Business Reasoning for Rapid Productization in Small Enterprises

Kai Hänninen, Matti Muhos, Tuomo Kinnunen, Harri Haapasalo

Department of Industrial Engineering and Management, University of Oulu, Oulu, Finland.
Oulu Southern Institute, University of Oulu, Oulu, Finland.

DOI: 10.4236/ti.2014.51007                

Abstract

In order to succeed, companies must offer quality products and services, ones that are in demand. Rapid productization (RP) is a concept originating from practical challenges expanding customer preferences. RP is a process of quickly supplementing a company’s product or service offering to meet unexpected customer preferences. The objective of this study is to describe how an RP exists in small enterprises and how the use of RP is reasonable. This case study opens the RP concept by clarification of business case objectives set to start RP, analysis of RP challenges and description of business reasoning used for RP in the case companies. Products offered to customers may be a result of cooperation among many companies, while the products are modular, consisting of interlinking elements. When these types of products are well managed, it can be easy to respond to changing customer requirements. This type of RP can be the livelihood of especially small-and medium-sized enterprises (SME). However, the capability of productizing rapidly provides a significant competitive edge also for larger players.

Keywords

Rapid Productization; Reasoning; Business Case; Decision Making; SMEs

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	V. Krishnan and K. Ulrich, “Product Development Decisions: A Review of the Literature,” Management Science, Vol. 47, No. 1, 2001, pp. 1-21. http://dx.doi.org/10.1287/mnsc.47.1.1.10668
[2]	R. G. Cooper, “Winning at New Products: Accelerating the Process from Idea to Launch,” 3rd Edition, Perseus Publishing, Cambridge, 2001.
[3]	P. D. Reynolds, “New and Small Firms in Expanding Markets,” Small Business Economics, Vol. 9, No. 1, 1997, pp. 79-84. http://dx.doi.org/10.1023/A:1007916217140
[4]	P. J. A. Robson and R. J. Bennett, “SME Growth: The Relationship with Business Advice and External Collaboration,” Small Business Economics, Vol. 15, No. 3, 2000, pp. 193-208. http://dx.doi.org/10.1023/A:1008129012953
[5]	T. Beck, A. Demirguc-Kunt and R. Levine, “SMEs, Growth, and Poverty: Cross-Country Evidenced,” Journal of Economic Growth, Vol. 10, No. 3, 2005, pp. 199-229. http://dx.doi.org/10.1007/s10887-005-3533-5
[6]	M. Ayyagari, T. Beck and A. Demirguc-Kunt, “Small and Medium Enterprises across the Globe,” Small Business Economics, Vol. 29, No. 4, 2007, pp. 415-434. http://dx.doi.org/10.1007/s11187-006-9002-5
[7]	M. Tagliavini, A. Ravarini and A. Antonelli, “An Evaluation Model for Electronic Commerce Activities within SMEs,” Information Technology and Management, Vol. 2, No. 2, 2001, pp. 211-230. http://dx.doi.org/10.1023/A:1011417703063
[8]	S. Blili and L. Raymond, “Information Technology: Threats and Opportunities for Small and Medium-Sized Enterprises,” Internal Journal of Information Management, Vol. 13, No. 6, 1993, pp. 439-448. http://dx.doi.org/10.1016/0268-4012(93)90060-H
[9]	D. J. Storey, “Entrepreneurship, Small and Medium Sized Enterprises and Public Policy,” In: Z. J. Acs and D. B. Audretsch, Eds., Handbook of Entrepreneurship Research, International Handbook of Entrepreneurship Research, Dordrecht, 2003, pp. 473-511.
[10]	I. Alam, “An Exploratory Investigation of User Involvement in New Service Development,” Journal of the Academy of Marketing Science, Vol. 30, No. 3, 2002, pp. 250-261. http://dx.doi.org/10.1177/0092070302303006
[11]	A. Johne and C. Storey, “New Service Development: A Review of the Literature and Annotated Bibliography,” European Journal of Marketing, Vol. 32, No. 3-4, 1998, pp. 184-251.
[12]	P. Trott, “Innovation Management and New Product Development,” 4th Edition, Prentice Hall, Prearson Education Limited, Essex, 2006.
[13]	L. Hvam, N. H. Mortensen and J. Riis, “Product Customization,” Springer, New York, 2008.
[14]	E. Jaakkola, “Unraveling the Practices of ‘Productization’ in Professional Service Firms,” Scandinavian Journal of Management, Vol. 27, No. 2, 2011, pp. 221-230. http://dx.doi.org/10.1016/j.scaman.2011.03.001
[15]	K. Hänninen, T. Kinnunen, M. Haapasalo and M. Muhos, “Rapid Productisation: Challenges and Preconditions,” International Journal of Product Lifecycle Management, Vol. 6, No. 3, 2013, pp. 211-227. http://dx.doi.org/10.1504/IJPLM.2013.055877
[16]	K. Hänninen, T. Kinnunen, H. Haapasalo, M. Saarela and M. Muhos, “Use of Rapid Productisation in Welfare Service,” International Journal of Performance Measurement, 2013, in Press.
[17]	K. Hänninen, M. Muhos and H. Haapasalo, “A Multiple Case Study of Small Business Upstream Supply Chain Uncertainties in Rapid Productization,” International Conference on Engineering Design, Seoul, 19-22 August 2013, p. 300.
[18]	T. Kinnunen, A. Pekuri, H. Haapasalo and P. Kuvaja, “Business Case Analysis in New Product Development,” Global Journal of Management and Business Research, Vol. 11, No. 2, 2011, pp. 49-56.
[19]	BCP, “The Business Case Checklist,” Business Case Pro, Lexington, 2006.
[20]	M. Saunders, P. Lewis and A. Thornhill, “Research Methods for Business Students,” Financial Times/Prentice Hall, London, 2007.
[21]	R. K. Yin, “Case Study Research: Design and Methods,” 3rd Edition, Sage Publications, Beverly Hills, 2003.
[22]	J. Corbin and A. Strauss, “Basics of Qualitative Research: Techniques and Procedures for Developing Grounded Theory,” 3rd Edition, SAGE Publications, Inc., Thousand Oaks, 2007.
[23]	D. Cooper and P. Schindler, “Business Research Methods,” McGraw-Hill, Irwin, 2010.