subject: Product Development As A Viable Outsourced Production Method [print this page] Product development is the process of bringing in new products or services to the market. It is often perceived as the first step towards generating and commercializing new products and services. Product development encompasses different areas of business and engineering such as idea generation, product design, detail engineering, market research and market analysis.
Ideas for new products are often obtained from basic research an analysis of the markets strengths, weaknesses, opportunities, and threats. In order to get an insight on new product lines or product features, companies can also make use of data gathered from factors such as market and consumer trends, the company's research and development department, competitors, focus groups, employees, salespeople, corporate spies, and trade shows.
The product development process is an integral part of businesses regardless of the industry. It helps create new products and services, while allowing the company to measure the success of these products and services in the market. As important as product development is to the business, sometimes companies can do better by outsourcing product development.
Product development outsourcing has become a trend in todays modern business landscape. Companies who do not have the necessary expertise or manpower to complete certain business functions often make use of third party companies to perform those functions for them. Companies who outsource their product development process save money and resources by eliminating costs associated with product development, and instead allocating part of their resources to funding the outsourced third party provider.
The concept of product development outsourcing has helped thousands of companies reduce overhead costs and expenses that would have exceeded their capabilities had product development been assigned to in-house personnel. In fact, many business processes apart from product development would be less costly when outsourced to third party providers.
Product development outsourcing is not to be confused with product development sourcing. While the former deals with having third party providers performing certain business functions at an agreed process, the latter refers to a number of procurement practices, aimed at finding, evaluating and engaging suppliers of goods and services. Product development sourcing can also refer to a component of supply chain management, for improving and re-evaluating purchasing activities.
