Virtual Team in New Product development

Published by MBA Skool Team, Published on December 11, 2013

Population of India = 1 billion +

States in India = 28

Number of product = 10, 00, 000 +

Number of retailers = Unlimited

So how to succeed in this market? what‘s the success mantra?

The answer to it is the development of a new product. As we studied in strategy, to achieve a first mover advantage and longetivity in business create a space for yourself which is untapped and unexplored. And to add on this a new product that can encompass the local flavour of our cultural diversity, their unique taste is the master key.  Increasing competition and reducing product cycle is putting pressure on companies to come up with an innovative idea. With every passing day we read that companies are spending a major chunk on R & D to get something new in market. This challenge can be solved by introducing virtual teams who can collaborate, work fast and introduce the localization flavour in the global product to make it a success. Along with all these advantages it increases the efficiency and effectiveness of the company. But before we discuss more on it, we should be clear that it should not be confused with the global team. Global team are those whose members live and work in different countries whereas in a virtual team whose members are geographically dispersed, but culturally similar, and who rely on technology-mediated communication (Zakaria et al., 2004)

Image Courtesy: sheelamohan,

In the article we will first cover the NPD cycle, R&D teams in the NPD , advantages and disadvantages of virtual teams in NPD and lastly the way forward. So first we look at the new product development cycle.

Most of us may know that a new product is created through a stage gate system which means that the product needs to fulfil the requirement at every stage and then only can precede to the succeeding stage. The System divides the NPD into discrete stages, typically five or six stages. The process provides an outline to move products through the various stages of development: 1) idea generation, 2) preliminary investigation, 3) business case preparation, 4) product development, 5) product testing, and 6) product introduction

Although these days this kind of stage gate process is used and specially in some industries such as pharmaceuticals , but at times type I and type II error are made . Type I error to let the right product stopped and type II error be to allow the wrong product to precede to the next stages.  As we all understand from the above statement that the type II error would be dangerous as it will have a very high probability to fail in the market. To avoid these kinds of errors a closer integration of management through virtual team in the process might be a solution

R&D team in NPD

If we look at the resource based theory says that “resources are scarce and we are not effectively and efficiently utilising the resources”. And as we know we need resources for developing a new product, so virtual teams lay down the path to leverage those scarce resources which are spread over the geographies.  A virtual team creates a supportive and an encouraging environment which creates a positive synergy to remove a barrier in company’s growth.

The second aspect is that virtual teams provide better communication than the face to face communication. U don’t believe it right? But there are evidences which support the above statement. The first argument is that the human interaction is assisted with the new technology which wipes away the long distance effect.

The second argument to support is that virtual team has three additional features i.e. ability to rehear, parallelism, and ability to reprocess than the traditional team. (Jeffrey, Mitzi, Anne). The above three characteristics allows the person to recall information, exchange and process resulting in a better decision making. (Jeffrey, Mitzi, Anne).

The third aspect is the virtual teams provide lot of flexibility and responsiveness to the organisations as developers enjoy a high degree of freedom in their work due to which virtual teams attract the best people who believe in self-monitoring and are internally motivated towards work. The primary advantage of it is reduced R&D cost, different perspectives from across the geographies and decreased product development life cycle of the new product. Therefore virtual team keeps up with the creativity quotient required for developing new products.

Now we look at some of the pros and cons of using virtual teams in new product development

Some of the positive effects of virtual teams are stated as follows:-

  • Reduction in costs – which include the relocation cost, travel cost and other office costs like electricity, computer equipment etc.
  • Reducing time to market – which is one of the critical success factors, especially in the manufacturing industries.
  • Enhanced productivity – because of reduced distractions
  • Sharing of experiences and knowledge

The negative effects can be outlined as follows:-

  • Miscommunication – due to limited or sometimes absence of face-to-face interaction
  • Greater autonomy – as the control over activities is minimized
  • Higher amount of differences – as different members are located in different places and there is a huge amount of difference in culture and thoughts of people

Now with the changing times we see that the market is more dynamic than before and the consumer need are changing more quickly than ever and technology is becoming obsolete in a very short span of time. For organisations to be responsive to those changing needs, they have to create new products with a shorter lead time. And to achieve this Virtual team is the way ahead as it maintain collaborative environment which helps to reduce the complex process into simple steps.

With increasing competetion and better technology development of new product has become a complex process in recent times. It requires the whole supply chain to participate in this process as it can help the organization to gain new competencies, diversify risks and conserve resources.  Virtual teams can thus enhance the communication and collaboration between geographically distributed locations and help in new product development which is the future of the industry.

This article has been authored by Swati Chopra from Management Development Institute


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  2. Effective virtual  new product development teams: an integrated framework, Vishag Badrinarayanan, Dennis B. Arnett, Journal of Business & Industrial Marketing, 2008.
  3. Virtual R&D teams for NPD in SMEs: Past, Present & Future Trend, Nadar Ale Ebrahim, Shamsudin Ahmed and Zahari Taha, Faculty of Engineering, University of Malaya.
  4. Can You Hear Me Now? Communication in Virtual Product Development Teams, Mitzi M. Montoya, Anne P. Massey, Yu-Ting Caisy Hung, and C. Brad Crisp, Product Development & Management Association, 2009.
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