Being first is key, unless you can be substantially better. Being third means being out of luck.
By Kim Rowe
Embedded.com (02/27/10, 08:42:00 PM EST)
Ever wonder why deadlines in embedded projects are so important? When good project managers sweat over every detail to make sure the project doesn't slip, do you wonder why it was perceived as so important? After all, from the perspective of the engineering lab, a few days of slippage on a task will slip the project by only a few days—and there is always another show to launch the product.
Getting your OEM product to market in the right time frame is one of two critical factors in the success of your product after development kickoff. The second critical factor is product quality. If your organization is obsessed with meeting these self-imposed deadlines for product launch and maintaining quality, it's likely because you work in a great products company.
The reason that time to market is so important is because being late erodes the addressable market that you have to sell your product into. If you initially target a market segment of ten million units, with a market lifetime of 18 months, and you are six months late, the addressable market will likely be in the range of three million units. Not only will the market be smaller, the competition will be much more intense because others have an established base to sell from and the early growth is starting to flatten.
What happens when the addressable market shrinks? Your smaller market means that your volume of sales goes down in direct proportion to the loss of market size. The decrease in volume of sales is critical to your company's business model. Now you have lost economies of scale in manufacturing and purchasing, and will suffer loss of experience effect relative to your competitors. This will directly affect the company's profitability and if you do this too often, being late will directly affect your job and those of your colleagues.
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