The PDMA Handbook of Innovation and New Product Development, 4th Edition

CHAPTER ONE NEW PRODUCTS: WHAT SEPARATES THE WINNERS FROM THE LOSERS AND WHAT DRIVES SUCCESS

Robert G. Cooper

1.1 Introduction

The central role of product innovation in business strategy coupled with poor innovation performance by many firms has resulted in an urgent quest for solutions – how to improve new product (NP) practices and performance. That begs the questions: What are the factors that underlie NP success? Why are some new products so successful? And why do some companies achieve outstanding performance in product innovation? In short, what makes a winner – that’s the topic of this chapter.

1.1.1 Critical to Firms, but High Failure Rates

Product innovation – the development of new and improved products and services – is crucial to the survival and prosperity of the modern corporation. New products launched in the last three years account for 27 percent of company sales and 25 percent of profits (Buffoni et al. 2017).

The secrets to success in new product development (NPD) are complex, however, and elusive for many firms. Witness the high failure rate of new products and the poor innovation performance in industry – 40 percent of launched products fail (but not the common assertion that 80 to 90 percent of new products fail; Castellion and Markham 2013). If one starts measuring earlier in the NP process, out of every 7 to 10 NP concepts, on average only one becomes ...