Developmental Logistic of a New Product Development - Term Paper Example

Market and Sustainability Vis-À-Vis Developmental Logistic Of New Product Development 1. Introduction The need for sustainable development has become one of the most crucial factors of our life. The rapid advancement of technology has brought about a massive change in our lifestyle which has not always been in our best interest. Some of the ways and means, which have contributed towards our better living conditions, have also brought certain challenges in its wake that needs our urgent attention. The fast advancing technology and rapid globalization has adversely affected the ecological conditions. Through the evolving process of entrepreneurial creativeness, people must make efforts to adopt ‘green’ habits and promote goods and services that are intrinsically linked with environment conservation and preservation. Hence, business imperatives and organizational environment strategy must contribute towards sustainable development and become proactive participant in the conservation and preservation of environment. 2. Need for sustainable development The fast advancing technology and rapid globalization, including local migration, has adversely affected the ecological conditions. The conservation and preservation of natural resources are important part of population dynamics as its sustenance depends on the available resources. The population growth has brought into focus the issue of sustainable development. Sustainable development is defined as maintenance of ecosystem that facilitates a continuous supply of natural resources like water, clean air, energy and food with proper waste disposal system. It is important that awareness regarding sustainable development is created amongst the public so that despite advancement in technology, environment is preserved for our future generation. Indeed, fast depletion of natural resources has disturbed the eco system, resulting in change in global environmental conditions like global warming, increasing number of climate related natural disasters etc. The seriousness of the environment issue needs to be understood for the wider ramifications by individuals, government and business world. The environmental sustainability has become critical element of survival and therefore, businesses must strive for market sustainability approach to encompass strategies and innovative measures within their work paradigm. 3. Government initiatives in sustainable development The primary role of governments is to provide a coherent guideline of governance through well defined constitution and policy framework. The policy frameworks are important part of administration processes that are designed to improve and improvise the diverse welfare programmes of the public at large. The various areas of the public welfare domain like health, education, environment, energy etc. require comprehensive understanding of the wide ranging implications of the government policies. Paul Sabatier (1988), noted social scientist, has conceptualized ‘Advocacy Coalition Framework’ or ACF and ‘Multiple Streams Framework’ for the policies in different areas of public welfare, that have proved quite effective. It takes into account the interests of various stakeholders by incorporating opinions and feedback from wide ranging external and internal resources that may significantly impact the masses in the specified areas. The various countries have realized the necessity of environmental preservations and have enacted laws and guidelines for conservation and preservation of environment through stringent measures. UK is the first country that has come up with Climate Change Act 2008 which has‘a legally binding long-term framework to cut carbon emissions. It also creates a framework for building the UK's ability to adapt to climate change’(defra, 2008). The various local and international agencies have also evolved measures and programmes to not only create wider awareness towards climate changes and need for adapting measures that would help mitigate the effect the effect climate changes. UNIDO has also raised the pertinent issue of corporate social responsibility of the corporate world and defines it in terms of ‘the responsiveness of businesses to stakeholders’ legal, ethical, social and environmental expectations, is one outcome of these developments’ (UNIDO, 2002). 4. Market and sustainability The core business strategy of any business heavily relies on the market strategy that facilitates its products and services to meet the needs and requirements of the people at large. But the fast changing socio-economic dynamics have created a fiercely competitive business environment, necessitating changes in the role and techniques of traditional marketing to encompass broader parameters of business performance vis-à-vis environmental compulsions to gain advantage. Thus, an effective marketing strategy that incorporates sustainability becomes intrinsic to the management strategy that significantly impacts the overall business performance outcome. 5. Strategic role of marketing Levitt argued that the marketing takes into account the preferences of the customers and thereby builds a solid customer loyalty that result in sustainable customer base that has potential for growth because it continues to satisfy the changing requirements of their needs (Levitt, 1960). While the traditional role of marketing was confined to selling the products which meet the demands of the people, the fast changing paradigms of business have necessitated drastic shift in the approach to traditional marketing strategy. Wilson and Gilligan have argued that market has become more complex and highly competitive in the contemporary environment of fast advancing technology and rapid globalization. They further assert that ‘marketing is increasingly being conceptualized as an organizational philosophy or ‘an approach to doing business’ (Wilson and Gilligan, 2003, p4). The various factors like changing pattern of society, environment compulsions and the influence of technology need to be addressed in the wider application of social imperatives and included in all spheres of public and private business strategy. Kashani (2005) has asserted that the traditional role of marketing was confined to selling its products to the people but the changing socio-economic dynamics ‘have challenged our traditional way of thinking about marketing’. The various inter-related factors which impact the markets have become highly relevant and make the contemporary business more competitive. Drucker (1973) says ‘marketing is first a central dimension of the entire business. It is the whole business seen from the point of view of its final result, that is, from the customers’ point of view’. Indeed, the emerging business trends have shown that marketing is increasingly moving away from the functional process to encompass wide range of business imperatives that considerably impact business decisions. Shultz has emphasized that it is the end-users who now control the markets rather than the marketers (Shultz, 2001). Therefore, the strategic role of marketing must acknowledge and understand the wider implications of the emerging multicultural society and improvise techniques and skills to encompass traits and behavioral pattern that facilitates better perception and understanding of people. Kotler et al (2007, p7) define market as ‘a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others’. The strategic role of marketing therefore, demands a focused approach to offer a wide spectrum of informed choices to the various segments of the market, thus creating needs which are later fulfilled by the promised product and service. 6. Factors that significantly impact marketing sustainability The changing dynamics of the global business necessitate formation and incorporation of management strategies that go beyond the realm of individual company’s concern. Drummond and Ensor (2004) agree that marketing facilitates business success through understanding and meeting customers’ demands. But ‘achievement involves many complex, interdependent or even conflicting tasks’ that make it more challenging. Pujari (2006) observes that planning for distinctive competencies along with considerations for wider ramifications of the socio environmental paradigms provide the company with competitive advantage. He further asserts that environmental sustainability issues include ‘resource efficiency, dematerialization, reduction of waste and emissions’ that help promote environment preservation. The strategy and measures within business operations that could significantly impact sustainable development and performance with environment are enumerated as below: 6.1 Cross functional coordination In the contemporary environment of competitive business, sustainable market strategies facilitate proactive approach to meet the challenges of environmental imperatives. The business operations at all levels of interaction needs to be carried out within the parameters of sustainable development framework. Hence, organizations need to define business policies vis-à-vis sustainable development and ensure that functional coordination amongst various inter-related units cut across the boundary of department, organizational structure and operation efficiency. The multi-disciplinary units like new product development or NPD, design, environment, market etc must come together to test new approaches to meet the challenges. Various scholars affirm that interface between R&D, marketing and coordination of various internal linkages help NPD to succeed (Song and Parry, 1997; Craig and Hart, 1992). Hence, integration of environmental issues becomes vital part of sustainable marketing strategy. 6.2 Redefine NPD in relation to its environmental responsiveness The various factors like product life cycle, environment friendly design with biodegradable aspects and recycling, waste management etc. are important ingredient of development processes of NPD in the current times. World Commission on environment has expressed sustainable development as the ‘ability of current generations to meet their needs without compromising the ability of future generations to meet theirs’ (WCED, 1987). While the WCED’s definition leaves a huge gap for interpretation, the fundamental objectives have been made clear in concise terms that natural resources must be made available to the future generation. The innovation driven strategy for product development that can address the environment issues are increasingly become core issues within the business strategy of the corporate world (Pujari et al., 2003; Pujari and Wright, 1999; Prothero and McDonagh, 1992). General Motor’s ‘electric car’ and Whirlpool’s CFC free refrigerators have been landmark products that have been developed to address the environmental issues (Ottoman, 1998). Indeed, incorporating the socio-environmental paradigms within the framework of its strategic goals and visions, these companies have been able to contribute towards environmental conservations and social issues which have considerable impact on the sustainable development. It has become vital for businesses to efficiently use technology by making efforts to manufacture ergonomically designed products and constructively contribute towards sustainable development (Fuller, 2004). According to Slater and Narver, markets thrive on the processes of the learning organization which ‘continuously acquire, process, and disseminate throughout the organisation knowledge about markets, products, technologies, and business processes’ (Slater and Narver, 1995). Thus new dynamic leadership encourages creativity and innovative practices that give a unique impetus to the development of new products. 6.3 Conservation of natural resources The developmental logistics that promote indiscriminate use of natural resources in myriad format like manufacturing and production of goods and services, transportation, daily consumption of energy in the form of electricity, gas etc. are factors that need to be addressed to preserve and conserve environment and balance ecosystem. Benchmarking and TQM are two of the most successful ways of evaluating better business practices and improving existing performance levels. While benchmarking looks for continuous improvements through innovative measures, the major objective of TQM is to promote quality assurance at various levels of business processes through measures that drastically reduce the percentage of error within the production and maintain a minimum standard. The organizations continuously make effort to identify factors and issues that would help meet the challenges with efficiency and unmatched proficiency. Mikel (1998) asserts that ‘six sigma’ approach to production has become intrinsic part of business strategy. Six Sigma is the methodology of business processes that eliminates defects thus promoting the quality production at low cost that incorporates environmental issues also. 6.4 Collaboration and partnership for market sustainability In the contemporary era of competitive environment, the various environment compulsions become the motivating factors that promote tactical business coalitions across the globe. The myriad economic units across the globe are inter-connected through the market mechanisms. Barnett (2004) elaborates the concept as ‘the enormous changes being brought on by the information revolution, including the emerging financial, technological, and logistical architecture of the global economy (i.e., the movement of money, services accompanied by content, and people and materials)’. These aspects become essential facilitator for change, especially with reference to environmental paradigms which have become huge concern across the globe. Thus, collaboration, partnership, licensing agreements and any other types of contract business relationship are the linkages that facilitate higher level of efficiency and organizational growth which could offset a competitive advantage over their rivals. Research is another vital academic tool that facilitates knowledge based socio-environment and business decisions that are essential part of the development of the business processes. Indeed, the researchers have shown that for innovation is intrinsically interconnected with novel ideas and the networking of organizations exposes industries to the huge stack of new ideas and creates platform for transfer of knowledge (Powell and Grodal, 2005). Indeed, according to Hausler et al. (1994), even the largest and most diversified corporations need to collaborate in R&D in order to gain access to complementary knowledge. 6.5 Retail market and effective supply chain The compulsions of the fast changing trends in the socio-economic paradigms have forced the domestic and global business to re-evaluate their market strategies and develop creativity in their approach to not only maintain their current customers but also try to attract new clientele. In the highly competitive environment of global business, expansion of market through retailing and creation of effective supply chain has become a critical factor of success in the recessive economy of current times. The retail market is the most promising tool of implementing environmental issues within business relationship that should encourage ‘green’ business processes. Retailing can be broadly defined as expansion of business interests through business alliances with third party under predefined terms and conditions. The retail market, therefore, becomes a huge asset for the core business enterprise. In the current financial constraints, the retail marketing has considerable impact on the customer relationship and performance outcome of the business enterprises. The emerging market has huge scope and in the cutting edge business, one needs to widen its market through strategic business partnerships with global business entities that can facilitate market its products and services. Creating effective supply chain management, the business entities can promote goods and services that meet the criteria of sustainable development. Indeed, the effective supply chain helps coordinate the organization’s various linkages with the external agencies and promotes efficient receipt and delivery of goods and services. Hence, it has great potential to give a competitive edge in the global arena vis-à-vis environment conservation. It encourages participation in the environmental preservation by forging alliances and professional partnership with companies that work towards environment conservation. 7. Requirements for market sustainability Slack and Lewis (2002) have expounded on the issues and factors that contribute to the superior business performance broadly focusing on the overall environmental impact on the development of products and services. It encompasses the following processes and operatives: 7.1 Material consumption Environmental threats pose serious concern to the survival of human race. The various factors contributing towards environment degradation and climate change have become major challenges that need to be addressed urgently. Hence, sustainable consumption that takes into account the various contributing factors of environment like efficient use of technology and resources become vital links for sustainable development. 7.2 Re-usability and Recyclabilty Re-usability and re-cyclability of products and services greatly enhances the scope of sustainable development. Recycling of the waste materials comprising of paper, metal, cloth, wood etc. must be included within business strategy for market sustainability. 7.3 Emission Well defined guidelines and laws for sustainable use of water, emission of greenhouse gases and other measures to mitigate must be promoted and adapted within the governments’ policies to the climate change. Greenhouse gases help to regulate earth’s temperature but indiscriminate increase in the greenhouse gases like carbon di-oxide and methane etc have damaging impact, changing the earth’s temperature disproportionately resulting in extreme weather conditions. Kyoto Protocol is one of the most important frameworks Convention on Climate Change that had become legal entity on 16 February, 2005 (IPCC, 2007). Its basic objective is to restrict greenhouse emissions by the developing and developed countries by setting targets for them and must be adopted by the countries across the globe. 7.4 Power consumption The finite source of energy is a major concern. Innovative measures and coordination amongst various inter-related units of business need to be developed to reduce power and energy consumption which may be in the form of electricity, fuel, gas etc. Development of cleaner technology has become need of the hour and their use in business processes would encourage sustainable efforts amongst all stakeholders. 7.5 Water consumption Water is one of the most important natural resource that is widely used and misused by the individuals and industries. Dybern (1974) argues that lack of proper water management and inappropriate infrastructure for efficient disposal of waste and human excretion are the major culprits for environment degradation. The author has cited five major reasons for increasing water pollution: unprecedented population growth and rapid urbanization; increased use of natural resources in the development processes; indiscriminate use of natural resources like water and land, destroying forest areas and disturbing eco-system; lack of knowledge of the decision makers in the developing and developed nations vis-à-vis relationship between development and environment conservation; and lack of financial resources for abatement of pollution in the developing nations. 7.6 Proximity to market This factor is also important ingredient of market sustainability primarily because it significantly impacts the transportation logistics which could adversely impact energy consumption and increase the load on the environment conservation processes. 7.7 Waste management and recycling of products The organizations’ initiatives in recycling the waste are major steps towards environmental conservation. Environmental preservation has become a global concern and therefore, the businesses should address the inherent compulsions of the masses that promote the blatant disregard for environment. 8. Conclusion In the contemporary times, the advancing technology and rapid globalization have made businesses very competitive. The changing imperatives of market strategy have increasingly become complex and are encompassing factors that significantly impact business outcome. The concept of marketing has undergone dramatic transformation and the various marketing tools that promote sustainable development have become intrinsic to the wider welfare of the society. Indeed, environment protection agencies and other groups, throughout the world are trying to promote public participation and intensive awareness campaign that addresses environmental problems. 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Wilson, R. and Gilligan, C. (2003). Strategic Marketing Management: Planning, Implementation and Control. Butterworth Heinemann. Oxford (e-book). Read More