The Analysis of Factors Contributing to the Success or Failure of New Product Development

Abstract

Developing new products and staying ahead of the competition is critical for the survival of companies in a competitive environment. There are many factors affecting a product's chance of success in these environments, such as the company business model, the product type, the company's organisational structure and so on. The objective of this study was to define the relative importance (weights) of 19 factors that FMM companies can use to measure the success or failure of the new product development (NPD) they launch. We used group decision-making with the analytical hierarchy process (AHP) and considered three methods of handling the responses of outliers (DMs whose opinions differed from the majority). The results showed that customer satisfaction, proportion of total sales by new products, influence on the overall profit of the company, and growth of demand for the company products were the most important factors for measuring the success of innovation. However, it can happen that weight assignment methods produce very different rankings of factors and this situation can be challenging for the decision analyst.