Business analysis (NPD Stage 3)
Category: Marketing
During the business analysis stage the product idea is evaluated to determine its potential contribution to the firm’s sales, costs, and profits. In the course of a business analysis, evaluators ask a variety of questions. Does the product fit in with the organisation’s existing product mix? Is demand strong enough to justify entering the market and will the demand endure? What types of environmental and competitive changes can be expected, and how will these changes affect the product’s future sales, costs, and profits? Are the organisation’s research, development, engineering, and production capabilities adequate? If new facilities must be constructed, how quickly can they be built and how much will they cost? Is the necessary financing for development and commercialisation on hand or obtainable at terms consistent with a favourable return on investment?
In the business analysis stage, firms seek market information. The results of consumer polls, along with secondary data, supply the specifics needed for estimating potential sales, costs, and profits.