What are the similarities and differences between a community-driven product development process and a traditional product development process within a firm?
In a community-driven product development process the customers get involved in the creation of products. Consumers’ feedbacks are highly valued and can help tremendously in the development process of upcoming products. For example, by interacting directly with customers via the use of social media, a company can forecast and maximize its business decisions to create more demand and anticipate potential growth. Thus, this method can increase consumer’s experience and build loyalty by forming an active community such as the Threadless community.
In a traditional product development process, the company will develop a product on its own and use forecasting to anticipate future profits and demand. Thus, the company has to invest in research and development to analyze the market and social studies to understand customer’s behavior; in order to use efficiently target segmentation. Therefore, the primarily goal for the company will be to make profits by interacting closely with the consumers.
I believe that large companies tend to use a traditional product development process because they are somewhat more knowledgeable and were implemented in the market earlier and for a longer period of time. Those larger companies had more capital to invest in research and development and a structure to create their products. Smaller companies can however focus on a community-driven product development process to grow rapidly and adapt to the competitive current market. Thus, building a community can be an advantage for them for evolving and becoming profitable via the use of social media and other portals, which can be much cheaper and less time consuming than investing in research and development.
