Question 2: New product development (30 marks, 300 words)

Without any new development, products and services can become obsolete, increasing the likelihood that customers may switch to competitors products. New product development can be categorized in three categories:

1.Incremental enhancement of existing products

- Existing products can be given some form of minor modification to enhance some aspect of their performance. This could be a redesign to reduce its weight, reduce its unit cost or improve its reliability.

- The actual product concept the way in which the product meets customer needs does not change. Incremental enhancement can use disruptive innovation.

2.New generation products Sometimes a company will develop a completely new product or completely redesign an existing product based on new technologies.

- For example, audio technology for music recordings has gone through a series of changes from vinyl analogue records, through tapes and compact discs to the idea of a downloaded file.

- The basic need for a customer to have a store of music they can listen to has not changed. The technology applied to meet that need however has changed significantly

3.Breakthrough products Some products are so unique that they create their own new market and product category.

- Examples would include the first mobile phone or the first iPad.

. Discuss these three categories in relation to Tesla.