GlobStrat R&D User Guide

Transcription

1 GlobStrat R&D User Guide Business Strategy Corporate Strategy Alliances & Partnerships Daniel Paul, Ph.D Paris-Dauphine University, MBA-ITP Harvard Business School

2 R&D Congratulations. As R&D V-P of your executive committee, you are in charge of Innovation and Certifications: your mission consists in getting on time the new products and services plus the certifications which are essential to your differentiation. Overview The R&D arena consists in managing innovation (products & services), quality and ecology of your products. In addition, the R&D department is responsible for ISO 9000 (Quality) and ISO (Ecology) certifications. Transversally, your responsibility is to take care of Innovation and Certifications, not only in terms of development but also in terms of communication and coordination with the other functions involved in these processes: adaptation to customers needs, contribution to you Customer value and Brand reputation, with the Marketing-Sales V- P on one side, coordination with the Production and HR functions, on the other side, plus obtaining the needed resources from the Finance V-P. Decisions The R&D decisions consist of: Technology & Product development Quality product labs ISO 9000 certification Services development Ecology product labs ISO certification Innovation Innovation is a very important success factor but it requires large investments and some planning. Indeed, bringing innovative products to market is a 2 to 3 years process: Step 1 Step 2 Step 3 Technology development Product development Product sales Technology development Initially, your company only has the T product. You can opt to bring innovative products to market. The first step of the innovation process is to develop new technologies. You can choose between 3 technologies: Storage (S): high capacity memory chips, Communication (C): 4th generation mobile networks,, Image (I): high definition display, Each market segment has a different attractiveness to technologies, as explained in the Marketing chapter. R&D Decision: technology development Technology development is the first stage of your innovation strategy. You may develop 3 new technologies: Image, Storage, Communication. Each market segment (c.f. market survey) is waiting for one main technology plus one or two technologies. Investment: Asset = K - Staff = 5 engineers for one year + 1 engineer subsequently x 100 K The development of a new technology does not deliver any product, only a technological capability to develop it. Once developed, each technology can be integrated into simple products (one technology) or hybrid products (two technologies) or complex products (multiple technologies). GlobStrat "2

3 Product development The second step of the innovation process is to develop new products, based on previously developed technologies. This is normally done a year after having developed the technology, but sometimes (depending upon the scenario) iit can be done in the same year., if you were willing to accelerate innovation timing. Check the availability of the product development option when you technological de elopement option is activated With 3 technologies - Storage (S), Communication (C), Image (I) - you can develop as many as 7 new products: New products based on: Technology S Technology C Technology I Simple products TS TC TI Hybrid products T-SC T-SI T-SCI T-CI T-SC T-SCI T-CI T-SI T-SCI The Market survey (Marketing intelligence) tells you the attractiveness of every technology on each market segment, the idea being that each market segment is sensitive to one main technology or to Hybrid products mixing this main technology with another one or to complex products mixing this main technology with the two other technologies. New Products NOT based on the main technology may sell but they will not create Customer Value nor help to conquer market share: they will behave as substitutes. Product development takes 1 year. The subsequent year, you will be able to sell your new products. R&D Decision: New Product development The development of a new product is the second step of the innovation process. A product developed in year N, can be sold on the market 1 year later (N+1). Investment = 1,000K - Staff: 5 engineers for the development year, 1 engineer subsequently. Annual cost = 1 component per unit sold & per technology included + associated quality costs The value created by new products depends on the technology sensitivities of each segment (market survey). The Value Creation intelligence survey (50 K) analyses the cumulated contributions of each attribute (innovation, price, quality, services, reputation, agencies) to the Customer value of each market segment. Once a product has been developed, staffing is reduced to 1 engineer for maintenance and enhancement, for a 100 K annual cost. Services differentiation New services development will enable further product differentiation. Services are available 1 year after their development. Services development You can hire a team to develop new service capacities (among six options - described in the Sales chapter). The development team is also responsible for training all staff involved in the delivery of such service. R&D Decision: New Services development The development of a service capability is the first step of the customers Service innovation process. In order to be able to activate the concerned service to customers in the Sales page, you need first to hire 2 engineers developing this capability and the training of yours agencies for its delivery, next year. : Investment: Asset = no asset - Staff = 2 engineers - Annual cost = 200 K per year & service The choice of the service capability corresponding to your strategy depends on the customers that you want to target, given their sensitivity to services and the type of service that they will appreciate. Your service offering efficiency, in terms of Customer Value creation, will also depend upon the number of sales agencies installed for delivering this service. Once developed, services can be activated for selected market segments, for a cost of 30 per unit. GlobStrat "3

4 Quality differentiation and ISO certification Your quality efforts are measured by two indicators: a quality index, reflecting your quality culture and the quality of your products an ISO 9000 certification, requiring specific criteria for each level (9001 to 9004) The quality index depends on multiple elements: your investments in product quality labs, production quality labs, quality training programs, training budgets, equitable supply relations, and a high level of motivation among your staff reflected by the CSR index of your company. The quality index reflects your overall quality efforts and can thus only increase progressively. Your may develop a good quality index without any ISO 9000 certification. However, ISO 9000 certification requires specific levels of quality index. And due to the progressive increases of the quality index, your ISO 9000 certification will likely only be able to increase by 1 level per year. Product quality labs Product quality labs allow for improving the quality of your products, which will increase sales for segments that are sensitive to quality (as explained in the Marketing chapter). In addition, product quality labs are required to achieve ISO 9000 certification (1 lab per level). R&D Decision: Product quality labs R&D Quality labs improve the quality of your products, which is reflected in the Quality Index (base 100 in year 0) and in the ISO 9000 Quality certification. There are 4 labs to choose from: they all have a comparable impact. Your quality index may progress up to 300 depending on your quality labs (R&D and Production) and upon you quality training programs & budgets, but you will have to choose in between Quality and Productivity when choosing your manufacturing machines, in order to achieve such levels.. Investment: Asset = 500 K - Staff = 1 engineer permanently - Annual cost = K 3 conditions are checked to obtain the ISO 9001 to ISO 9004 Quality certification: Products Quality labs, in R&D: 1 to 4 labs Components ISO suppliers certification: same level for each segment Quality index (100 in year 0) > 125, 150, 175, 200 The checking of these conditions is shown (in green) in the R&D forecast. ISO 9000 certification You can obtain official ISO 9000 certification, attesting of the quality management systems of your organization. There are 4 levels, with 3 distinct criteria to coordinate: Certification ISO 9001 ISO 9002 ISO 9003 ISO 9004 Product quality labs 1 lab 2 labs 3 labs 4 labs Components quality ISO 9001 ISO 9002 ISO 9003 ISO 9004 Quality culture index (100) * ISO 9000 certification is global and covers all markets, segments and products of your company. In particular, ISO 9000 components selection must cover all segments. The Production forecast allows verifying you meet all required criteria. However the forecasted quality index carries some uncertainty... Sustainability differentiation The «sustainability» culture of your company may progress over years, depending on your efforts to develop among your staff a strong sense of ecological and social responsibility. These efforts depend not only on your investments in ecology labs, but also on your qualitative efforts in terms of training programs and budgets, supplier relations, or local partnerships, all engaged in this «sustainable» direction. GlobStrat "4

5 This culture is difficult to measure and to communicate externally, but it will find a official recognition: your ISO certification. Product ecology labs Product ecology labs enable improving the ecological attributes of your products, which will increase sales for segments that are sensitive to ecological reputation (as explained in the Marketing chapter). In addition, product ecology labs are required to achieve ISO (1 lab per level). R&D Decision: Product ecology labs R&D Ecology labs improve the ecology of your products, which is reflected in the ISO certification. There are 4 labs to choose from, but they all have the same impact. Investment: Asset = 500 K - Staff = 1 engineer permanently - Annual cost = K 3 conditions are required to obtain the ISO to ISO certification: Products Ecology labs, in R&D: 1 to 4 labs Components suppliers certification: same level for each segment Supplying of your workshops in renewable energy = 25, 50, 75, 100 % The checking of these conditions is shown (in green) in the R&D forecast. ISO certification (Planet) You can obtain official ISO certification, attesting of the ecology management systems of your organization. There are 4 levels, with 3 distinct criteria to coordinate: Sustainability certification ISO ISO ISO ISO Renewable energy 25 % 50 % 75 % 100 % Components ecology ISO ISO ISO ISO Product ecology labs 1 lab 2 labs 3 labs 4 labs ISO certification is global and covers all markets, segments and products of your company. In particular, ISO components selection must cover all segments. The R&D forecast enables you to ensure that you meet all required criteria. Intelligence To best define and adjust your innovation strategy, you should purchase the Marketing surveys from the intelligence reports. The surveys provide, for each market, segment sensitivity to technologies, quality, services, and reputation. In addition, the R&D intelligence report will provide you with the technologies and products developed by your competitors. The R&D intelligence report costs 20 K. Your starting point At the beginning of year 1, your R&D starting point is: 1 Product: T No technologies No ISO 9000 certification No ISO certification GlobStrat "5