United Beverages: Product Development Genius or One-Hit-Wonder?

Abstract

United Beverages' first product, GangBusters Interactive Beverages, has reached the stage of wide brand recognition. However, over the past 12 months, growth has stalled and the product development team at United Beverages is considering several ideas for future growth. The team must consider market and technical uncertainty, as well as resource allocation issues as they define the new product-development strategy for United Beverages.

Excerpt

UVA-OM-1335

Rev. Aug. 23, 2019

United Beverages: Product Development Genius or One-Hit Wonder?

Paul Diaz sat in his office late one night staring at the financial statements of the company he had cofounded, United Beverages. He always enjoyed the view from his office high atop Brickell Avenue in Miami. There wasn't a cloud in the sky and the moonlight lit up all of Biscayne Bay. Under normal circumstances, it would be a very soothing view. Unfortunately, Diaz couldn't seem to relax. The year had just come to an end, and he wanted to review the data given to him by his CFO (Exhibit 1). He leaned back for a moment and realized that it was past midnight, and for the first time in almost five years, he had cause for concern.

United Beverages' (United's) first product, GangBusters Interactive Beverages (GangBusters), was reaching the stage of wide brand recognition. However, over the past 12 months, growth had stalled and Diaz's mind was already focused on the future. Would it be possible to develop another successful product like GangBusters? Could it be that United was just a one-hit wonder? As an experienced entrepreneur, Diaz had gone through various ups and downs with his previous ventures, and he did not want to see his latest and most successful creation fail. Several ideas for future growth had been discussed in previous meetings with his product development team. The best candidate was a carbonated energy drink for kids aged 9 to 12. However, Diaz was not completely sold on the idea. He grabbed a GangBusters bottle off his desk and stared at it. Maybe United needed a revolutionary product idea in order to become a serious player in the highly competitive beverage industry. For the past few weeks, he had been tossing around just such an idea: flavor mixing as a revolutionary new interactive beverage. He was excited and wanted to bring the development team up to speed—tomorrow's development meeting would be a milestone for United.

United Beverages' History

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Keywords: new product development, innovation, resource allocation, product portfolio