Product and service innovation

Turning whiteboard brainstorms into tangible value

Finding better ways to break through

Developing a powerful innovation capability is no easy task. In fact, our recent studies show that there is no long-term correlation between the amount of money a company spends on its innovation efforts and its overall financial performance. Instead, what matters most is a company’s openness to new ideas, its ability to manage product innovation from conception to market introduction, and its discipline in linking new-product development tightly to specific sales, marketing and financial goals.

We help companies set strategies for building more effective organisations and capabilities rooted in portfolio management, product innovation, digital design, life cycle management, emerging technologies, customer insights, and more. Our proven expertise in these areas, across industries, allows us to identify innovation strategies and processes that are focused on delivering customer value, ensuring profitable products, and driving growth. Our strategies drive actionable change from the very start of our engagement, and deliver results that redefine your business for years to come.

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How we help clients

Innovation strategy

By capturing customers and markets insights, and then understanding, targeting, and delivering the right “value mix,” we set strategies that improve profitability and fuel growth. Advantaged product concepts drive superior competitive positioning, and that, in turn, drives higher sales.

 

Global innovation networks

Large manufacturing companies have long headed offshore to reap the benefits of lower labour costs and closer contact with local markets. Now, companies of all kinds are applying that same principle to their innovation efforts. We help companies develop a global innovation programme that can reduce costs while taking advantage of the talent and resources available in local markets throughout the world to improve efficiency and effectiveness.

Product development excellence

Our approach to product development begins by diagnosing the client’s current innovation processes and results, and then helping them build distinctive capabilities to drive future performance. Those capabilities include open innovation networks that can integrate global customers, partners, and suppliers to generate more high-value ideas, and product development and lifecycle management processes that enable companies to bring the right new products to market faster.

Portfolio management

We start by diagnosing the health of our client’s current innovation portfolio, and then systematically apply tools and best-practice templates to improve performance. Our methods have dramatically improved the quantity and quality of clients’ ideas and product concepts, and boosted clients’ efficiency by tailoring and implementing innovation portfolio processes to their particular situations. Our efforts have yielded real benefits in several metrics, from portfolio valuation and time-to-market to percentage of revenue from new products and overall return on innovation investment.

Product value management

To help increase product value and reduce product costs, we advise clients on both technical and commercial levers as well as setting up product value management (PVM) organisations. Our services include competitor teardown and benchmarking, value-based requirements engineering, design-to-value, value engineering, cost modelling with supplier negotiation support, PVM organisational design, PVM training, digital PVM, software cost reduction, and value-based technology strategy development.

Impact

Developing portfolio management for a large lighting player

After a series of acquisitions, a global provider of lighting solutions and applications needed to address issues related to organisational complexity and right-size its product portfolio. Strategy& analysed each product line within the portfolio with the goal of minimising redundancy and overlap while maintaining functional coverage of market needs. As a result, we developed a brand consolidation strategy and deployment plan that identified an actionable plan to retire ~49% of product families and rebrand another 18%. We also developed an implementation “playbook” to guide the execution phase. This enabled significant savings from consolidated functions.

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Improving product development for a semiconductor equipment provider

When a major semiconductor equipment provider experienced 10-year flat revenue and a 40% success rate of new products launched, the leadership engaged Strategy& to identify the root causes and potential solutions. Strategy& conducted ~80 interviews across business and functional units, within the corporate centre, and at various organisational levels to evaluate causes and compared our client’s product development practices against 28 companies with similar characteristics. As a result, we developed recommendations across governance and product development cycle, yielding close to $500 million in annual benefits.

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Redefining R&D deployment for an industrial products manufacturer

A global diversified industrial products manufacturer lacked transparency into its R&D spend and objectives across business units. To help align the R&D with corporate-wide priorities, Strategy& launched a corporate-wide governance model for early-stage technology investment and established a technology management team to straddle the BU domain. This resulted in 20% of our client’s R&D budget being redeployed to better align with strategic priorities.

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Shifting priority R&D markets for a large technology player

After making acquisitions across multiple industries, a large technology company lacked the systematic capabilities to evaluate and prioritise R&D across competing opportunities. Attempts to establish an enterprise-wide portfolio management capability had failed and our client sought a consolidated R&D function across the business. We interviewed and aligned key stakeholders on portfolio management objectives and designed key elements of a systematic capability. This facilitated executive reviews to transparently allocate $1.1 billion of the R&D budget across core businesses and focus 60% toward priority markets.

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Developing high-performing products in communication tech

When a leading developer of communications and data management solutions faced a shrinking overall market in key sectors, and many of its products were not performing well, the company’s leadership team engaged Strategy&. Together, we undertook a major CEO-lead initiative to improve the company’s product and portfolio management capability across four major business units. We also designed a portfolio management process, dashboard and KPIs to enable better R&D investment decisions and improve transparency and accountability. Where adoption was strongest, organic revenue rose by 33% and EBIT percentage increased by 50% in the 18 months after our model implementation.

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Contact us

Alessandro Borgogna

Senior Executive Advisor, Strategy& Middle East

Barry Jaruzelski

Principal, Strategy& US

Steven Veldhoen

Strategy Consulting Co-leader, PwC Japan

Brad Goehle

Managing Director, Strategy& US

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