AMERICA EDGE IN NEW PRODUCT RESEARCH-AND-DEVELOPMENT

''Controlled scrimping'' involves the containment of selected developm ent costs and time-to-market by being less than thorough in non-critic al areas. Resources marshalled from scrimping can be redeployed to inc rease the number of projects undertaken, diversify the project portfol io or increase the number of products developed. A comparative study o f 60 U.S. and 60 Japanese products revealed that although overall new product success rates were not significantly lower when U.S. firms scr imped, Japanese firms that scrimped experienced significantly lower su ccess rates. The explanation for these differences is rooted in the di ssimilar U.S. and Japanese cultures that inhibit Japanese firms from e ngaging in successful scrimping. However, U.S. managers ave advised to use scrimping strategies cautiously as scrimping necessarily increase s the risk of product failure. The challenge is to manage the tradeoff s between scrimping time-to-market product quality and the risk of pro duct failure within a portfolio of new product R&D efforts.