New Product Development challenges

There is more than one reason why companies should create new products. Developing quality new engineering products consistently and having a stronghold in your niche market is one of the most powerful but difficult activities in business (Clark and Wheelwright 1995). 75% of new product developments fail, which shows how challenging it can be for the new engineering product design team to succeed.

product development challenges
Figure 1. New product development challenges

Product designers face various challenges during the development cycle, however, not all of them are technical. Some of the challenges are due to external factors such as cost, economic changes, competitor influence, company policy etc.

Let’s look into some of the key general non-technical challenges that product design engineers face in detail.

5 Challenges of new product development


As an engineering product designer, one of the hardest things is to justify the decisions and manage trade-offs during the embodiment design stage.

Figure 2 BMW Concept car (credit: google images)

For example, a car can be made to look like the BMW concept car (figure 2) and also made lighter, faster, more efficient etc, but all these would probably increase manufacturing cost and the car will cost more than the targeted segment of the market can afford. Hence, to keep the unit selling cost down, compromises have to be made to the original product requirement specification without sacrificing some of their original unique selling points.  The challenge here is to identify, understand and manage such trade-offs in a way to increase the product’s success.

Product economics

Product economics is all about profitably developing and selling an engineering product to solve a customer’s problem.

Figure 3. NPD cost ( credit: google images)

Every product designer who had to make a trade-off decision would know that the decision was made most probably due to economics. The 8 stages of new product development require a large investment and a lot more effort?? than you think at the start. To get a reasonable return on investment, the end product must be both appealing to customers and relatively inexpensive to produce.

As the cost breakdown shows in figure 3, on average an engineering product design accounts for only 5% of the total NPD cost but its influence on the rest is 70%. Even a simple design for assembly (DFA) change of using snap-fits instead of self-tapping screws can save thousands of pounds. No matter how simple the product is, there will be hundreds of such decisions that would have an impact on the final selling price.

Thus, the challenge is to make the correct decisions during the product design stage so that subsequent costs (material, labour & overheads) can be kept to a minimum.

Global competition

Due to globalisation and international marketplaces such as Amazon, eBay, Alibaba, etc., the global market can be accessed from anywhere in the world. Global competition is one of the biggest challenges companies face during product development due to this large and diverse marketplace.

Figure 4. Global competition (credit: google images)

A company could start developing an engineering product unaware that an overseas competitor is already halfway through theirs.

Here the challenge is to design and develop a product to launch at the right place and time for the right price before your competitors.

Time pressure

Most technology-driven engineering product design companies compete on NPD cycle time, so they can launch the product first in the market. This was highlighted by Stalk’s (1988) term “time-based competition”.

Figure 5. NPD Time pressure (credit: google images)

Due to this global competition, the entire new product development from concept to market launch is often carried out to a very tight delivery schedule.

Without the time pressure, product design technical challenges can be managed, but due to the tight schedule technical issues have to be resolved and decisions made quickly.

Hence the challenge is to make the managerial decisions to avoid project overrun without compromising the design specification within the specified timeframe.

Dynamic environment

Although the product design and development duration depend on the product type and the industry, in general, it’s safe to say that it takes on average 9 – 12 months. It would take longer if the products need approval for FCC, CE etc.

Figure 6. NPD Dynamic environment (credit: google images)

In this period, technologies advance, customer needs change and evolve, competitors introduce similar products and the economic environment shifts.

Hence, the challenge is to make crucial decisions promptly and invest money in a constantly changing environment to succeed.