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MGT504 - Organization Theory and Design - Lecture Handout 31

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REASONS FOR NEW PRODUCT SUCCESS

The next question to be answered by research was, “why are some products more successful than others?” why did a product such as Frappuccino succeed in the marketplace. While those such as Miller Clear Beer an Frito – Lay’s lemonade failed? Further studies indicated that innovation success was related to collaboration between technical and marketing departments. Successful new products and services seemed to be technologically sound and also carefully tailored to customer needs. A study called Project SAPPHO examined seventeen pairs of new product innovations, with one success and one failure in each pair, and concluded the following

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MGT504 - Organization Theory and Design - Lecture Handout 11

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THE EXTERNAL ENVIRONMENT

THE ENVIRONMENTAL DOMAIN

In a broad sense the environment is infinite and everything outside the organization. However, the analysis presented here considers only the aspects of the environment to which the organization is sensitive and must respond to survive. Thus, organizational environment is defined as all elements that exist outside the boundary of the organizational environment is defined as all elements that exist outside the boundary of the organization and have the potential to affect or part of the organization.

The environment of an organization can be understood by analyzing its domain within external sectors. An organization’s domain is the chosen environmental field of action. It is the territory an organization stakes out for itself with respect to products, services, and markets served. Domain defines the organization’s niche and defines those external sectors with which the organization will interact to accomplish its goals. Barnes & Nobel ignored an important part of its domain when the bookselling environment changed. The company was slow to take advantage of new technology for e-commerce, allowing the competition to gain a huge advantage.

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