Risks are inevitable with any project but can be particularly detrimental during the product development process. Risks can be the difference between make or break when it comes to a product’s success if you have not taken them into consideration at the outset.
Product development is a long and challenging process but can bear fruit if you get it right. Knowing what risks lie ahead is crucial.
Here is a guide to the risks you should be aware of in product development.
Know your target market
Technology and public interest shift rapidly. Relevant products today might not have demand in the future. The design and ergonomics of a product are also often personal opinion but highly influenced by a larger group of people, which is why you should know your target market.
Take cars for example.
In the USA, cars are larger in size and more powerful but Japanese cars are smaller, compact, fuel efficient and reliable.
A Toyota Yaris will not be a popular pick for cruising on the Route 66, same goes for a Chevrolet Malibu in the narrow streets of Japanese cities. This example shows that different market groups can play a significant role in global sales and the success of a company both nationally and globally.
Therefore, it is crucial to futureproof your product by analysing its longevity, knowing your markets, understanding your consumers’ needs and demands, and investing in continuous product development.
Securing investment for product development
Securing funds and investments is the first task in the product development process, however often potential investors are most interested in prospects and numbers – how much money they will make.
Most companies that are developing a product tend to search for investment with only ideas, sketches and diagrams. The risk associated with this is rejection from potential investors who often need evidence and functional parts before committing to the product development journey.
Often large amounts of funds can be invested in product development, however, it is easy to overspend on unnecessary features and tools for the product which could have been saved for the second phase of product development. Remember, it is not always about how many sales the product generates but rather the costs and net revenue that dictates its value and success.
Finance, management, planning and leadership within an organisation all play a key role in product development to ensure its successful roll out to market.
Design and manufacturing products
As the old saying goes ‘Rome wasn’t built in a day’. When designing something novel you always start with a blank piece of paper and will revise and alter features and properties to achieve the optimal design.
A specific and trusted manufacturing partner is also vital for producing consistent parts with the desired quality.
It is important, however, to consider the workload of manufacturers which is often affected by its market.
For example, a high precision engineering manufacturer producing bespoke automotive parts will have high demand during race season.
If the manufacturing phase of the parts is not planned correctly, delays in production or even no interest in collaboration from the manufacturing partner can all push back the product development and miss key deadlines.
Additive Manufacturing (3D printing) is a very powerful tool to implement, test and market a product before spending thousands on tooling and manufacturing.
Protecting your Intellectual Property
The Internet contains vast amounts of information, which is extremely helpful, but on the flipside people can ‘borrow’ ideas.
Marketing and PR is important when promoting a product but when the design is not protected with patents, trademarks and other legal documents, all the hard work of the organisation is vulnerable to copying and replication.
Once a product has been developed and information becomes public, competitors will be the first to check, experiment and analyse the product to try and create their own version.
Protect your intellectual property and invest in a specialist that can set up trademarks or patents for your product.
Factors out of your control
Unforeseeable changes in circumstances can produce risks that can impact a product’s success, such as economic fluctuation, the weather, laws and regulations.
For example, in the US a substantial percentage of car sales were produced by Ford, GM and DaimlerChrysler – the Big Three – but with increased oil prices, consumers have shifted towards smaller and fuel economic vehicles, such as Japanese cars.
Today in the automotive industry, all economic fluctuation, regulations and climate change awareness has shifted the market to electric and hydrogen fuel cell technologies and a zero-carbon future.
Identifying risks before you embark on developing a product and putting solutions in place will ensure your product development journey is more streamlined, successful and the future of your product is secure.
Our team of product designers has experience in product development and can help identify potential risks in your new product development process.