Social Media

Facebook: Looking to the future.

A. General instructions

1. Look for worldwide data, and not North America data; remember; this is a global strategy course!!

2. Only use scholarly and reliable non-scholarly sources such as Bloomberg, Reuters, Money, Forbes, and Fortune (no answer.com, QuickMBA, eHow, Wikipedia…….).

3. Assignment should be supported by at least three scholarly (peer-reviewed articles), and at least three reliable non-scholarly sources; in addition to the weekly readings and multimedia content listed in the classroom.

4. Assignment should be written in a paper format; not a question and answer format.

5. A half page Introduction should be included. Also, Lessons Learned and a Conclusion should be included at the end of the case study.

6. All questions are to be attempted. Relate your answers to the required reading. Do not restate the information from the case study; go beyond the included information; analyze!

7. Paper should be 6-8 pages long, with one inch margins, 12 point font, double-spacing, and should be posted as a PDF document. The cover page, reference list, and appendix are not part of the page count. All graphics should be placed in the appendix.

8. Use APA format for in-text citations and the reference list.

B. Questions:

1. How was Facebook able to stay ahead of competitors like Twitter, Instagram and LinkedIn over the last 5 years? What strategies did they implement to give them that competitive advantage?

2. Describe the weaknesses of Facebook’s privacy policies and features. What factors contributed to those weaknesses? Did Facebook overcome this issue? If so, how? If not, what recommendations would you propose?

3. What steps should Facebook take to increase the confidence of users, analysts and investors in its innovation strategies?

4. As the social media industry continues to expand, what measures should Facebook take to fend off new and innovative companies from entering the market?

References:

• • Schmitz, A. (Trans.). 2012. Managing new products: The product life cycle.

  • Wineclaw, R.A. (2015). New product management. Research Starters: Business (Online Edition). (text below)

  • Jaruzelski, B., Loehr, J., & Holman, R. (2011). The global innovation 1000: Why culture is key. Strategy+Business, 65.

Case Study

• • Barnett, W., & Han, A. (2011). Facebook in 2011. Stanford Graduate School of Business. Case No. E406. 1-28.

Multimedia

• • Moore, G. (2005, Apr 6). Innovation and inertia. [Video file].

  • Gao, J. (2009, Mar 27). Intel Corporation: Innovation management 2009 group 11. [Video file].

MBA Reference Guides

• • The product life cycle

  • Product diffusion curve

New Product Management

The proliferation of new products on the market today means that most organizations need to be involved in new product development in order to stay competitive. This requires the application of systematic methods to all processes from conceptualization through marketing. Management of new product development efforts, however, can be more difficult than the management of established product lines. To be successful, a new product needs to be managed as if it were an entrepreneurial enterprise. Part of managing a new product development effort is the function of risk management and control. Although some factors in new product development are beyond the control of the manager, many are not. There are a number of tools available to help the new product development manager successfully bring a new product to market.

Marketing > New Product Management

Overview

Although occasionally new products just evolve, more often than not they are the product of a coordinated effort by a product -development team. These teams work together to bring a new product to the market that will help the organization maintain or gain a competitive edge. New product development is the application of systematic methods to all processes necessary to bring a new product to the marketplace from conceptualization through marketing. New products can be improvements on existing products or total innovations to what currently exists in the marketplace.

Particularly in the growth industry of high technology products, change, innovation, and new product development have become a way of life. As a result, new product development is essential to many industries today. More new products are appearing on the market today than ever before. Today's cutting-edge technology frequently becomes tomorrow's distant memory as the proliferation of products on the market continues. This means that for an organization to stay ahead of its competition, it must be on the leading edge of its field. Otherwise, the organization can experience numerous problems that can affect its bottom line including slow or no growth, a decreasing customer base, fewer orders from existing customers, or increasing pressure from the marketplace to lower one's prices. As a result, regular and efficient development and introduction of new products has become a necessity in many industries.

The management of new product development, however, can be more difficult than the management of established product lines due to unpredictability stemming from several sources. First, the new product -development process by definition is a creative process and, therefore, unpredictable. Although less so for products that are merely slight modifications and upgrades to current products, the development of new products or innovations requires the solution to new problems and the development of creative design solutions. These processes cannot be regulated in the same way that calibrating a machine can help to keep widgets on a production line within specification. As such, solutions to problems cannot necessarily be scheduled. Similarly, the reaction of the marketplace to a new product cannot be predicted with 100 percent accuracy. What looks good on the engineering drawing board may be largely ignored by the buying public. On the other hand, what seems like a small change to the designer may receive an overwhelming response in the marketplace. Similarly, although the new product may achieve a great initial response, the demand may quickly die down (e.g., if a competitor releases a more popular product or if there was only a limited market and the product is durable). In addition, delays in introducing a new product into the marketplace can also increase the risk of the venture due to the possibility of the competition releasing a similar product before and thereby gaining the competitive edge. There are ways to help both technical and marketing managers with these problems. However, new product development always involves a degree of risk.

To be successful, a new product needs to be managed as if it were an entrepreneurial enterprise - which, indeed, it is. New product development may begin with brainstorming activities or from the idea of a creative observer of a marketplace within the organization. These ideas may come from many sources, including monitoring of market changes and the actions of the competition, merger and acquisition possibilities, research and development, or analysis of market or consumer buying trends. In addition to these inputs, new product development decisions need to consider an economic analysis to determine the risks of the new venture to the organization.

Risk Reduction

One of the major goals when managing new product development is to reduce risk. Risk is the quantifiable probability that a financial investment's actual return will be lower than expected. Higher risks mean both a greater probability of loss and a possibility of greater return on investment. To be successful, managers of new product development need to manage the risks associated with the new venture. This process includes analyzing the tasks and activities of the project, planning ways to reduce the impact if the predicted normal course of events does not occur, and implementing reporting procedures so that project problems are discovered earlier in the process rather than later. The analysis activity of risk management involves the determination of what factors could cause the project to fail, what the consequences of such failure might be, and how likely failure is to occur. Various formulas are available to help managers make tradeoffs between the risks incurred for various options based on the comparative severity and importance of each risk. For example, if there is a high probability that a given activity in the process is likely to go wrong but it will have little impact on the overall completion of the project, it is probably less important than an activity that has a smaller chance of failing but that would prevent successful completion of the project. Such determinations can be used in the development and implementation of a plan to handle the possibility of failure at any one of these points.

Team Creation & New Product Development

Although some factors in new product development are beyond the control of the manager (e.g., the creative process; actions of the competition), many are not. First, it is important that management develops a team with the appropriate resources and expertise for new product development. Most important to the success of a new product venture is technical personnel with the expertise needed to design, develop, and bring the product to market. Included in the technical team should be personnel who can make technical assessments, design products, and manufacture products. However, although technical expertise and excellence are the sine quibus non of new product development, they alone are not sufficient for success in the marketplace. In addition, the technical team needs to be supported by a marketing support team that can determine how best to position the new product within the marketplace. This team should include personnel who can perform adequate marketing research, sales personnel, and advertising and promotional personnel. The marketing team should collect and analyze data concerning the needs and trends of the marketplace so that the technical team can better design the new product and the marketing team can better position it. This includes information about the wants and needs of potential customers, factors on which potential customers make their buying decisions for this type of product, and the potential customers' buying power. In addition, the marketing team needs to be able to research the competition and their activities, including their strengths, weaknesses, and strategies. This will enable the new product development management team to better craft their own strategy so that they can gain or maintain a competitive advantage.

Project managers are not the only level of management that needs to be involved in new product development. In a study of more than 700 new product development teams, it was found that only seven percent of them became enormous successes. Those that did all had the hands-on involvement of senior-level management (e.g., CEOs, division heads). This involvement was not just perfunctory, however. Senior-level management on the most successful projects played a very active role in the development process from the first day of the project. Senior managers on successful new development projects tended to work closely with the product development team to determine what features or resources are essential for their task and then enable the team to do the best job possible by providing these things. Top-level managers also helped the product development team cut through red tape and circumvent rules as necessary in order to pave the way for their success. In addition, top management on successful projects tended to encourage the team in their work and ensure commitment to the project throughout the organization. This involvement, however, needs to be consistent. The study found that surprise visits by top management can distract the project team from its task and take away precious time from their development work. Although the involvement of top management is essential, these individuals also need to recognize their limitations. Senior managers who try to impose cosmetic fixes on technical problems did not help the project in the long run and also had a tendency to alienate the project team.

Applications

New product development is, in many ways, where the creativity of art or science meets the cold reality of marketing and profits. Although sometimes ideas seemingly occur as a sudden, blinding flash of insight, in most cases they are the end result of a long, hard trail of trial and error; working over a product design until it is a marketable entity. In the best of all possible worlds, the creative process could take place at one's leisure: The new product development team for the fast food restaurant chain could take its time developing the perfect, flavorful, fat-free, low calorie burger; the toothpaste manufacturer could take its time developing the all-encompassing toothpaste that eliminates the need to rinse or floss; the engineering company could tweak a hardware or software design until it does not only what it is intended to do but also do all that the engineers can design it to do. However, due to pragmatic constraints, very seldom is the creative process allowed such free rein.

Constraints upon New Product Development

Organizations have to be competitive to remain in business. For the most part, the longer the time taken by the creative team to develop a new product, the higher the probability that the competition will release the product first. Therefore, in many cases, the pressure on the organization is not only to be the best, but to be the first in order to maintain a competitive edge.

In this environment, it is often true that "perfect is the enemy of good enough." Creativity is put on a schedule and must remain within a budget.

Nowhere is this scenario truer than in the high-tech world of hardware and software engineering. Although in other industries, new product development is often part of an effort to stay ahead of the competition, in the engineering arena, new product development is often performed to a schedule with deadlines imposed by the customer. This situation makes management — the process of efficiently and effectively accomplishing work through the coordination and supervision of others — more important than ever.

To do this, most large development projects for new products require careful project management. This is the process of planning, monitoring, and controlling a unique set of tasks that have a discrete beginning, end, and outcome. The project management process is performed within the three constraints of time, costs, and scope. The goal of project management is to produce a technically acceptable product that is both on-time and within budget. To do this, project management attempts to reduce the risks associated with the project and maximize the benefits; including profit and marketability.

Risk Control

In addition to the analysis and planning processes discussed above, good risk management also requires risk control. This management responsibility includes monitoring the project risks so that problems can be caught earlier rather than later in the process and the contingency plan can be put into effect as soon as possible. There are a number of tools that the project manager has at his/her disposal in order to work within these constraints. For example, critical path management (CPM) is a tool that helps project managers analyze the activities that need to be performed to accomplish the project in a timely manner and determine when each needs to be accomplished so that the rest of the project can proceed on schedule. Managers can also be helped in their jobs by resource loading, the process of examining the project to determine which resources are most critical to the success of the project, and proportioning them among the various activities. Another widely used project management tool is the Program Evaluation Review Technique (PERT), which estimates not only the expected length of time to complete each activity in the project, but also the shortest and longest times that each activity could take. This technique gives project managers a window for each activity and helps them better predict future impact on the project if schedule estimates are not met. PERT also helps project managers determine the exact status of the project and predict where any potential trouble areas lie that might negatively impact either the schedule or budget of the project. The Gantt chart is another popular scheduling tool that lists all the tasks to be accomplished for the project and plots them on the time line with an indication of the projected start and end dates for each activity. Kanban is another popular project management tool, and there are numerous software programs for project managers, including Microsoft Project.

Maximizing the effectiveness of the risk monitoring process, particularly on large new development projects, also requires a risk reporting structure so that those working closely on the at-risk activities can report problems to management in a timely manner and appropriate action can be taken to correct the problem. Large projects for new product development that are being designed on contract to a design specification typically build in periodic formal reviews held between both the contractor and the customer to jointly determine the status of the project and whether or not mid-course corrections are needed. Two major reviews that are often conducted on such projects are the preliminary design review (PDR) and the critical design review (CDR). The PDR (or sometimes a series of smaller PDRs) is conducted to determine whether or not the project team understands the preliminary design well enough to start work on a detail design. The review is attended by representatives of all the significant stakeholders in the project: The technical team, quality assurance personnel, customer liaisons, management, customer representatives, and user representatives. Some of the issues addressed at PDR include what factors are driving the system design (e.g., customer requirements, performance, reliability, hardware or software limitations) and how these are prioritized, what tradeoff analyses between performance and costs have been done to determine the most efficient way to meet the requirements of the design specification and to determine the impact of one section of the design on the rest of the product, a critique of the design alternatives, discussion of how the system will be tested, and discussions of schedule, milestones, problems, and risks. At this time, the contractor may also do a live demonstration or other proof-of concept to support the proposed design.

Another major design performed on large hardware or software projects is the critical design review (CDR). This review is conducted before the design is released for manufacturing. Progressive or incremental CDRs may occur for subsystems of the project (e.g., software engineering, hardware engineering, training), followed by a system-level CDR to determine the completeness and feasibility of the design as a whole. The purpose of the CDR is to determine whether or not the design of the new product is at a point where it is good enough to begin implementation. Participants in the CDR are from the same functions as those in the PDR. Material covered at a CDR may include a discussion and justification of any major changes that have been made to the design since the PDR, a demonstration or discussion of the results of prototyping efforts, specifics of the testing strategy, and discussions of schedule, milestones, problems, and risks.

Terms & Concepts

Design Review: Any of a number of reviews of the product design, usually held between the customer and the contractor to determine the completeness and feasibility of the design at a given time in the contract. Two of the most common design reviews are the preliminary design review (PDR) — held after the completion of the preliminary design but before the start of the detail design — and the critical design review — held before the design is released for production.

Entrepreneur: At its most basic, an entrepreneur is a person who starts a new business. However, the word typically carries with it the connotation of taking risks to turn innovative ideas into profit-making ventures.

Innovation: Products or processes that are new or significant improvements to previous products or processes and that have been introduced in the marketplace or used in production.

Management: The process of efficiently and effectively accomplishing work through the coordination and supervision of others.

New Product Development: The application of systematic methods to all processes necessary to bring a new product to the marketplace from conceptualization through marketing. New products can be improvements on existing products or total innovations.

Program Evaluation and Review Technique (PERT): A form of the critical path method that organizes project task and activity information in a way that allows project managers and other team members to understand which tasks are critical to keeping the project on track and how the other tasks feed into these.

Project Management: The process of planning, monitoring, and controlling a unique set of tasks that have a discrete beginning, end, and outcome. The project management process is performed within the three constraints of time, costs, and scope, with the goal of producing a technically acceptable product that is both on-time and within budget.

Risk: The quantifiable probability that a financial investment's actual return will be lower than expected. Higher risks mean both a greater probability of loss and a possibility of greater return on investment.

Risk Management: The project management process of analyzing the tasks and activities of a project, planning ways to reduce the impact if the predicted normal course of events does not occur, and implementing reporting procedures so that project problems are discovered earlier in the process rather than later.

Stakeholder: In the context of conflict management, a stakeholder is a person or group that can affect or be affected by a decision or action. In conflict, the parties to the conflict are the stakeholders and can win or lose depending on the outcome of the conflict. In a general business context, a stakeholder is someone who affects or can be affected by the decisions and actions of the organization.

Strategy: In business, a strategy is a plan of action to help the organization reach its goals and objectives. A good business strategy is based on the rigorous analysis of empirical data, including market needs and trends, competitor capabilities and offerings, and the organization's resources and abilities.

Trend: The persistent, underlying direction in which something is moving in either the short, intermediate, or long term. Identification of a trend allows one to better plan to meet future needs.

Bibliography

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• Suggested Reading

• Benezra, K. & Khermouch, G. (1996). Silver bullets & brass rings. Brandweek, 37, 55-61. Retrieved June 13, 2007, from EBSCO Online Database Business Source Complete.

• Kuczmarski, T. D. & Silver, S. J. (1982). Strategy: The key to successful new product development. Management Review, 71, 26-32. Retrieved June 13, 2007, from EBSCO Online Database Business Source Complete.

• Maile, C. A. & Bialik, D. M. New product management: In search of better ideas. Journal of Small Business Management, 22, 40-48. Retrieved June 13, 2007, from EBSCO Online Database Business Source Complete.

• Mercer, D. (1993). A two-decade test of product life cycle theory. British Journal of Management, 4, 269-274. Retrieved June 13, 2007, from EBSCO Online Database Business Source Complete.

• Murphy, J. H. (1962). New products need special management. Journal of Marketing, 26, 46-49. Retrieved June 13, 2007, from EBSCO Online Database Business Source Complete.

• Scheuing, E. Z. & Johnson, E. M. (1989). A proposed model for new service development. Journal of Services Marketing, 3, 25-34. Retrieved June 13, 2007, from EBSCO Online Database Business Source Complete.

• Yun, H., & Young Seok, Y. (2013). A Comparative Analysis of the New Product Development Practices Trends: U.S.A. Versus Korean Companies. Academy Of Entrepreneurship Journal, 19, 97-113. Retrieved December 2, 2014, from EBSCO Online Database Business Source Complete.

• ~~~~~~~~

• Essay by Ruth A. Wienclaw, Ph.D.

• Dr. Ruth A. Wienclaw holds a Doctorate in industrial/organizational psychology with a specialization in organization development from the University of Memphis. She is the owner of a small business that works with organizations in both the public and private sectors, consulting on matters of strategic planning, training, and human/systems integration.