What would you rate as the strengths and failings of the manner Hewlett- Packard structured and supported the Kittyhawk development squad?
* Kittyhawk undertaking squad was separated from remainder of the R & A ; D division so that opposition from other squads was minimized.
* The squad had freedom to accommodate a new development procedure suited to their demands.
* They hired the best endowment available with proved path record from other divisions in HP.
* They did non enroll members who had the bing HP cultural prejudice. To reenforce the fact that squad members have to work otherwise, they had to subscribe a credo.
* Researched squad kineticss carefully. As a consequence the squad worked really good.
* Set up clearly stated 5 simple ends in the beginning which were used to steer the squad.
* They had direction bargain in. This besides helped them obtain necessary support.
* Team had independent determination doing powers. They had the flexibleness to travel fast and do speedy determination like a little startup company.
* Spenner created a sense of urgency in the squad. As a consequence they completed the undertaking on agenda and within budget.
* The development squad carried double duty developing the merchandise every bit good market for it.
* Team decided to develop little 1.3 inch thrust, without making adequate market research. After the undertaking had started they were still calculating out a market after the engineering, instead than the other manner around.
* They took the attack that if they build it, people will purchase it and had set an optimistic estimation of $ 100 million gross rate for a market that did non even exist.
* By puting such accent on the 1.3 inch thrust with liberty to do determinations etc, HP could hold made the remainder of the DMD squad feel as if they were working on less of import undertakings.
* Took good people from other undertakings in DMD which was a large hazard because other undertakings may non finish.
Please refer to exhibit 1 for SWOT analysis.
What do you believe of the manner the squad set out to happen a market for the Kittyhawk? Do you believe their methods were appropriate?
The Kittyhawk squad employed assorted ways to make the market analysis for their new merchandise ( Exhibit 2 and 3 ) . They contacted a extremely reputed market research house but they were unable to make any decision. They spoke to other companies in the ‘PDA ‘ industry to entree demand for their merchandise. They attended the Consumer Electronics Show in Chicago but focused merely on newest nomadic calculating merchandises such as PDAs and digital Pens.
Mobile market was non yet established but since the Kittyhawk squad narrowed down to these countries, their market analysis was biased. They should hold included desktop and notebook computing machines in their market research and should hold accessed immediate and future market demands ( characteristics, monetary value and bringing clip ) for a little storage device ( Exhibit 4 ) . Not merely they did non make this analysis, they ignored the demands of Nintendo and some other sellers for a little storage device with minimum characteristics for under $ 50.
The squad decided to non prosecute that way for four grounds:
– Lowest cost in the industry for a to the full features thrust was about $ 130. It was non traveling to be possible to construct a thrust for $ 50.
– Even if they could construct the thrust for $ 50, they feared it would non capture market large plenty to accomplish interrupt even in the coveted clip frame.
– They believed that PDA market with application specific niche in the market would win in the nomadic calculating infinite.
– The demand for nomadic market seemed something they could fulfill easy. They were anticipating high growing in this country which would finally assist them convey down the monetary value of their thrust to $ 50.
The job with their analysis was they had no factual informations about expected gross revenues volume to back up their determination to travel after PDA market. Mobile computer science was still in babyhood. They built a merchandise which had cool characteristics at a high monetary value whereas the market was looking for simple device with a lower cost ( Exhibit 5 ) . They knew that nomadic industry wanted a merchandise like what they were constructing but they did non work with them on monetary value or expected gross revenues volume. They had no eventuality plans if nomadic market failed to take off as they were anticipating.
What do you believe are the root causes of the failure of the Kittyhawk plan? Is at that place any manner HP could hold avoided its destiny by turn toing those root causes? In other words, could they have been addressed / remedied in some manner?
5 Major Mistakes that HP made:
1. Decided to travel with low storage, which would non run into some client ‘s demands. Some clients were inquiring for a thrust with more than 40MB of storage whereas Kittyhawk was ab initio designed with 20MB capacity.
2. Incorrect market anticipations refering the PDA market growing.
3. Planned production degrees were much higher than existent.
4. Did non be after for the deficiency of demand for the accelerometer from some market sections ( e.g. Nintendo ) , that is, over-predicted the demand for huskiness.
5. Did non do the thrust sufficiently low cost for clients ( $ 250 monetary value point was excessively high ) .
The root causes of errors:
Improper and headlong market research ( pricing, characteristics, design demands ) .
They setup gross marks, monetary value point, interrupt even end, and gross growing for a riotous engineering in a new merchandise targeted for a new market. Once they set those marks, they constrained themselves to accomplish those marks even though market required them to drastically cut down the thrust monetary value.
The market was excessively wide for their merchandise and they decided a focal point on an undeveloped section of the market.
HP could hold addressed these issues by either developing more than one merchandise within the group to fulfill different client demands or take one market section. The direction squad could hold chosen to develop one merchandise at a cheaper monetary value ( $ 50, as requested by Nintendo ) in order to run into current demands of big volume clients. They could hold increased the memory capacity every bit good. This would hold aligned features of the merchandise ( s ) , including characteristics and pricing, with client demands to let for explosive growing. They could hold screened the merchandise for success or done some theoretical account ( Exhibit 6 and 7 )
Exhibit 1 – Swot analysis
Started operation in new edifice to enable development of new procedures
Had direction bargain in
Hired experienced team members with proved path record
Had fiscal support
Autonomous determination devising
Not certain what to construct – inexpensive thrust or characteristic rich expensive thrust
Did non make plenty market research
Pulled away resources from other undertakings
Breakthrough merchandise with great possible
No viing merchandise in nomadic industry
Willing clients at lower monetary value point
New engineering with possible for use in new merchandises
Other companies are developing smaller thrusts
Flash memory is smaller, lighter and could be monetary value competitory
Unproven mark market
No hazard appraisal
Ansoff H Igor ( 1957 ) , “Market Strategy Given Newness of Markets and Products ” HBR Sep-Oct.
HP was seeking to diversify with their new disc thrust. They were looking to research new markets with a new merchandise.
Steven C. Wheelwright and Kim B. Clark ( 1992 ) “Creating Project Plans to Concentrate Product Development, ” HBR March – April.
They had a breakthrough merchandise utilizing new nucleus procedures.
– Smallest in size
– Rugged ( 3 pess bead )
– Low power ingestion
– Light weight
Exhibit 4 – Porter ‘s Five Forces
Exhibit 5 – The Risk Matrix
…be the same as in our present market
…partially overlap with our present market
… be wholly different from our present market or unknown
Customer ‘s behaviour and determination devising procedure will…
Our distribution and gross revenues activities will…
The competitory set ( officeholders or possible entrants ) will…
…not at all relevant
Our trade name promise is…
Our current client relationships are…
Our cognition of rival ‘s behaviour and purposes is…
…is to the full applicable
…will necessitate important version
…is non applicable
Our current development capability…
Our engineering competency…
Our rational belongings protection…
Our fabrication and service bringing system…
to those of
of our current
The needed cognition and scientific discipline
The necessary merchandise and service
The expected quality standards…
Exhibit 6 – Screening for Success
Is it existent?
Is the market existent?
Is there a demand or desire for the merchandise?
Can the client purchase it?
Is the size of the possible market adequate?
Will the client purchase the merchandise?
Is the merchandise existent?
Is there a clear construct?
Can the merchandise be made?
Will the concluding merchandise satisfy the market?
Can we win?
Can the merchandise be competitory?
Does it hold a competitory advantage?
Can the advantage be sustained?
How will rivals react?
Similar characteristics merchandises at lower monetary value
Can our company be competitory?
Do we hold superior resources?
Do we hold appropriate direction?
Can we understand and react to the market?
Exhibit 7 – A-T-A-R
Merchandise Use Test
Market Unit of measurements
twenty: Best beginning for Kittyhawk
ten: Some cognition gained