It is vital for a business to have a broad future vision, a vision to be a successful leader in whichever field it operates. To be a successful leader, company needs to develop new products and services from time to time. Product and service development has been important in the past and it's getting increasingly important in today's highly competitive business world as markets are becoming fragmented, competition is getting stronger and product life cycles are getting shorter than ever (Slack:2002, Pg:392). Product and service development has become essential not only for commercial success but also for commercial survival. In other words, if a company does not update its products or services from time to time then its rivals can outpace it and takeover the market control.
Competition provides a powerful incentive to develop products and services. Successful product and service development keeps a firm one-step ahead of competition as well as help to earn higher profits.
For e.g. (Article: A) 'Nokia' is trying to put its feet into a new market by developing a mobile-gaming device called "N-Gage" which can be used as a mobile phone as well as wireless (Bluetooth enabled) gaming device. If successful, Nokia will be first mobile phone makers to offer wireless-mobile gaming device. Thus, by innovating such products 'Nokia is trying to gain advantage over competitors' (Slack:2002, Pg:392), especially in gaming market. Companies are competing not only by developing totally new products or services but also by enhancing their existing products & services as smallest change in product or service can have an impact on competitiveness (Slack:2002, Pg:425). For instance (Article: B) Microsoft entered into gaming market couple of years ago by innovating XBOX game console. Microsoft didn't enjoy the success of this product up to full extent because Sony PS2 was...