Final answer:
The product development strategy ensures alignment with firm objectives and marketplace opportunities, driving decisions on production, pricing, and labor while considering market structure and competition.
Step-by-step explanation:
The product development strategy, a strategy for new products, ensures that the new product team develops products that are in line with firm objectives and strategies and that address marketplace opportunities. This involves envisioning the future by designing and drawing a new product, explaining what need or purpose the new design is fulfilling, and using feedback to redesign your product.
Key questions that influence this strategy include:
- What product or products should the firm produce?
- How should the firm produce the products?
- How much output should the firm produce?
- What price should the firm charge for its products?
- How much labor should the firm employ?
The answers to these questions depend not only on production and cost conditions each firm faces but also on the market structure for the products. Market competition is a significant incentive for discovering new technology, allowing a firm to produce more cost-effectively or to create innovative products that fulfill consumer desires. As firms engage in this process, they are guided by a clear strategy that aligns with their overall objectives and marketplace needs.