Robert H. Hayes, William J. Abernathy

In the past 20 years, American companies have perhaps learned too well a lesson they had long been inclined to ignore: Businesses should be customer oriented rather than product oriented.

…At last, however, the dangers of too much reliance on this philosophy are becoming apparent.

…The argument that no new product ought to be introduced without managers undertaking a market analysis is common sense. But the argument that consumer analyses and formal market surveys should dominate other considerations when allocating resources to product development is untenable. …Customers may know what their needs are, but they often define those needs in terms of existing products, processes, markets, and prices.

Deferring to a market-driven strategy without paying attention to its limitations is, quite possibly, opting for customer satisfaction and lower risk in the short run at the expense of superior products in the future. Satisfied customers are critically important, of course, but not if the strategy for creating them is responsible as well for unnecessary product proliferation, inflated costs, unfocused diversification, and a lagging commitment to new technology and new capital equipment.

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