Abstract:

The aim of this paper is to describe some of the techniques which have been developed by three multinational enterprises for use in the complex process of bringing new products to the market place. The development of new products inherently involves risk and uncertainty. This is mainly because new-product development is a sequential decision process plagued by limited information. Large corporations which rely heavily on new products for further growth and increased profits have introduced systems of guidelines and procedures for the orderly development of products through the cycle of conception to commercialisation. The purpose of these guidelines is to define and specify the conditions which are to be satisfied before a crucial transition is made from a development program to a production program. These guidelines are not, however, a strict code of laws. They are directed primarily at providing management with information at critical points to minimize risk and reduce uncertainty.