Introduction to Entrepreneurship Launching New Ventures Allen 5th Edition Chapter 7 Analyzing Product Service Risks and Benefits Every business involved in product service development at every stage of its life cycle INTELLECTUAL PROPERTY important assets created by new products and services that can be protected in many ways Product and intellectual property development closely linked Nature of Product Process Development Past main competitive measures were price and performance Today firms must offer superior performance AND value based pricing and address niche market to even begin to be competitive TECHNOLOGY is essential to product service development Companies operating in tech based industries must keep up with 1 Changing consumer demand 2 Technological innovations advancements of competitors COMPETITIVE ADVANTAGE can be built around market differentiated products but MUST be enhanced by propriety processes Product must provide value to the customer but also be difficult for someone else to produce the same quality at the same cost Technology has shorted product lifestyles Companies must always be researching and developing new products while improving existing ones to stay ahead of competition Consequences of Lack of Product Development Resources 1 Poor execution 2 Time to market increases 3 First to market opportunities are missed 4 Projects made simple so that more can be done with less 5 Team morale declines Companies can avoid these problems by carefully planning product development strategies to focus on the company s core competencies Enhance Chance of Competing Effectively by 1 Designing the product right the first time 2 Shorten the time to market 3 Outsource some product development Product Development Cycle 1 Opportunity recognition 2 Technical feasibility analysis 3 Design and development of platform 4 Prototype building and field testing 5 6 Product market introduction Initial market tests Outsourcing Increasingly common for all sizes of companies to outsource part or all product development to third parties Requirements of fast paced innovation with shorter windows of opportunity in today s market Provides networks of expertise INTELLECTUAL PROPERTY Developing a new product creates an asset that must be protects If the product is a unique device process service or other proprietary item it may qualify for INTELLECTUAL PROPERTY RIGHTS a group of legal rights associated with patents trademarks copyrights and trade secrets PATENTS U S Patent System designed by Thomas Jefferson Primary means of protecting an original invention Gives holder right to defend patent against those who attempt to use sell manufacture the invention during the period of the patent Purpose is to provide a brief monopoly to give inventor opportunity to get invention into the market 80 of all patents come from large companies To be patented the invention must fall into at least one of the established classes 1 Machine or something with moving parts 2 Process method of producing a useful and tangible result 3 Article of manufacture 4 Composition of matter 5 A new use of improvement for one of the above that does not infringe on patents associated with them Other Requirements Types of Patents Patent Process The invention must have utility be useful The invention must be new or novel in some important way The invention must not be obvious to someone with ordinary skills in the field 1 Utility Patents most common protect the functional part of machines or processes 2 Design Patents protect new original ornamental designs for manufactured articles 3 Business Method Patents protects ways of doing business 1 File disclosure document 2 File a provisional patent 3 File a non provisional patent application Foreign Patents Patent rights granted to an individual in U S only extend to the borders of the U S no effect in a foreign country Every country has different laws regarding intellectual property TRADEMARKS Symbol logo word sound color design or other device that is used to identify a business or product in commerce Service marks identify services intangible activities performed Marks that CANNOT be trademarked include 1 Anything immoral or deceptive 2 Anything that uses official symbols of U S any state or municipality ex Flag 3 Anything that uses a person s name or likeness without permission Protect original works of authors composers screenwriters and computer programmers Does not protect the idea itself only the form in which it appears Work must be in a fixed and tangible form to qualify for federal copyright Copyright laws fairly consistent across countries because of copyright treaties COPYRIGHTS TRADE SECRETS Consist of a formula device idea process patter or compilation of information that gives a business owner competitive advantage in the make place Are novel and not common knowledge Kept in a confidential state Some companies choose to keep trade secrets instead of patents because patents expire and are then available for anyone to use