Keen take on                                keeping an eye on

Lowered the boom on                 forged a path

Hit the road                                   payoff


1. Sharp’s excellent understanding of U.S. consumers has made No.1 in fax machines and microwaves.

2. Mitsuda, now head of European operations, travelled often, making unannounced calls on dealers.

3. Sharp is, well, sharp at closely watching research and the ever-changing consumer.

4. It lowered the price below $2,000 and eliminated its competition.

5. Less than a quarter the size of its Osaka neighbor Matsushita, and not half as big as glamorous compatriot Sony, Sharp has created a place in the market all its own.

6. The big reward comes in finding a machine for people who say no to the question, “Do you need a computer?”



Section 4. Product Development and Planning

Target questions:

1. What is an adaptation?

2. What is a modification?

3. What is an innovation?

4. Why is it important to obtain a patent?

5. Why does the failure of a new product take place?


The number of products coming into market every year is overwhelming. The major part of these products is not new, but adaptations. It means that these products are not new, they are existing items to which a modification has been made. Only few products are really original orinnovation. A great number of innovations and adaptations are designed, produced and marketed by small businesses. Very often a new product is formed on the basis of new business. Sometimes there is a patent to make business more successful. But it happens very often that market research hasn’t been done carefully.

Even in case larger scale producers do more research and testing there is no sure success. A promising new product may be also robbed of success by unreasonable prices, inadequate promotion and poor selling methods. Generally, less than one fifth of all new products turn out to be profitable.


Exrcise1. Which of the following products are innovations and which are adaptations?

clock-television      keyphone                       CD

radio                       train                                refrigerator

computer                convertible                     TV

tandem bicycle      antidandruff shampoo  videophone


Give your own examples of innovations and adaptations.

Activity 1. Swatch: Ready for Net Time?

Read the article Swatch: Ready for Net Time?

Before reading the article, answer the following questions:

1. How much time does it usually take for a new product to catch on [to become popular]?

2. In what way can a consumer surprise the producer?

3. Would you like to produce something original or an adaptation? Explain why.

4. What are the conditions of successful product development?

5. What products are the market conditions fair for in this country?



                    The watchmaker is looking for a high-tech blockbuster

By Carol Matlack in Biel

You're toweling off after a swim when your wristwatch-phone starts beeping. You tap a button, and – presto, you're talking to your broker. While you chat, you tap another button and log on to the Internet to check the performance of a stock he's recommending. Far-fetched? Not to Nicolas G. Hayek, chief executive of Swatch Group Ltd. The flamboyant Lebanese-born engineer who revolutionized the watch business in the 1980s is looking for his next breakthrough. He's putting a Swatch wristwatch-phone on the market this year, as well as a watch equipped for Internet access. He's also working with Hewlett-Packard Co. to develop even more advanced watches.

There's no doubting Hayek's enthusiasm. His office in Biel, Switzerland, is cluttered with Swatch inventions, including designs for a hybrid battery-and-gasoline powered car. Yet isn't the watchmaker getting distracted with gimmicks? ''Some people considered the Internet to be a gimmick,'' he says. Hayek admits that his new gizmos may not become best-sellers. ''But even if a product is used by 20% of consumers – 20% of consumers, you cannot ignore,'' he says.

    Hayek, who owns nearly 40% of Swatch, is riding high these days. Fueled by Asia's recovery and record U.S. consumer spending, Swatch turned in its best performance since 1992 last year, and its stock price doubled. Sales were up 10.9% to $2.2 billion and profits jumped an estimated 20% to $258 million. Yet sustaining that pace will be tough, because the watch market is growing at less than 5% a year.

    Hayek's quest for a blockbuster new product is also proving difficult. A couple of attempts have misfired, including a prototype wristphone that was too bulky to market and a stake in DaimlerChrysler's troubled Smart Car project, which Swatch sold back to the auto maker. Some doubt that his newest offerings will fare much better. While the mobile-phone industry is racing toward the Internet, the Swatch wristphone being launched this year won't offer Web access. The Internet Swatch is an awkward contraption that has to be used with a computer terminal and a special mousepad. ''All of Swatch's attempts to diversify have been a flop,'' says Frederick Hasslauer, an analyst at Bank Sal. Oppenheim in Zurich. ''Mr. Hayek is an extremely good salesman, but he gets carried away by his own enthusiasm.''

BRAND POWERHOUSE. He certainly scored big starting in the early 1980s by turning the whimsical, $30 Swatch into a fashion accessory. More recently, as competition has stiffened, he has opened his own retail stores. Swatch now has 300 stores worldwide and plans to open 200 more by the end of 2001. Hayek is also rolling out new models such as the ultrathin Swatch Skin, priced at $60, and an aluminum-encased sport model, the Swatch Irony Scuba 200, priced at $70. Overall, his company now accounts for more than 50% of the Swiss watch industry with Swatch owning a stable of brands, including Omega, Longines, Tissot, and Calvin Klein. He paid an estimated $75 million last year for French watchmaker Breguet.

    Time is running short for Hayek, 72. He plans to step aside from day-to-day-management within two years, probably turning that job over to his son. Meantime, the quest for a hot product goes on. One possibility: A watch with a smart chip that acts as a debit card. Who knows? This master watchmaker could still have a winner in his toolkit.

From Business Week

Exercise 1.   Find in the text English equivalents to the following words and expressions.

1. дивний, зарозумілий

2. той, що кидається в око

3. хитромудрий механізм/пристрій/винахід (3)

4. підтримувати темп

5. пошуки

6. не відбутися, не вдатися

7. громіздкий

8. пережити невдачу або успіх

9. килимок для миші

10. невдача, фіаско

11. ставати жорстким

12. передавати (справу) іншому

13. модний товар, товар, що швидко розкуповується (2)

14. відмінна річ, «вищого класу»

15. той, що має творчу уяву

Exercise 2.   Say what you have learnt about:

1. Nicolas G. Hayek;

2. Swatch Group Ltd;

3. Hayek’s new gizmos (both successful and unsuccessful);

4. Hayek’s plans for the future.


Exercise 3.   Think and answer:

1. Why is Nicolas Hayek looking for his next breakthrough?

2. Why is it always difficult to create a blockbuster new product?

3. Why did Frederick Hasslauer say that Mr. Hayek is an extremely good salesman, but he gets carried away by his own enthusiasm?

4. Is it possible to create a wristwatch-phone with Web access? Why?

5. Is it possible to create a watch with a smart chip that acts as a debit card?

6. Must a chief executive of a manufacturing company be inventive, imaginative and risky in his quest for a hot product? Give reasons.


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