Proton New Product Management

1.0 INTRODUCTION

In business world, new product development is the complete process that bringing a new product to market. Companies with clear product development visions know what types of investments are required to maintain their market positions. As life cycles of new product generations become shorter, companies can ill afford to delay their product development activities. Product development has therefore become the centerpiece of today’s competitive strategies. Being first to market for next generation products is what makes companies like Intel and Microsoft success. Due to advance of technology, rapidly changes of the market situations and increase number of competitors, many electronic industries were realized the benefits engaging in the new product development process (NPD).

New product development process is defined as disciplined and defined set of tasks and steps that describe the normal means by which a company repetitively converts embryonic ideas into salable goods and services (Earle, 2004). NPD is divided into various categories (e.g. new-to-the-world products, new category entries, additions to product lined, product improvements and repositioning). There are extreme challenges, risk and uncertainty when a company involves in new product development as time and money spent are of no guarantees to success, therefore it is crucial for that new product process must respond the 3 unique inputs which are the right quality product, at the right time, and at the right cost. According to Crawford, five phases sequentially in the new product development process are 1) Opportunity Identification and Selection; 2) Concept Generation; 3) Concept/Project Evaluation; 4) Development; 5) Launch. Each of the steps will be discussed below.

2.0 BACKGROUND OF THE COMPANY

Proton Holding Berhad is the holding company for the Malaysian national carmaker Proton (Malay acronym for Perusahaan Otomobil National, �National Automobile Enterprise’) which was established in 1983 under the direction of the former Prime Minister, Tun Mahathir Mohamad. Proton is listed on the Bursa Malaysia

Based on technology and parts from Mitsubishi Motors, production of the first model, the Proton Saga began in September 1958 at its first manufacturing plant in Shah Alam, Selangor. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were being used as technologies were transferred and skills were gained. Until the end of the 1990s, the car’s logo featured the crest from Malaysia’s cost of arms, featuring a crescent and a fourteen-pointed star. The new Proton logo features a stylized tiger head. By 2002 Proton held a market share of over 60 per cent in Malaysia which was reduced to barely 30 percent by 2005 and is expected to reduce further in 2008 when AFTA mandates reduce import tariffs to a maximum of 5 per cent.

Proton has three primary national policy objectives:

• To spearhead the development of component manufacturing industries,

• To acquire and upgrade technology and industrial skills within the automotive manufacturing industry, and

• To strengthen the international competitiveness of Malaysia’s industrial capability

3.0 RESEARCH OBJECTIVES

 Determine how to develop a new product

 Analyze and evaluate of an organization that reflects an understanding that relevant literature on NPD process

 Study the differences between NPD process that of literature as comparison to those that practices in industries

 Make recommendations for idea approach

4.0 FINDINGS

According to Crawford (2003), there are 5 basic stages of product innovation process.

Figure 1: Crawford new product development process

4.1 Opportunity Identification and Selection

In stage 1, many firms try to look for new opportunity in order to gain the market competitive advantage to stand strong in the business world. It is hardly to define the new opportunities because the market and the environment are changing rapidly and consumers’ trend shifting regularly. There are numerous ways that suggested firms to identify new opportunities that can create new sales potential. For example look for emerging trends like increase globalization of freight flow meant more global opportunities, find fringe markets that are becoming mainstream, find bottlenecks in the flow of trade and seek to eliminate them and looking for “ripple effects” on business opportunities where trend toward “immediacy” has led to products arises such as electronic banking or 24-hours food court (Crawford, Anthony, 2003).

4.2 Concept Generation

In stage 2, concept generation generally mentioned as one of the important steps in new product development. According to Crawford; it is necessary to apply the strategic guidance of a product innovation charter, finding and training creative people and then creating an environment for the employees to work, which can helps an organization to increase the level of productivity when their employees are motivated to work. Again, there are various ways of idea collection given by consumers, employees, suppliers, competitors in order to generate a new product whereas their ideas can also be use to upgrade current product of a particular organization (Golder, 2000). To understand the concept generation process, there is an essential to understand how it relates to the ideation process; the concept is built around idea of technology, form and benefits (Crawford, Anthony, 2003). Form is the physical of the product, technology is the source by which the form was attained where it defined as product innovation as the power to do work and finally benefits will be the value of the product which it will benefits to the customer in term of function and quality or what they desire