Risk: New product development carries more risk than simply attempting to increase market share
The firms develop new products targeted to its existing market segments. A product development strategy may be appropriate if the firm's strengths are related to its specific customers than the product itself. In this situation, it can leverage its strengths by developing a new product targeted to its existing customers.
Product development is the process of
- Identifying user needs/desires
- Translating those needs/desires into specifications
- Designing a product/system/experience that you think will meet those specifications
- Verifying your design does indeed meet the specifications described in step 2.
- Validating that meeting the specifications in step 2 means you address the needs/desires in step 1.
- Repeat until you think your product is good enough to launch.
- Launch.