Stage-gate model

Definition

The stage-gate model is a structured approach to the new product development process that divides it into distinct stages separated by 'gates.' Each stage involves specific tasks and deliverables, while each gate serves as a decision point to evaluate progress, ensuring that only the most promising projects move forward. This method enhances project management efficiency by allowing teams to assess feasibility, risk, and market potential at various points in the development cycle.

5 Must Know Facts For Your Next Test

1. The stage-gate model was introduced by Dr. Robert G. Cooper in the 1980s as a way to improve the success rates of new product development initiatives.
2. Each stage typically includes activities such as market research, product design, testing, and development of business cases.
3. Gates serve as checkpoints where project teams present their findings to decision-makers who determine if the project should continue, be revised, or be canceled.
4. The model helps organizations allocate resources more effectively by focusing on projects with the highest potential returns.
5. By providing a clear framework, the stage-gate model reduces uncertainty in the development process and fosters cross-functional collaboration among teams.

Review Questions

• How does the stage-gate model improve decision-making during the new product development process?
  • The stage-gate model improves decision-making by providing structured checkpoints where teams can evaluate project progress based on specific criteria. Each gate assesses the project's feasibility, market potential, and alignment with strategic goals. This systematic evaluation ensures that resources are allocated effectively and that only projects with a strong likelihood of success proceed to the next stage.
• Discuss the roles of stages and gates in managing risks associated with new product development.
  • In the stage-gate model, stages represent critical phases of development where specific tasks are completed and deliverables are produced. Gates function as risk management tools by requiring teams to present their findings before proceeding. This allows stakeholders to identify potential risks early on, assess whether they can be mitigated, and decide whether to invest further resources into the project or pivot its direction.
• Evaluate the impact of the stage-gate model on resource allocation within an organization engaged in new product development.
  • The stage-gate model significantly impacts resource allocation by prioritizing projects based on their potential value and strategic fit. By conducting evaluations at each gate, organizations can redirect resources toward initiatives that demonstrate strong market demand or innovative capabilities while minimizing waste on less promising ideas. This strategic approach not only maximizes returns on investment but also encourages innovation by fostering a culture of accountability and informed decision-making throughout the product development lifecycle.

Related terms

New Product Development (NPD): The complete process of bringing a new product to market, from initial idea generation through design, development, testing, and launch.

Project Management: The discipline of planning, executing, and finalizing projects, ensuring they meet specific goals, deadlines, and budgets.

Risk Assessment: The systematic process of evaluating potential risks that could impact a project or product, crucial for making informed decisions during the stage-gate model.