Value assessment of new product innovations

Abstract

In the commercial industry, an investment in a new innovation can make or break a company. In order for the new innovation to succeed in a competitive marketplace, it must deliver value to its stakeholders. Companies are thus rewarded to assess the value an innovation will deliver to its customers early in the design process. This thesis provides a framework to measure the potential value a new innovation will deliver to consumers based on scoping the project. The framework provides details on creating a model based on the Analytical Hierarchy Process (AHP) by establishing a hierarchy of customer objectives. The application of the framework is then applied to a large company developing two new innovations. Two interesting facts arose from the study. First, the value assessment model can be fractionated to evaluate how new products are valued by multiple market segments. A company can use this information to align a new innovation with a brand segmentation and develop an appropriate strategy to launch products. Secondly, this methodology has been shown to work on incremental innovation and non-traditional products which expand the customer base. The methodology does work when applied to radical innovation which overturns existing value structures and changes the market dynamics.