Identifying and categorizing risks of new product development in a small technology-driven company

Abstract

New product development (NPD), as a locus of the innovative potential of organizations, plays an essential role in small technology-driven company survival. To address the research gap and fulfill the companies’ needs, this survey aims to post and verify a new, simple and not time-consuming methodology for risk identification and categorization of industrial products development. To check the hypothesis that NPD project technical, cost and schedule sets of risks could be categorized as both threats and opportunities, an experiment was conducted in a small Serbian enterprise that has developed 52 innovative solid state based lighting products for outdoor lighting infrastructure. There were 69 identified risks (51 threats and 18 opportunities) that through 76 factors influence new products’ technical characteristics, schedule and cost. Explorative factor analysis was applied to reduce and compress the data and 26 composite factors were obtained as valid predictors of the NPD project results. Regarding the technical characteristics risks, the threats can be grouped into four factors consisting of six risk types, while opportunities can be grouped into two factors consisting of four risk categories. The risks influencing the schedule disturbance that act as threats are grouped into eight factors consisting of ten risk types, while those that could be used in opportunities are grouped in four factors with eight risks identified. The risks influencing the costs that threaten the project are recognized as five factors described by seven risks, while those that act as opportunities are grouped into three factors described by five variables in total.