Business analysis is the second essential step in the new product development process, following idea generation and screening. It is a review and in-depth assessment of the new product’s expected sales, costs, and profits to determine whether these financial factors meet the company’s strategic and financial goals.
This analysis includes a detailed forecast of market potential, an analysis of production, marketing, and distribution costs, and an assessment of the return on investment. If the results of the business analysis are positive and sustainable, the product moves on to the development and testing phase. If the forecasts are unfavorable, the idea is usually rejected or returned for reconsideration.
