In which of the following cases is crowdsourcing used for new product development?
A) A company creates a forum where anyone can contribute new product ideas.
B) A company hires a marketing agency to generate new product ideas.
C) A company reviews the sales, costs, and profit projections of an existing product.
D) A company depends on its R&D department to come up with new ideas.
E) A company partners with a design agency to create a few prototypes.
The correct answer and explanation is :
Correct Answer:
A) A company creates a forum where anyone can contribute new product ideas.
Explanation:
Crowdsourcing is the process of obtaining input, ideas, or solutions from a large group of people, typically through an open call on the internet. It is widely used in new product development (NPD) because it leverages diverse perspectives, creativity, and expertise from a broad audience.
In the given options, the only case that truly represents crowdsourcing is Option A, where a company creates a forum allowing anyone to contribute product ideas. This approach enables businesses to tap into a wide range of insights from customers, enthusiasts, and even industry experts. Platforms like LEGO Ideas, My Starbucks Idea, and Dell IdeaStorm are examples of successful crowdsourcing initiatives where companies invite public participation to develop innovative products.
Why the Other Options Are Incorrect:
- B) A company hires a marketing agency to generate new product ideas.
- This is outsourcing, not crowdsourcing. The company is paying an external agency for ideas, rather than leveraging a large group of voluntary contributors.
- C) A company reviews the sales, costs, and profit projections of an existing product.
- This refers to financial analysis and business forecasting, not the process of gathering new product ideas from the public.
- D) A company depends on its R&D department to come up with new ideas.
- This is traditional internal innovation, not crowdsourcing. Crowdsourcing involves external contributors rather than just in-house experts.
- E) A company partners with a design agency to create a few prototypes.
- This is collaboration with a specialized firm, not open participation from a large, undefined crowd.
By using crowdsourcing, companies can generate fresh ideas, test concepts early, and enhance innovation while reducing development costs and risks.