How does a stage-gate model cut product-launch failures?
In today’s fast-paced and competitive business landscape, launching new products is a high-stakes endeavor. Companies invest significant time, money, and resources into developing and launching new products, but the reality is that many of these launches end in failure. In fact, it’s estimated that up to 80% of new products fail to meet their expected sales targets. This can be a devastating blow to a company’s bottom line and reputation. However, there is a way to mitigate this risk and increase the chances of a successful product launch: the stage-gate model.
The stage-gate model is a structured approach to product development that divides the process into a series of distinct phases, each with a clear set of objectives and a “go/no-go” review at the end. This approach ensures that only the most promising ideas are pursued, and that resources are allocated efficiently. In this blog post, we’ll explore how the stage-gate model works and how it can help organizations cut product-launch failures.
The Stage-Gate Model: A Structured Approach to Product Development
The stage-gate model typically consists of five to seven phases, each with a specific set of activities and deliverables. The phases are:
- Idea: This is the initial phase where ideas are generated and evaluated. The goal is to identify potential opportunities and assess their feasibility.
- Scoping: In this phase, the idea is refined and a preliminary business case is developed. The goal is to determine whether the idea is worth pursuing.
- Feasibility: This phase involves a more detailed analysis of the idea, including market research, technical feasibility, and financial viability.
- Development: If the idea passes the feasibility phase, it moves into development, where the product is designed, tested, and refined.
- Validation: In this phase, the product is tested with a small group of customers to validate its appeal and gather feedback.
- Launch: The final phase is the launch, where the product is introduced to the market.
At the end of each phase, a “go/no-go” review is conducted to determine whether the project should proceed to the next phase. This review involves a thorough evaluation of the project’s progress, risks, and potential returns. If the project is deemed not viable, it is terminated, and resources are allocated to more promising projects.
How the Stage-Gate Model Cuts Product-Launch Failures
The stage-gate model cuts product-launch failures in several ways:
- Prevents Over-Investment in Weak Ideas: By evaluating ideas at each phase, the stage-gate model prevents teams from over-investing in weak ideas. If an idea is not viable, it is terminated early, saving resources and reducing the risk of launch failure.
- Forces Early Market Checks: The stage-gate model ensures that market checks are conducted early in the development process. This helps to validate the product’s appeal and identify potential issues before launch.
- Risk Analysis: The stage-gate model involves a thorough risk analysis at each phase, which helps to identify potential risks and develop mitigation strategies.
- Resource Alignment: The stage-gate model ensures that resources are allocated efficiently. By evaluating projects at each phase, resources can be reallocated to more promising projects.
- Ensures Only Validated Concepts Reach the Market: The stage-gate model ensures that only validated concepts reach the market. By conducting thorough market checks and risk analysis, the model helps to ensure that products are launched with a high degree of confidence.
Benefits of the Stage-Gate Model
The stage-gate model offers several benefits, including:
- Reduced Risk: By evaluating projects at each phase, the stage-gate model reduces the risk of launch failure.
- Faster Time-to-Market: The stage-gate model helps to speed up the development process by ensuring that only viable projects are pursued.
- Improved Resource Allocation: The stage-gate model ensures that resources are allocated efficiently, reducing waste and improving productivity.
- Increased Success Rates: By ensuring that only validated concepts reach the market, the stage-gate model increases the chances of a successful product launch.
Conclusion
The stage-gate model is a structured approach to product development that helps organizations cut product-launch failures. By dividing the development process into distinct phases, each with a clear set of objectives and a “go/no-go” review, the model ensures that only the most promising ideas are pursued. The stage-gate model prevents over-investment in weak ideas, forces early market checks, and ensures that resources are allocated efficiently. By using the stage-gate model, organizations can reduce the risk of launch failure, speed up the development process, and increase the chances of a successful product launch.
News Source: https://www.growthjockey.com/blogs/stage-gate-model
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