The Launch of One Laptop Per Child Project - Case Study Example

Running Head: $ 100 case analysis Report Name: University: Course: Tutor: Date of Submission: Brief description of the company situation This report gives an overview of “$ 100 Laptop” case analysis a concept which was introduced in 2002 by Professor Nicholas Negroponte successful venture capitalist, author and cofounder and chairman emeritus of the Massachusetts Institute of Technology (MIT).The concept primarily involved building a cheaper personal computer by Media Lab that aimed at providing Internet and multimedia machines to millions of children in developing countries. The concepts later referred to as the “$ 100 Laptop” was launched at the Media Lab in the year 2003 before being spun into a separate nonprofit association, One Laptop Per Child (OLPC) founded by Negroponte in January 2005.The project which was unveiled by Negroponte was launched at UN World Summit on the Information Society a project which led to the development of working prototype of a $100 Laptop machine that used freely available open source Linux software as its operating system. Although aimed at primary school children aged 6 to 12, other age groups could use it too due to its features. The launch of One Laptop Per Child (OLPC) project by MIT company hit global headlines which conveyed a mixture of administration and derision as well as many criticism from various market players and competitors. The OLPC project received criticisms in the initial stages with many arguing that Negroponte’s $ 100 laptop project could not be built with the mere fact that such an extreme drop in price was impossible while others such as Intel chairman Craig Barrett dismissing it as a “$100 gadget”. Though, the project received many controversies MIT Company was determined to introduce the project with an appeal that many individuals all over the world could do one laptop per child. The tremendous efforts of MIT company as well as Negroponte to sensitize schools, governments, non governmental organizations and individual donors on the benefits of One Laptop Per Child project especially in developing countries lead to immense support from various organizations such as macro devices, Google, Red Hat and New Corp. Moreover, the project gained much support and in 2006 it received $ 29 million with more other parties pledging additional funds as well as technical expertise for the future. Despite the project receiving much criticism as well as facing fierce challenges from other competitors in the market such as Intel, Microsoft among others OLPC project has over the years worked hard to sell its concepts to the world’s educational ministries. Why did Negroponte do what he did? Why was this necessary? Negroponte launched the One Laptop Per Child project after seeing the power of laptops firsthand at a rural village school that he and his wife first established in Cambodia. In this small village Children used rugged Panasonic Toughbook laptops which were equipped with Wi-Fi internet capability via a satellite link. Through the use of Toughbook laptops, a village that had no books eventually had access to Google as well as the internet in general. The use of laptops as well as internet changed the lives of many people in several was hence improving the self esteem and empowerment as well as fulfilling the passion for learning. The laptops made the school more popular and drew appreciation from all the parents as well as the village with no electricity. The use of Toughbook laptops in Cambodia by children made the small village more powerful as well as brighter. After having a thorough evaluation of the current situation as far as the small village was concerned, this visit prompted the idea of designing a basic laptop model which would link people in the developing countries to the world. With these ideas Negroponte decided to launch the $100 Laptop which was meant to provide an opportunity for each child to own and use a laptop in the developing countries both at home and in class. The OLPC project implemented by Negroponte was necessary especially in this era of information technology since the project could provide an opportunity for students in primarily schools as well as in other educational institutions especially in developing countries to own and use laptops both in class as well as at home. In addition, One Laptop Per Child Project (OLPC) was necessary since it was going to provided an opportunity for students to share their learning experience outside classroom .This is because the laptops were more portable hence they could be taken home giving the students an opportunity to share with family and friends about their individual educational needs. Moreover, the design of $ 100 laptops was going to be designed in a manner that the machines were going to be loaded with electronic versions of individual school books and encyclopedias making the process of learning easier to the students in terms of resource accessibility. This project was necessary given the fact that it was seen as a light of reality in darkness as many students could not actually access computers given the mere fact that some of them only survived only on one dollar per day while others less than a dollar. Furthermore, most people in poor countries spent a fortune of their money to purchase cheap products hence it was quiet evident that the poor countries would embrace the new technology in some ways even more easily than because they have not been socialized to anything else. Therefore, it was clear that they would accept the new technology rapidly since the $ 100 Laptops technology was useful. Despite the mere fact that the One Laptop Per Child project was deemed necessary by various organizations, governments and other Non-Profit organizations other parties were opposed to the whole idea of $100 Laptop hence argued that it had no importance. To begin with, some critics argued that Negroponte’s concept would require high speed fiber optic TI lines to run through the center of villages struggling with basic necessities hence it be hard for poor countries to afford the so called $ 100 Laptop. One of the three children lacked access to adequate shelter, one in five had no access to safe drinking water and one in seven had no access to health services. Although Negroponte saw notebook computers as an educational tool that might eventually alleviate world poverty, critics maintained that achieving such a goal would require far more than inexpensive computers. On other hand Negroponte’s the lead designer responded to this critics by arguing that the entire developing world was not a string of famine stricken villages rather there were different conditions in different places and there were a lot of places where kids are starving while kids want to learn other things. Furthermore, supporters of this $ 100 Laptop initiative seconded this observation warning against the erroneous assumption that technology was something that only wealthy nations could afford and that the poorer nations were better of concentrating on more basic challenges such as providing health and clean water hence the $100 Laptop was a waste of time and resources especially in developing poor countries. According to the experience in the United States the idea of technology serving as catalyst for education was not new. This because before the OLPC project other programs had already been invented which enabled students to use laptops in class as well as at home such as One to one school programs in Australia which provided each student with a computer. In addition, laptops boosted students test scores only in circumstances where the teachers teaching the students have prior computer knowledge as well as have been trained to use the machines in their teaching plans. Individuals criticized the concept of One Laptop Per Child arguing that most of the teachers in poor countries did not have prior knowledge on the use of computers hence it be useless for a student to own a laptop yet her or his teacher doesn’t know how to use it. Marketing challenges and non-marketing confronting OLPC Marketing is a significant aspect of any business in today’s hence it contributes immensely to the success of the organization. Moreover, production and distribution depend largely on marketing (Baker,(2007,pp.23-30). In marketing when a company introduces a new product it is always necessary that the company put in place various promotional and advertising tools to inform the customer’s of the new product in the market. In so doing the company may face challenges and stiff competition from already established firms. Moreover penetrating markets in which competitor rivals have already established their customer base may be hard when it comes to gaining market growth in such markets even if the product is a little bit cheap than that of the competitors (Baker, & Saren,2010,pp.45). Since the concept of One Laptop Per Child project was new in the market, OLPC did not have a strong customer base hence there was need for the company to establish a strong customer base by putting in place specific well structured product supply chains as well as manufacturing operations. Organizations tend to use various supply chains as way of ensuring that customers access the products more easily and conveniently when they need them (Pauline, 2009,34-45). For an organization or company to succeed in gaining market growth as well as good customer base it is always important that the company establishes various supply chains with traders, individuals, retailers among other players in the market. Through them the customer’s can easily access the products as well as they play a significant role in product promotions which in turn creates a positive attitude towards the product from the customers. One Laptop Per Child project was a new concept in the market, it was starting from scratch hence the company did have any supply chains that would assist OLPC in gaining high market growth. Since OLPC Company did not have well established supply chains as far as the new product was concerned it faced a stiff competitor challenge especially from established technology firms which had already well established supply chains and manufacturing operations around the world. The concept of $ 100 Laptops hit the media news globally which attracted interest of various individuals as well as customer’s. Dealing with the media posed a great challenge as far as marketing of $ 100 Laptops was concerned. Each and every step of creating $ 100 Laptops by MIT was followed closely by the media in the consumer electronics press and every design misstep was reported which led to an uncommonly public R& D period. Dealing with the media was a challenge for MIT which had a strong influence on the OLPC’s diverse and demanding client base. Media advertising is a product promotional tool which tends to create both a positive and negative consumer attitude towards a certain product. In some cases the media may negatively create a negative impression about the product in the consumers mind especially if the consumers are allowed to participate through giving their own individual ideas and opinions as far as the product is concerned. Dealing with a larger consumer base was a great challenge for MIT as it required OLPC project volunteers and staff to constantly relay information to the consumers. From the case Negroponte was required to constantly relay feedback from governments around the world trading through the emails about the design which was rather demanding. Meeting consumer requirements and specifications is one of the challenges that each and every organization face especially if the product is still new in the market. Customer’s who were interested in purchasing the $ 100 Laptops had specific requirements for their Laptops. This posed a challenge for MIT in meeting consumer requirements as it required MIT to manufacture the machines according to the specified customer’s requirements which was an extra expense on the side of MIT Company. Selling $ 100 Laptops was not easy which posed another challenge for MIT. Despite the mere fact that OLPC machines cost price was less than half the normal price of an entry-level computer and weighted half as much with double the operating battery time as comparable to other laptops selling them was rather difficult. This was stipulated from the fact that OLPC had not gained a market for the new product as well as the consumers did not have sufficient information associated with the product. Lack of product may result to reduced sales hence in marketing it is always necessary that the when a company introduces a new product in the market it should carry out effective product promotion and advertising before releasing the products to the market. Since many governments did not have any information related to the $ 100 Laptops, some of them mere made false purchases without any deposits. For example in 2006 OLPC received purchase orders but no deposits for six million laptops at a price of $ 175 a piece from educational ministries of China, Brazil and other countries which consequently affected the plans of MIT company as well as One Laptop Per Child Project. Businesses usually exist in an environment which has both external and internal factors. Internal and external factors in one way or the other has a strong impact on the business hence it is always important that the business understands such factors as well as the threats and opportunities they create(Baker, & Saren,2010,pp.45).. Competition is a micro external factor which any business should deal with as any business has to have rivals except in situations of mono ploy companies. Computer industry is an oligopoly industry has it other players in dealing in personal computer as well as other kinds of laptops (Baker, & Saren, 2010, pp.45). Technology industry is very much competitive with large market players such as Microsoft, dell, Acer , Intel among others. OLPC project faced a fierce competition from already established firms as well as others who introduced new products almost related to OLPC project. OLPC project faced competition from India-based Encore Software whose “Mobilis” PC had attracted the interest of both the Indian government and the Brazil’s education ministry. Mobilis ran on Linux which was easy to use and featured regional Indian languages like Hindi, Kannada and Marathi. In 2006, Encore Software provided 40 evaluation units of the Brazilian government for inspection expecting feedback and possibly an initial order by February 2007. Furthermore, by late May 2007 Brazilian government was planning to order Classmate PCs instead of OLPC laptops while other countries such as Nigeria, Pakistan and Thailand were also weighing the market options. This at large affected the consumer market for OLPC since Brazilian government was one of the major consumers of $ 100 Laptops. Moreover, AMD another competitor was also developing its own low-cost laptop, the “personal internet communicator” a defacto which posed a stiff competition to OLPC’s product. This is because AMD had boldly announced that it could bring half of the world’s population online by 2015 with a device which was also affordable the way $ 100 Laptop’s were. Changing trends in the market was challenge OLPC encountered as the computer industry was changing more tremendously with new entrants entering the computer market. New entrants and incumbents such as Intel launched new products which were competitive too. Intel launched the $ 285 Classmate PC in May 2006 while in 2007 Dell launched a desktop computer in China at a retail price of $ 336, which was 60% lower than its previously cheapest offering. Entrance of new products in the market too posed a challenge for OLPC especially in the United States .For example September 2002, the state of Maine’s Department of Education launched the Maine Learning Technology Initiative, a program designed to give every seventh and eighth grade public school child and teacher an Apple iBook laptop. The program was built on the principle that educational transformation occurred through the use of technology by students and teachers on a one to one basis. Marketing the $ 100 Laptops in such institutions which had other alternatives was hard and some of them were not willing to purchase the $ 100 Laptops since they already had other kinds of laptops with almost characteristics as those of OLPC. Furthermore, in May 2006 Intel launched its own cheaper laptop named the Classmate PC which targeted developing nations. This to a greater level affected the expected sales revenue of OLPC.Technology and emerging markets was also another challenge which confronted OLPC. With the emerging markets in communication especially in developing countries with key mobile telecommunicator such as nokia, Motorola and Investcom introducing mobile phones which have internet, are durable, dust –resistant and had flashlights, a useful added feature for regions without electricity was a challenge too. Emerging markets of multifunctional mobile phone posed a challenge to $ 100 Laptops as some cell phones can be used as alternatives to laptops especially in poor countries where students are easily accessible to mobile phones than laptops. To compete more effectively with OLPC many a multifunctional phone developers entered the market developing multifunctional phones.To begin with, the first non marketing challenges that OLPC faced were design challenges. The designed $ 100 Laptop’s parameters of low-cost, lightweight and modern posed a great challenge for OLPC hence making the design process more difficult. This is because lightweight ultra-thin laptops were typically more expensive and harder to manufacture as in the case of $ 100 Laptop’s than heavier and bulkier models. Secondly, building the $ 100 Laptops was a great challenge for OLPC, since the machine required unique design which was actually different from other ordinary laptops hence making the entirely process more complex. From the case, it is evident that, OLPC was required to use OEMs to effectively build the machines according the specified parameters which made the entire machine building process very complex. Moreover, the final design process brought together more than 800 parts from multiple suppliers this posed a great challenge in dealing with the manufacturers as they were the toughest audience to deal. This is because it required OLPC to implement supplier communication protocols and process which could help to effectively deal with them which was another challenge given the mere fact that the product concept was still knew as MIT had not established the suppliers, this made the entire process more difficult and hard especially in selecting reliable suppliers. Assembling the components of the machine together posed another challenge for OLPC, given the fact that the machine components were made in different countries. The $100 Laptop components were designed from different countries as well as major design contributions which came from Hawaii, Argentina, Brazil, China, Italy, Israel and Taiwan. On the other hand the machine key user interface was designed in Milan while key parts of the operating systems were developed in Brazil. Though it against the rules of designing the machine the $ 100 Laptop developed was working better and faster than any other ordinary laptops. The other non- marketing challenge that OLPC encountered was related to production. The machines were supposed to be made by Quanta Computer Inc., the Taiwanese manufacturer which in 2006 made roughly a third of the world’s laptops. Quanta Computer Inc was a well known computer manufacturer who also in 2005 manufactured 18.4 million laptops for brands such as Dell, Hewlett-Packard, Lenovo Group and Acer hence Negroponte the OLPC per child project leader was quiet confident that it would manufacture the target one million laptops. One Laptop Per Child project posed a great challenge for Quanta computer Inc hence the manufacturer was reluctant to make a clear contract with OLPC. This is because the $ 100 Laptop project was considered a risky venture for Quanta since the project the was not going to make the normal unit margin as in the case of other machines .In addition, each machine was supposed to be designed in a manner that they are able to withstand heavy use as well as they can be interfaced in the country of destination language .Moreover Quanta Computer Inc was expected to test the prototypes by dropping them from various heights, exposing them to extreme heat and humidity, soiling them and pounding on keyboards. This entire process was rather challenging for Quanta Computer Inc which made it not make a contract with OLPC. Convincing Quanta computer Inc on the benefits of this investment and why the $ 100 Laptops were supposed to be designed in a specific way different from other ordinary laptops was not an easy process. This posed a great challenge for One Laptop Per Child project as far the machine production and manufacturing was concerned. Moreover, the $ 100 Laptops faced a great challenge in relation to the design of its operating systems. Given the mere fact that most of the children using the $ 100 Laptops would not have any ready access to electricity, power generation presented a major design hurdle. The MIT team explored both solar and windup mechanisms and had hoped to rely on a so called parasitic power or the ability to power the laptop simply by typing on keys. What has been done to overcome these challenges Internet marketing is promotional tool through which companies market their products via the internet. From the case as way of informing the consumers about the new product in the market thus $100 Laptops, Negroponte and his team to a larger extend used internet marketing. Over the years internet marketing has proved be an important tool for product promotion especially in case of new product. In this era of information technology many people access the internet hence many organizations to a larger extend are using the internet to market their own products through social sites such as facebook, twitter, LinkedIn, as well as through organizational websites. Since $ $100 Laptops were new in the market it was necessary for MIT to use various promotional tools to inform the customer’s of the new product in the market. Hence as way of establishing a strong customer base and gaining market growth over the other competitors such as Microsoft, Intel, Acer among others Negroponte and his team have established a website which provides extensive details on the laptop’s specifications and goals. Moreover, the website provides information to the customer’s on the latest developments as far as the OLPC project is concerned. The website which today has become a home for breakthrough ideas as well as searing skepticism has enabled MIT to market $ 100 Laptops extensively as well as gain a considerable market growth. The website designed is usually managed by MIT media lab staffers, suppliers and volunteers. To overcome the challenge posed by a larger consumer base, Negroponte used the internet comprehensively by sending immediate emails to the consumers. This was done to limit consumer complaints as well as meet the consumer specifications. Moreover, OLPC constantly adjusted the machines to meet customer specifications. Through this MIT was able to establish a strong relationship between the company and the consumers. In relation to the case Negroponte constantly adjusted the machines to meet the consumers’ specific requirements. From the case the Brazilians wanted a bigger display, which was done by Negroponte project as well as the Thais who wanted a taller touch tablet, big enough which would enable the kids to write on it in Tall Thai script more easily. This was done primarily to enhance a strong customer relationship with the company as create a positive consumer attitude by showing that OLPC project was flexible and consumer satisfaction was a priority for the company. Bringing the idea to national leaders was easy to some extend since Negroponte knew some of the leaders as well as they knew him too. It was easier for Negroponte to enter the market doors of great leaders than for other competitors such as Michael Dell or Steve Jobs, or Bill Gates even though they are more famous, richer and important. It was easier for Negroponte to enter such markets than the others since the project was not profit making as well as nothing was being sold. To deal with production and design challenges OLPC positioned all of its computer’s components behind the display, instead of putting them beneath the keyboard as in most traditional laptops such as Lenous ThinkPad. This configuration allowed the device to be folded into a flat e-book mode, it also lead to high production costs and simplified the wiring but made the machine somewhat top-heavy. The OLPC computers were made of green and white plastic with seven-inch screens that swiveled like tablet PCs. Power was provided by rotating the computer’s electricity-generating crank resulting in 40 minutes of power for each minute of turning. OLPC’s strategic options To overcome new competitors offering low cost machines, like Intel which introduced Classmate PC that was a teacher orientated, OLPC primarily had its focus on the students hence it was mainly student centered. Moreover, the $ 100 Laptops would run a range of programs including a Web browser, a word processor and an RSS reader that delivered Internet blog update. The OLPC machines were designed in a manner that they would be potentially the first computers that many children would ever experience since most of them sought to shield children from the limitations of Microsoft’s suite of software which gave OLPC a competitive edge over the other laptops. In addition, while typical laptops only tested to 35- 40 degrees which is unacceptable for children using laptops in hot climates as well as in direct sunlight and without air conditioning, the OLPC computer was tested to sustain 52 degrees during the day. To deal with cheaper options, OLPC designed the OLPC more differently. The $ 100 Laptops would come equipped with a completely new OS, organized around a journal instead of a legacy paradigm that only focused on storage folders. Students could then review their journals to see their work and retrieve files created or altered during each session. On other hand the folders system used by Windows forced users to remember where they stored their information rather than what they did with it. Initially students turning on XO- based computers would be greeted by a basic home screen with a stick-figure icon at the center surrounded by a white ring. Moreover, OLPC used price floating which enabled the company to maintain the features of the machines over its competitors. Negroponte maximized on sales, the $10 per unit margin for OLPC through which the project achieved a target of 100 million laptops sales. Difficulties associated with marketing the OLPC to governments Marketing the OLPC to the governments and educational ministries in various countries posed a great challenge as it was associated with several problems and difficulties. International marketing plays a fundamental role in marketing and mostly it’s described as the application of marketing principles to more than one country. International marketing therefore in most cases involves a firm establishing firms in other countries rather their own domestic countries. Though, international marketing may help a business to expand its business as well as gain high market growth it has challenges associated with it in terms of legal, political, norms and values, microeconomic laws among other factors (Onkvisit& Shaw,2008,pp.45-53). One Laptop Per Child project being a new concept especially to the developing countries, OLPC encountered challenges to market the entire concept to them as well as to other developed countries. More consumer behaviour plays a fundamental role in marketing so creating a negative impression through negative information about a product from other competitor tends to create a negative attitude towards that particular product. Marketing the $ 100 Laptop concept was difficult since the criticisms that the project received from other competitors and other individuals painted a negative attitude in poor especially in poor developing countries with most of the countries taking it as an extra expense as well as a waste of money that could be used to provide other necessities such as food, shelter, clothing and clean drinking water. In addition, with major differences in legal governmental policies, protocols and processes convincing various governments and ministries in various countries on the benefits associated with OLPC project was hard. Given the fact that different governments have different protocols related to educational ministries it was hard for OLPC marketers to successful make negotiations with particular governments and their ministries as some of them were not willing to adjust their budgets. Different governmental bureaucracies required OLPC to lobby with various officials in governments and ministries of education through a certain structured system hence making the entire process of marketing $ 100 Laptop to such countries more difficult since the negotiation process was hectic and involving. Convincing the governments and individual donors how OLPC investment was a best concept which should be embraced by each and everyone all over the world was not an easy task. This is because most of the governments and individual donors expected to buy individual laptops for children to own as well as the associated server equipment to be kept in schools which was contrary to the entire Negroponte concept of One Laptop Per Child (OLPC) project which was meant to enable poor students especially from developing countries have access to atleast one laptop which he or she could carry home to share knowledge and experience with his or her family members and friends. In other cases some governments gave false starts to OLPC about purchasing their $ 100 Laptops .This was seen with the Indian government which had originally expressed interest in the $ 100 Laptop but later backed out opting to put its resources towards traditional methods of education. This posed a great challenge for Negroponte OLPC project as far as governmental commitment to the project was concerned and their willingness to support the project by purchasing the $ 100 laptops. Marketing this project to the government of United States received objection due to the fact that some school systems were opting to drop the laptops after using them for seven years with arguments that use of laptops in the classroom by students had no impact on their education achievements as well as success. Moreover, the teachers argued that there was a strong one-on –one relationship between the students and the laptop hence it serves as a distraction to the educational process rather than as a tool of achieving student educational success. Recommendations In order for the company to gain a high market growth it is necessary that other promotional tool such as marketing collaterals, pamphlets, billboards, televisions among others be used. Moreover, the company should put in place structured systems which will enable it have a direct access with the customer’s. More marketing strategies should be implemented in terms of dealing with competitors given the fact that computer industry is more competitive. References Baker, M., J (2007). Marketing: managerial foundations. Publisher: Palgrave Macmillan Australia, pp.23-30 Baker, M J & Saren, M (2010). Marketing Theory: A Student Text. Publisher: SAGE Publications Ltd,pp:45 Pauline, M (2009). The SAGE handbook of marketing theory. Publisher: SAGE Publications Ltd, pp.34-45 Onkvisit, S & Shaw, J (2008). International marketing: strategy and theory.5th ed. Chicago: Taylor & Francis, pp.45-53   Read More