Assignment on product development risks

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Reference no: EM132698994

Product Development Risks

You have the opportunity to invest RM 10 billion for your organization to develop a car engine for passenger cars. The development plan will span over 5 years. The final product costing RM 500 million / unit could reach a sales potential of eventually making RM 250 billion for the organization. The new engine can be placed in service 5 years from now, but only if it qualifies four years from now for certification clearing commercial use and only if it meets America's Automotive Administration's (AAA) ever tightening standards for environmental pollution and noise reduction. Certification also has to be obtained from the Malaysian Director General of Automotive Association of Malaysia (MAA). There is competition from world-class manufacturers like Toyota, Honda and Nissan who are developing competing engines with a long successful track record. If you decide to proceed with the project, you must also determine where the new engines will be produced and develop the manufacturing facilities. If you decline to proceed, your organization could invest its resources elsewhere and based on its track record for successful products developed in the past it could get attractive returns.

Question 1. ?? ? ?

Explore your options dealing with this proposal. ? ?

Question 2. ?

In case of lengthy product design and development time, examine the kinds of risks that the organization will be exposed to.

Reference no: EM132698994

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