Based On The Combination Of New Product Development Risks, Mechanism Of Action Study

Entrepreneurs strive to get extra profit from new product development (NPD) only because the uncertainty of innovation gives them many opportunities. But at the same time, they have to suffer from the risk that leads to the NPD failure. This paper tends to explore the insidious relationship between portfolio and NPD risk on the project level. NPD risks refered to this thesis excludes many other risks and concentrates on the R&D risk, production risk and market risk.The thesis starts with the analysis of risks in NPD and classifies R&D risk, manufacture risk and market risk concretely. Then the thesis discusses the theory of portfolio decreasing risk. The three aspects includes product design and manufacture, organization and market. In terms of empirical research, quantitative research and qualitative research are conducted independently in the same period to prove initial assumptions.The conclusions are as follows: Firstly, R&D risk, production risk and market risk are the most considerable risks during NPD. The three risks are difficult to be distinguished since technique and market change faster and faster. Secondly, effective product portfolio innovation can decrease the NPD risk. Product portfolio can share the innovation resource of organization, accelerate product development, and satisfy different sub-markets, which disperse the risk finally. Thirdly, the reduction of NPD risk helps to improve new product performance.The paper gives some practically useful suggestions for the enterprises: Firstly, the enterprise should make the best project choice and go/kill decision. Secondly, the enterprise should define market orientation of new product and choose right technique according to R&D capacity of the organization.Thirdly, the enterprise should accelerate new product development by portfolio innovation based on platform. Fourthly, the enterprise should strengthen the negotiation between NPD personnel.