Stage II: Developing and demonstrating the product

In this stage, the product is developed, demonstrated, and tested. Testing and assessing the performance of the novel product should cover all aspects of performance such as technical limitations, reliability, convenience, ease of operation and maintenance, safety, environmental and potential societal concerns, as well as total costs of manufacturing the product and bringing it to the customers. Typically, the final product at the end of stage II will differ from the concept product as envisaged in stage I and accordingly the business plan will have to be adjusted. The big question at the end of stage II is whether the product will be able to meet the needs and expectations of the target customers.

Stage III: Developing, or acquiring access to, the supply chain

In this stage, the path to the market has to be prepared in detail and executed. The core activity is to build up the capacities that are required for launching the new product into the market, and this will include aspects such as manufacturing the product, distribution and logistics, sales, and after sales services This does not mean that all these capabilities have to be in-house; it is usually better to follow a low- capital approach and create access to these capabilities via outsourcing or partnering. For example, the product can be made via toll manufacturing or distribution can be outsourced. The final, detailed business plan has to be created and agreed before the launch. The complexity of this stage is often underestimated by the innovator at the planning stage and the potential problems tend to be recognized too late. However, developing an effective and efficient supply chain to the market is critical for success.