"Environmental Changes" A Response To New Product Development

“ENVIRONMENTAL CHANGES”
A Response to New Product Development
Special Topics on Financial Management (FM8)

Hon. Floresito D. Calub, DBA
Frenzy M. Picasales
4FMA
A.Y. 2021-2022
In every part of our lives, change is constant and unavoidable. Although it may not be
always welcomed or embraced with open arms by people, it is always expected especially in the
business environment. Some changes are little and easy to adjust to, while others are significant
and more difficult to deal with. As a result of the rapid rise of globalization, a growing number
of competitors are entering the market, customer demands and expectations are increasing, and
technological advancements are emerging. To keep up with the changing environment, new
product development has long been considered as one of the most essential functions of
corporate businesses. Organizations have integrated new product development as their strategic
corporate response in which they offer products and services that are well-suited to target
customer needs in order to always be ahead of the competition and establish a competitive
advantage.
One of the environment changes is the changing buying habits of the consumers. Because
of the COVID-19 crisis, which is one of the factors that contribute to this change, consumers
across the world have changed their behavior rapidly in which they tried a new store, brand, and
even other way of shopping—from offline to online. (Charm et al., 2020). In terms of
restaurants, some consumers want fastest dining experience that’s why businesses developed and
introduced a service to the market called drive thru. Moreover, shoppers expect the convenience
of shopping under the single roof, that’s why various mall and departmental stores are being built
to offer a wide variety of products under one roof. Understanding consumer's buying habits is
critical for a firm to achieve success for its new product development. Every consumer has a
unique thought process and attitude toward purchasing a specific goods. There is a considerable
risk of product failure if a corporation fails to comprehend a consumer's reaction to a product.
When it comes to technological change, new manufacturing methods are invented as a result of
continual technical advancement and development. Older technology and production methods
are being phased out in favor of newer ones. A company invests a lot of money on technical
research. New items are being produced to keep up with technological developments.
According to Khalfan (2018), customer expectations are continuously changing, and
they believe that artificial intelligence (AI) is critical in providing outstanding, tailored
experiences and offering genuine value to their customers across their digital properties. One
example is the development of chatbots. Chatbots are artificial intelligence-powered
technologies that use the internet to converse with human users. They have quickly taken over
customer service activities for an increasing number of firms due to their ability to respond to
customer inquiries and meet the modern consumer need for instant support. Moreover, by
continuing to innovate their business by incorporating new technologies and creating new
products, they will likely stand out from the crowd of competitors. Increased competition is one
of the primary motivators for developing new products. Every company strives to satisfy and
keep customers by providing outstanding products. Product innovation appears to be needed in
order to provide a competitive advantage and to satisfy consumer wants more effectively and
efficiently.
Overall, these environmental changes serve as the business organization’s motivator to
produce new products and provide new services. Consumers will stick with a new product or
service if it provides outstanding value. This new and enhanced value is what keeps your
business growing. If there is no additional new value to provide consumers, the company will
cease to exist. If the value supplied does not continue to rise, the company's market strength will
decrease as its competitors' market value rises. It is therefore recommended that the businesses
should take part in new product development. It allows the owners and managers to regain some
control over the environmental changes. Whatever type of change occurs, they'll need to learn
how to anticipate the possible effects of it to their firm and make necessary actions that will
support to the growth and success of the firm, not only in the present times, but also in the future.
Innovative companies prosper by knowing what their customers want, making clever product
changes, and producing new products or services that meet and surpass their customers'
expectations.
References Cited:
Charm et al. (2020). Understanding and Shaping Consumer Behavior in the Next Normal.
Retrieved from https://www.mckinsey.com/business-functions/marketing-and-sales/our-
insights/understanding-and-shaping-consumer-behavior-in-the-next-normal on September
29, 2021.
Khalfan, R. (2018). 5 Technologies to Improve the Customer Experience. Retrieved from
https://www.itagroup.com/insights/technologies-improve-customer-experience on
September 29, 2021.

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“ENVIRONMENTAL CHANGES”

A Response to New Product Development

Special Topics on Financial Management (FM8)

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