mti the flight of kittyhawk

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Hewlett Packard The Flight of KittyhawkGROUP 6

Ansa Ephraim

Shashikiran

Nikhil John Kurian

Sidharth Ramachandran

Supriya K

Kavitha Jayaram

Tony Sebastian

Alok K

Sudipta M

Veerender N

Manikandan V

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

1

Agenda

Context of the case

Salient points of the Kittyhawk project

Major Players

Strengths and weaknesses of the team

Reasons for failure

What could have been done

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

2

The KittyhawkIntroduced in June 1992 by HP

The smallest hard disk drive in the world

1.3 inches in diameter

The Kittyhawk9/23/2011

20 MB of storage! Ability to withstand 3-foot fall without data loss

Management of Technological Innovations | Indian Institute of Management Kozhikode

3

The Divisional Story

President and CEO (Lew Platt)

Test and Measurement Organization

Computer Products Organization (Dick Hackborn)

Computer System Organization

Measurement Systems Organization

Personal Information Products

Printing Systems

Mass Storage Group (Ray Smelek)

Ink-Jet Products

Sales & Support

Disk Memory Division (Bruce Spenner)

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

4

The Disk Memory DivisionA niche player Established in the 5.25 and 3.5 markets Focus on higher capacities and faster access times

High end work station and network server markets

First to introduce many new high capacity drives

Revenues in 1992DMD 3% HP

Market SegmentsOEM 20% Internal HP

Disk Drive Revenue4000 3000

519

97%9/23/2011

80%

HP

IBM

Seagate5

Management of Technological Innovations | Indian Institute of Management Kozhikode

The Project Team

Executive support from top management

Limited support from functional management and R&D at DMD

The separation of Kittyhawk project from DMD

Team autonomy Develop product Find markets Cultivate customer base

Core project team Manufacturing, Marketing and R&D Rick Seymour as leader Can-do type of people Sign the creed I am going to build a small, dumb, cheap disk drive Team dynamics and Group development research6

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

The Kittyhawk Project Charter Introduce Kittyhawk in 12 months Accomplish break-even time of less than 36 months Achieve a $100 million revenue rate in 2 years after launch

1

2 To be the first 1.3 disk drive in market

3 Grow faster than disk drive market to help HP become industry leader (~35%)

49/23/2011

57

Management of Technological Innovations | Indian Institute of Management Kozhikode

The Original Kittyhawk Market

The Potential Markets

Narrow focus

The Original Kittyhawk MarketThe strategy Lead industry in 1.3 form factor Ride mobile computing explosion to get to low cost Ill sell you a drive for $49.95

Mobile information technologies Communication technologies Consumer electronics Automotive electronics New opportunities in standard computer technology9/23/2011

Disk drive specifically focused at mobile computing market Inexpensive drive for use in currently unviable applications

Management of Technological Innovations | Indian Institute of Management Kozhikode

8

The Competition and CustomersThe Competition

Flash Storage

1.8 disk drive

Planned Customers

Actual Customers

9/23/2011

PDA Japanese word processors Sub-notebooks PDAs Hard copy devices Digital Cameras Printers Cash registers Copiers Telecom switching systems Management of Technological Innovations | Indian Institute of Management Kozhikode Fax Machines

9

The New Kittyhawk Market

The Way Out Continue pursuit of ruggedness based applications Leverage ruggedness and electronics integration technologies to make a 2.5 drive A $50 disk drive9/23/2011

Discontinuation of Project on September 7, 1994

No enthusiasm from DMD Management No profit cushion for further redesign Flattening of existing sales growth Need for critical new products10

Management of Technological Innovations | Indian Institute of Management Kozhikode

Question 1

Who were the key players in the emergence of the Kittyhawk project? What did each of them contribute?9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

11

The key players

Bruce Spenner (General Manager, DMD)Part of the RISC implementing team A visionary & risk taker Questions sparked entrepreneurial spirit Attack a new hill Allocated priority Empowered the team Strategic staffing Clear, specific, aggressive goals

Richard Hackborn (Exec VP, Computer Products)Known for building HPs highly successful printer business Provided the banner of approval Believed in the project scope Allocated funds from the Computer Products Organization Failed to communicate between the notebook and DMD division

Lew Platt (President and CEO)Provided exec support, frequent checks, champion to the outside world

Rick Seymour (Team Lead)Quick thinker Recruiter for the rest of the team Set the pace- the motivator Bolstered HPs commitment to Kittyhawk

Jack White Analysis and research, zoned in on a few product options9/23/2011

George Drennan The first designer who gave shape to the product12

Management of Technological Innovations | Indian Institute of Management Kozhikode

Question 2

What are the strengths and weaknesses of the way HP structured and supported the Kittyhawk development team?9/23/2011 Management of Technological Innovations | Indian Institute of Management Kozhikode 13

StrengthsAutonomy in product development Team Formation Senior Management Movement out of the current set up

HP CultureTechnical expertise of employees

Leaders

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

14

WeaknessMarket Survey

Senior leaders were not technical experts

Indecisiveness

Wrongly defined objectives

Conflict with the parent division Failure to recognize the potential of the product and give a second chance

No support from internal clients

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

15

The Cheap, Dumb Disk driveFinancial goals to break even in 36 months and a $100 MM Targeted specific customers with high requirements like sturdiness

Failed to challenge the industry cost floor of $130

A disruptive technology that pursued an industry that was in its infancy assumed an explosion in mobile computing to reach low cost

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

16

Question 3

Why did HP pursue the Kittyhawk project this way? What should they do differently if they could do it over?9/23/2011 Management of Technological Innovations | Indian Institute of Management Kozhikode 17

Why did Hewlett-Packard pursue the Kittyhawk project this way?

Device market predictions

Market Research predictionsMarket research technique was used to identify potential markets that could prove ineffective with disruptive technologies like Kittyhawk

Technology restrictions

Internal customer requirements

DMD functioned as an OEM and hence had to always follow the market and the major players

The MR firm did not have technology experts who could predict the future and therefore depended on the clients leading to a shared view Personal Digital Assistants were predicted to grow in usage and a lot of the major companies had invested in them

$130 was thought to be the cost floor for manufacturing any hard disk drive; introducing innovative design changes to bring this down was thought near impossible in the short time

Ready internal customer in the form of Corvallis division that was making a super sub-notebooks; serves as a reassurance and safety net

Greater emphasis on the shock-proof requirements expressed by few potential customers defining the entire product design and characteristics

9/23/2011

Management of Technological Innovations | Indian Institute of Management Kozhikode

18

What should they do differently if they could do it over?

Improved processes for evaluating new product directionsImplement accepted innovation processes like the Stage Gate model that attempts to evaluate the market for a product before proceeding

Creating silos within an organization does not always workLeads to a differentiation of values and ideas that can create out-of-the-box ideas but also lead to polarization within the organization

Better market understanding & company integrationAs a manufacturer of OEM devices, DMD would need companies to innovate and create new categories in order to drive their innovation

Allows a company to move from intuition and gut-feel to strategic direction based on calculated risks and estimates

HP need not have created an entirely separate area for this team but incor