The 5 Stage Process – Your Road-map for New Product Development

The need for lean, rapid and profitable new product development has never been greater. Product life cycles are shorter, competition is more intense and customers are more demanding. Companies that fail to innovate face a grim future. The problem is that winning with new products is not easy. An estimated 46% of the resources that companies devote to the conception, development and launch of new products go to projects that do not succeed – they fail in the marketplace or never make it to market.

Leading companies have overhauled their product innovation processes, incorporating the critical success factors discovered through best practice research, in the form of a Stage-Gate new product development process. According to several independent research studies (i.e. Product Development & Management Association, AMR Research, Booz-Allen Hamilton, etc.) between 70-85% of leading U.S. companies now use Stage-Gate to drive new products to market.

The 5 Stage Process - Your Road-map for New Product Development

A Stage-Gate System is a conceptual and operational road map for moving a new-product project from idea to launch. Stage-Gate divides the effort into distinct stages separated by management decision gates (gatekeeping). Cross-functional teams must successfully complete a prescribed set of related cross-functional activities in each stage prior to obtaining management approval to proceed to the next stage of product development.

How Does the Stage-Gate® Process Work?

Product innovation begins with an idea and ends with the successful launch of a new product. The steps between these points can be viewed as a dynamic process. Stage-Gate divides this process into a series of activities (stages) and decision points (gates).

Stages are where the action occurs. The players on the project team undertake key activities to gather information needed to advance the project to the next gate or decision point. Stages are cross-functional (there is no research and development or marketing stage) and each activity is undertaken in parallel to enhance speed to market. To manage risk, the parallel activities in a certain stage must be designed to gather vital information – technical, market, financial, operations – in order to drive down the technical and business risks. Each stage costs more than the preceding one, resulting in incremental commitments. As uncertainties decrease, expenditures are allowed to rise and risk is managed.

How Does the Stage-Gate Process Work

In addition to the discover stage, there are five key stages:

Stage 0 – Discovery: Activities designed to discover opportunities and to generate new product ideas.
Stage 1 – Scoping: A quick and inexpensive assessment of the technical merits of the project and its market prospects.
Stage 2 – Build Business Case: This is the critical homework stage – the one that makes or breaks the project. Technical, marketing and business feasibility are accessed resulting in a business case which has three main components: product and project definition; project justification; and project plan.
Stage 3 – Development: Plans are translated into concrete deliverables. The actual design and development of the new product occurs, the manufacturing or operations plan is mapped out, the marketing launch and operating plans are developed, and the test plans for the next stage are defined.
Stage 4 – Testing and Validation: The purpose of this stage is to provide validation of the entire project: the product itself, the production/manufacturing process, customer acceptance, and the economics of the project.
Stage 5 – Launch: Full commercialization of the product – the beginning of full production and commercial launch.


The structure of each stage is similar:

Activities: The work the project leader and the team must undertake based upon their project plan.

Integrated analysis: The project leader and team’s integrated analysis of the results of all of the functional activities, derived through cross-functional interaction.

Deliverable: The presentation of the results of the integrated analysis, which must be completed by the team for submission to the gate.

Enterprises and ISVs across various growth phases, be it emerging or expanding, select us to transform their innovative ideas into products. In this competitive marketplace, it’s imperative to have matured development methods, tested approach, IP protection framework, and world-class resources with flexible delivery model. Our methodology includes rapid prototyping and simulation, which gives a sneak preview of a fully functional product.

Our differentiation comes from being a front-runner at the intersection of technical expertise and product development process excellence. We offer a range of services from technical consultancy to running projects and to product development partnership, taking full responsibility for certain parts of the customer’s portfolio and/or product development processes.

How do you benefit?

  • Bench-marked Qualitative Release Metrics
  • Well Documented Design Assessment and recommendations
  • Right mix of Internationally Certified Pre-sales consultants, Business Analysts and project managers
  • On-demand scalable resource at 1/3 of in-premise cost
  • 24 X 7 Support through modern communication infrastructure
  • On-site support – time and material (TAM)
  • Our Partner network helps reduce dependencies on vendor
  • Speed time-to-market and speed up QA/Testing in parallel

Our Offerings at Glance:

  • Product Design and Development
  • Full Product Testing Cycle
  • Customization Services
  • Component Design and Integration
  • Rapid Prototyping
  • Design Consultants
  • Documentation
  • Product Support

Our strategy is to focus on

  • Competent and motivated people: operating globally with an efficient multi-site setup and world-class management.
  • Telecom and mobile sector knowledge: an in-depth understanding of our customers’ business logic.
  • Communications and embedded technologies: profound technical expertise in communications and embedded technologies.
  • World-class product development processes, tools and go-to-market models that are continuously adapted to market demands and industry trends.
  • Repeatable service offerings: a portfolio of repeatable services that consistently add value to our customers.
Step 1: Generating

Utilizing basic internal and external SWOT analyses, as well as current marketing trends, one can distance themselves from the competition by generating ideologies which take afford-ability, ROI, and widespread distribution costs into account.

Lean, mean and scalable are the key points to keep in mind. During the NPD process, keep the system nimble and use flexible discretion over which activities are executed. You may want to develop multiple versions of your road map scaled to suit different types and risk levels of projects.

Step 2: Screening The Idea

Wichita, possessing more aviation industry than most other states, is seeing many new innovations stop with Step 2 – screening.  Do you go/no go? Set specific criteria for ideas that should be continued or dropped. Stick to the agreed upon criteria so poor projects can be sent back to the idea-hopper early on.

Because product development costs are being cut in areas like Wichita, “prescreening product ideas,” means taking your Top 3 competitors’ new innovations into account, how much market share they’re chomping up, what benefits end consumers could expect etc.  An interesting industry fact: Aviation industrialists will often compare growth with metals markets; therefore, when Boeing is idle, never assume that all airplanes are grounded, per se.

Step 3: Testing The Concept

As Gaurav Akrani has said, “Concept testing is done after idea screening.” And it is important to note, it is different from test marketing.

Aside from patent research, design due diligence, and other legalities involved with new product development; knowing where the marketing messages will work best is often the biggest part of testing the concept.  Does the consumer understand, need, or want the product or service?

Step 4: Business Analytics

During the New Product Development process, build a system of metrics to monitor progress. Include input metrics, such as average time in each stage, as well as output metrics that measure the value of launched products, percentage of new product sales and other figures that provide valuable feedback. It is important for an organization to be in agreement for these criteria and metrics.

Even if an idea doesn’t turn into product, keep it in the hopper because it can prove to be a valuable asset for future products and a basis for learning and growth.

Step 5: Beta / Marketability Tests

Arranging private tests groups, launching beta versions, and then forming test panels after the product or products have been tested will provide you with valuable information allowing last minute improvements and tweaks. Not to mention helping to generate a small amount of buzz. Word-press is becoming synonymous with beta testing, and it’s effective; Thousands of programmers contribute code, millions test it, and finally even more download the completed end-product.

Step 6: Technicalities + Product Development

Provided the technical aspects can be perfected without alterations to post-beta products, heading towards a smooth step 7 is imminent. According to Akrani, in this step, “The production department will make plans to produce the product. The marketing department will make plans to distribute the product. The finance department will provide the finance for introducing the new product”.

Step 7: Commercialize

At this stage, your new product developments have gone mainstream, consumers are purchasing your good or service, and technical support is consistently monitoring progress.  Keeping your distribution pipelines loaded with products is an integral part of this process too, as one prefers not to give physical (or perpetual) shelf space to competition. Refreshing advertisements during this stage will keep your product’s name firmly supplanted into the minds of those in the contemplation stages of purchase.

Step 8: Post Launch Review and Perfect Pricing

Review the NPD process efficiency and look for continues improvements. Most new products are introduced with introductory pricing, in which final prices are nailed down after consumers have ‘gotten in’.  In this final stage, you’ll gauge overall value relevant to COGS (cost of goods sold), making sure internal costs aren’t overshadowing new product profits. You continuously differentiate consumer needs as your products age, forecast profits and improve delivery process whether physical, or digital, products are being perpetuated.