In order to compete in the dynamic business environment, it is has become extremely essential for the businesses and industries to enhance their performance. To achieve this new product development is considered a vital source. Therefore, the companies are now required to focus more on the quality of the product instead of internal efficiency. Hence, more emphasis is being placed on the new product development processes that enable the firms to develop more complex products to provide paramount quality products and services to the customers. this research has analyzed the benefits as well as challenges of new product development. The researcher also examined various factors that affect new product development. A comprehensive product development constitutes of 8 steps. It has been also observed that factors such customer satisfaction, design and culture significantly influence the development of new products.