization, broadening the definition
to mean product, process, communication, and organizational innovation. Lego gathered
information from users and retailers, and product teams aligned with customer communities,
such as those that grew around the phenomenally-successful Mindstorms product line.
Designers and marketers received customer feedback so that they could concentrate on
Lego’s innovation initiatives paid off. Between 2007 and 2010, a bad period in the toy
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
Note: This solution is largely based on Anonymous, “So What Did Lego Do Anyway?”, Visions,
36(1), 2012, pp. 24-25.
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
TASTYKAKE SENSABLES
Chapter 2
First, does the Tastykake process compare well with the process described in Chapter 2? Yes, it
seems to, though the sequence was not too clear in the presentation, nor was it in practice I
suspect, because of the unique nature of packaged goods. Unless there is a major technical
breakthrough, packaged goods can often go to prototype at the time of concept testing. This
yields target market, positioning statement, price, and perhaps other aspects of the new product.
But, in general, think about their strategic statement (fill a gap, etc.), about the concept
generation (mapping, etc.), concept/project evaluation (concept testing, technical checks, etc.),
development, and then launch. This is the sequence shown in Figure 2-1.
Note too that the steps were not lockstep, and there were no clearcut stage-gates. It seems
that, at the urging of senior management, the goal was to “get it done.” Certainly, the decision to
On another issue, three basic causes of new product failure are: no need or want; product
didn’t meet the need or want; product was not well marketed. The Sensables group knew about
Having said all that, how about the second question at the end of the case: Regardless of
how well Sensables do in the market, would you question anything they did? Students will,
because there seem to be clear omissions. Here are a few of the issues:
1. Gap and trend are important, but incomplete. There must be more to Tastykake’s new
4. Little was told to us about the specifics of the marketing program, nor was there any
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
distribution channels and truck delivery services would be used. But, and here is a question that
arises frequently from students, do we ever really know that low-carb Tastykakes are going to be
The last question in the case has been answered in the previous section just above, where
Update: as of this writing, Tastykake was still selling Sensables products, but with a
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
THE LEVACOR HEART PUMP
Chapter 2
The new products process at use at WorldHeart has many similarities to that shown in the
chapter. For one thing, it begins with an opportunity identification/strategic planning phase. The
external environment suggests an active, older American market that wants a rich, full life,
unencumbered by heart disease. Increasingly, we have “medical consumers” that would make
the market for heart pumps desirable. Competitors such as Thoratec are showing healthy sales
figures for their heart pumps. Due to Medicare changes, increasing numbers of hospitals are
doing heart-pump implants, suggesting that the market is still in healthy growth. As far as
specific company strengths go, WorldHeart has the Levacor pump, a new category of pump that
aids the patient’s own heart rather than replacing it. This category is attracting attention, and is at
the time of the case in early feasibility trials in Europe and FDA approval in the U.S. is still far
off.
Subsequent phases in the new products process need to be pieced together, but there is
enough in the case to make some educated guesses. Given the interest in developing a better
In their search for technologies that could be applied to this market need, Medquest hit
upon magnetic levitation technology, which had been used in large applications such as power
turbines but never in something small enough to be inserted into a human body. Eventually, they
developed a small magnetic levitation system that could be used as a blood pump. It had no
When the product made it to the development stage, Medquest began rapid-prototype
development, using CAD software to design the product and then develop a real-size working
A major difference between this process and the textbook one is that there was apparently
little checking with customers (doctors, in this case, as they will make the decision as to which
heart pump would be used). In this case, this is not a significant omission, as Medquest and their
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
Uncertainties at the time of launch include: not knowing whether the FDA would ever
approve this product, and technologies designed by competing firms that result in even better,
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
NEW PRODUCT STRATEGY AT KELLOGG
Chapter 3
A changing business environment may force firms to rethink their strategic emphasis; this can
have important implications for new product development planning. Due to trends in cereal
consumption, Mr. Gutierrez made long-term plans that would eventually increase the non-cereal
component of Kellogg’s product mix. At the same time, Kellogg’s was (and still is) almost
untouchable in terms of cereal brand equity, knowledge of the distribution channel and
advertising for cereal, and so on, so looking too far afield in seeking out non-cereal directions
While student-developed PICs will, of necessity, be quite diverse, all of them should
contain some of the abovementioned points in the background section. The focus section
perhaps could address how cereal-producing technology might be applied to a new non-cereal
product such as a new granola bar, or the Snack ‘Ums or Krave products described in the case.
Goals and objectives might be more difficult for the students to nail down, especially for specific
brands, but these might be stated in terms of how the new brand would contribute to overall
A good way to wrap this case up is to go to kelloggs.com, and to follow the link to the
new products. As of the current writing, the new products showing up on this page are proof of
the successful implementation of the corporate strategies outlined in the case. Most of these are
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
THE HONDA ELEMENT
Chapter 3
This case illustrates the effective use of product platforms in the auto industry, and also allows
the student to infer what the PIC might have looked like. Many companies do product
platforming, but in many cases this is almost an afterthought—we have this wonderful product,
how else can we use the technology, the components, the manufacturing process? This is
bottom-up platform thinking. Honda here illustrates the application of a top-down platform
strategy: the goal from the beginning is to build the platform with the idea that many different car
models can be built from it over several years. As noted in the chapter, this is basically a
requirement in the auto industry, where platform development is prohibitively expensive and the
costs must be recovered through time, and possibly across many car models.
As the case illustrates, Honda thinks of new car product development in terms of
subsystems, and the case mentions four for the Element: exterior, interior, suspension, and power
train. It was important for Honda to get the exterior right; for example, the young, “Generation
Y” target market required extra durability. At the same time, the exterior is one subsystem where
Some changes were made to both suspension and drive train subsystems to improve the
appeal of the Element to the target market. For example, the existing CR-V chassis was linked
with the power steering gearbox used in cars like the MDX, with the result that the Element ran
low to the ground, and wide tires were added. The existing 2.4 liter VTEC engine, adapted
somewhat to the Element to deliver higher horsepower, was used for the power train. In short,
The parts of a product innovation charter that might have existed for this product, would
include some of the following ideas. (Note again, this is the charter that might have existed at the
start of the project not the thinking at the end.)
Background: Much of the case gives the background. Honda wants to launch a light truck,
but with the particular target audience of Generation Y adults, particularly males, about to buy
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
Arena (area of focus): The target market needs were clear, especially once the
observational research had been done. This was a market that participated in X-Games,
identified strongly with its peers, was in favor of social and environmental causes, and was not
Goals: Probably sales, market share, profitability objectives, in particular with respect to
Guidelines: We could expect that Honda would be focusing on meeting the particular
needs of its target customers in all aspects of car development, but in particular with the very
visible exterior and interior subsystems. Exterior designers were encouraged to try radical new
What can be learned from the Honda case? There are many opportunities for platforming
in order to achieve cost effectiveness, while at the same time avoiding lookalike products.
Honda Element development and manufacture was cost-effective due to the savings on
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New Products Management 11e / Crawford & Di Benedetto Part I Overview, and Opportunity Identification/Selection
Course Concepts for Part I
We have for a long time handed out a list of key questions or topics at the start of a semester.
They are used to guide review at exam time. Some are personal interests, much as yours would
be, and the list varies from term to term as our personal interests change, but here are some of
those concepts covering Part I.
1. The true rate of new product failure, and why it occurs?
2. Why do people resist innovation?
3. What are the strategic elements of new product development?
4. Why do new products mate technology and market?
5. Sequence of steps in the new product process. What and why?
6. Are services different from tangible products, relative to product innovation?
7. Are industrial products different from consumer products, relative to product innova-
tion?
8. Are radically new products different from close-to-home new products? When do we
need probe-and-learn product development, and why?
9. Product Innovation Charter:
What it is composed of.
How to determine the focus.
Innovativeness, etc.
10. Why is there a Miscellaneous category in the section on Goals and in the section on
Guidelines?
11. Why opportunity identification is so critical, and difficult.
12. The evolving product.
13. Multifunctionality, the team concept, miniaturized company within a company.
14. Third generation product development.
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