New Product Launch: where to focus

Hi!

In order to approach this like a strategy consultant, please forget the typical "case book approaches". As a consultant, you would never start your work with doing arbitrary qualitative research to "understand the market", "understand the customers" etc. This is the definition of inefficiency, aka "boiling the ocean", because you don't even know what you're looking for! I would have been an extremely poor Engagement Manager at McKinsey if I would have structured the team's work like this! From my experience, conceptually approaching a case like an actual strategy engagement is much more effective and powerful than book frameworks.

What you do is the following:

1. Clearly define/boil down the core question (e.g., "Should the client start producing and selling the new product X?")

2. Verifying the underlying objective (e.g., "The client wants to maximize its earning, i.e., profits.")

3. Based on 1 and 2, you outline the primary criterion according to which the question will be answered. (e.g., "The additional value which we generate by launching this product needs to significantly exceed the corresponding investment costs over the client's investment horizon.")

Then, the only thing you have to do in the case is to quantify each element of the criterion ( (a) additional profits we can make, (b) investment need, (c) timeframe to consider) --> ONLY AFTER HAVING OUTLINED THE CRITERION, you start looking into qualitative elements (like customer preferences, demand development etc.), because now you have narrowed down the field sufficiently to do this in an efficient manner! You use this qualitative information in order to quantify the elements of the decision criterion (see 2. above; the qualitative aspects are the drivers of the elements of your criuterion (value, time frame, investment)), and not in an arbitrary and untargeted way as desribed in most typical case book).

Cheers, Sidi

P.S.: The primary criterion (as described under 2. above) is mostly accompanied by two secondary criteria. Besides ensuring that the value creation is suffiucent, the client also needs to make sure that:

• The required capabilities to launch and operate the new product line are in place or can be built/acquired
• There is willingness and capabilty to manage the corresponding risks that might come along with this strategic decision

Hi,

First of all - I can hardly imagine a case when someone has developed a product and is now deciding whether to launch or not:) You would rather have:

1. New product case - when you have to understand whether to develop a product or not. Or what should be the pricing, etc.
2. New market case - when you are entering a new market and already have a product on the other one

In any case, I recommend:

a) Asking more about the product in the clarifying questions part

b) Always starting with the market since you need to understand the big picture first

Best!

I find that in most cases, you need to know rather little about the product itself. You are mostly interested in what sets it apart from existing products, and are looking for qualitative answers. I typically ask these questions in the clarifying questions. Analyzing the market is then the first thing I pitch in the framework.