To many companies their main source of growth is new product development. Creating new products can go a long way to enhancing customer loyalty as well as attracting new customers. This is especially true in more mature markets and industries.
There are many new product development strategies that companies pursue. Some add new extensions or capabilities on to their existing products. Some try to replicate or expand upon a competitors product. Some seek to develop products that are counter-cyclical to their existing products or product lines so as to moderate their income streams.
Ultimately there is no right or wrong avenue to pursue. It all depends on the strengths and capabilities of the company and its people, and/or it may depend on the market or industry where it operates.
All told one of the best new product strategies we’ve come across is that from an avionics company that has been around for nearly a century. This company has a long history of success and its core product line truly can be called iconic within the aviation industry. It has brand recognition and loyalty beyond reproach.
As explained by one of the company’s vice presidents, their new product development strategy was to take a product that they were already selling, tug on the wire to see what’s at the other end, and see if they could make that as well.
While that approach may seem simplistic, its beauty is in its simplicity. If we can make – and sell it, let’s not forget about the selling – if we can make and sell this, why can’t we make and sell that? Because they are connected – in this case, literally – there is most likely some functional connection there as well. Not to mention that it most likely is purchased or specified by many of the same people – i.e. their existing customers.
The more you examine that philosophy, it just makes so much sense in so many ways. And, despite the fact that the company is in the aviation industry, it’s not rocket science.