The Flight of the Kittyhawk - Case Study Example

Hewlett-Packard: The Flight of the Kittyhawk Introduction: Focus of this report is to perform case analysis on ‘Hewlett-Packard: The Flight of the Kittyhawk.’ Some recent years back HP launched its smallest disk drive in market. But launch of HPs disk drive was not successful due to some reasons. Report clearly describes about reason why this innovation was not successful and various reasons for this, by using various strategic approaches. There were some uncertainties at the time of launching. Report will explain what those uncertainties are. SWOT analysis has been included in this report in order to understand the various factors affecting the success of this project. Report also includes what kind of disruptive factors this innovation made in the disk drive industry and why HP was unable to succeed with the launch of this product. Final segment of this report includes some thoughts and suggestions on how HP can be successful in this project. About HP Kittyhawk: “In 1992 HP introduced the 1.3" Kittyhawk disk drive, the firstdisk drive of this form factor.” (Tom94022 para 2). It was Hewlett-Packard HP3013/3014 which was nicknamed as Kittyhawk. This was one of the smallest disk drives introduced by Hewlett-Packard Company. “It was an amazing little creature”, which offered storage space of 20 and 40 megabytes. (HP Kittyhawk 1.3” Microdrive para 1). The Hewlett model 3013 had capacity of 20MB and model 3014 can hold 40MB. Both of these models have got IDE interface. “IDE (Integrated Drive Electronics) is a standard electronic interface used between a computer motherboards data paths or bus and the computers disk storage devices.” (Definition-IDE (Integrated Drive Electronics) para 1). This innovation has got number of unique technologies, such as an accelerometer is built into it which will protect the hard drive when it falls. Manufacturer of this small hard drive claimed that if it falls from 3-foot nothing will happen to the disk and data contained in it. Despite all these characteristics, this product was a big market flop. In other words "The Kittyhawk was a spectacular failure." (One Inch No Clinch for IBM Storage Gurus para 13). It could not make any kind of impact or influence in the market. As a result of this, HP discontinued this product from market. Internal and external uncertainties: Many sorts of uncertainties prevailed during the launch of Kittyhawk project. These uncertainties could be termed as internal and external uncertainties. Internal uncertainties such as some sorts of management problems or issues happened during the launch of Kittyhawk project. Business model implemented by the management team was not so attractive and it was inefficient “to serve low-end new markets.” (Hewlett-Packard: The Flight of the Kittyhawk para 1). As a whole, it was an inappropriate strategy, management team followed throughout. Lack of thinking from management also reflects the failure of this project. Inappropriate strategy followed in cases such as implementation of Kittyhawk project from start to finish was made within twelve months. Accomplishment of break-even-time put by them was just thirty-six months. They put a target of achieving $100 million revenue rate within two years of their launch. They wanted to be first in making 1.3-inch drive and put into the market. The measures taken by the management team was not the best. These measures were not realistic for innovation of new product. External uncertainty includes the product failed to impress the market condition. This was a huge set back for the product. The reason for this was price for the product was high and so product failed to target the low end market. The price fixed for this product was not affordable for the clients. Their aim before launch of the product was to achieve the target very fast by making price somewhat high and concentrate only on high end market. Keeping these factors in mind HP launched the Kittyhawk project. SWOT Analysis: “The SWOT analysis provides information that is helpful in matching the firms resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.” (Strategic Management para 2). SWOT means strengths, weakness, opportunities and threats. SWOT analysis includes two types of analysis such as internal and external. Internal analysis includes strength and weakness which focuses Kittyhawk’s advantages and disadvantages in needs, which requires for target market. Strength refers to advantages of Kittyhawk which requires meeting the customer needs in target market. Weakness means Kittyhawk’s drawbacks in meeting the requirements needed for customer. Weakness should always measure from customer’s point of view. External analyses include opportunities and threats. “Opportunities refer to favorable conditions in the environment that could produce rewards for the organization if acted upon properly.” (Olsen para 13). A threat means barriers or any other conditions that prevent reaching the objective. Strength Weakness Brand name. One of the best in the industry. First company offering such smallest disk drive. Creative innovation. Unique one in the industry. Ineffective management team. Strategy implementation not best. Failed to study market condition. Lack of focus and distribution channel. Opportunities Threats Different innovation. No one tried. Product is more compact. Market uncertainty. Customer’s behavior. Technological change. Competitors. Before innovation of the product company’s management team didn’t have any of confusion whether the Kittyhawk project will be successful or not. Management team thinks being a reputed company; there is no need to worry about success of the product. Company people have full confidence in their product because it is one of the unique one in the industry. These strengths gave assurance that product will be a grant sensation. There are plenty of opportunities for this product to become popular in the market. Important point to highlight is it was a different innovation. No one tried this and it was HP bought this idea first. Still some of weakness put this product behind and made a big flop in the market. Main weakness to highlight is ineffective planning. Company aims to get return on investment very fast. So they labeled some price for the product. Company people didn’t aware that the price will be reasonable or not. As a consequence, company who was ready to buy the product in bulk order gone back. This shows companies failure in studying the markets and in implementation of strategy. Important threats are market uncertainty, customer’s behavior, technological change etc. The weakness and threats, which was analyzed in SWOT, played a significant role in failure of the Kittyhwak project. The main aim of innovation of Kittyhawk project was to become a storm or major player in the disk drive industry. For achieving this, HP needed to implement new innovative patterns that none of the companies tried. Thus, with a new ground-breaking design they made smallest disk drive which was of just 1.3 inches and also which was not larger than two postage stamps. It was Bruce Spenner’s idea behind this implementation. Disruptive Innovation: The introduction of Kittyhawk is being considered by the management sectors world wide as a disruptive advancement from the part of HP. The launch of HP Kittyhawk has been placed in the curriculum of management studies to illustrate the failure of a project just because of the acceptation of a disruptive innovation. However the firm is positioned at the heights in the manufacturing and marketing sector of contemporary world, the decisions taken prior to any launch always becomes significant. The identification of the target market and expected cost should be made based on the existing conditions as well while keeping a set of forthcoming hopeful market. “The HP Kittyhawk case allows students to explore in detail why it is so difficult for established firms to succeed at disruptive technologies.” (Hewlett-Packard: The Flight of the Kittyhawk para 1). The study of Kittyhawk reveals the fact that it succeeded only in developing a good project management group. Other aspects which were considered at the time of the design turned out to be disruptive. Without the real time assurance of the expected market they started the implementation of the set strategies accompanied by the support of the monetary source with least pessimistic probability expectation in future. A novel approach in the technological market was expected by HP while developing the project management group for the Kittyhawk. “Hewlett-Packard decided that, to grow more rapidly, it needed to design a revolutionary disk drive product that would create an entirely new market or application for magnetic recording technology.” (Christensen para 1). HP found radical magnetic recording equipment in the Kittyhawk launch which they expected to be a base for the swift approach to a success in the contemporary technological market. The Personal Digital Assistant (PDA) promotion was the main focus of the developmental team of HP Kittyhawk with which they expected a tremendous expansion prospective. PDAs were small portable computers and HP expected an innovation through such products as they prefer for smaller data storage devices of higher capacity. The Kittyhawk they were introducing was anticipated to conquer the storage section of PDAs, which turned out to be an utter failure confidence at the end. This innovation finally turned out to be troublesome and ended with utter failure of the product. “HP created a remarkable new technology, but its targeted market never blossomed.” (Hewlett-Packard: The Flight of the Kittyhawk para 3). The targeted PDAs could not accept the predicted price of Kittyhawk as their product could not increase its cost considerably to cope up with the rate claimed by HP. The introduction of Kittyhawk was identified as disruptive because the groups which they set as the possible consumers of their product did not accept it as expected by the project launchers. Even the expense could not be achieved back through the sale of Kittyhawk by HP. The inability to collect even the expense from the sale of the product implies the loss of the firm and the failure in the launch. The disruptive innovation at the later stages sought for the other pavements as well but they utterly failed as their virtual concepts about the target market and the expected success remained as mere expectations. Various reasons for the failure have been defined clearly with the actual proof of it. Those reasons will explain the management students on the failure prone activities. Reasons for the failure: The main reason identified for the failure is the failure in setting the right target. “Whether a new technology is sustaining or disruptive is often a strategic variable rather than something inherent in the technology itself.” (Hewlett-Packard: The Flight of the Kittyhawk para 4). The success and failure of an innovation is depicted in the strategic factors kept during the project management processes. It has no link with the technology used in the product. HP developed the product with a target cost of $250 for a single disk. Nintendo was the firm who was ready to buy the disk in bulk, but was expecting the price to be $49.95 which was far below the estimated price by HP. “Believing they had identified the winning strategy, its managers spent their budget on a product design and the manufacturing capacity for a market application that never emerged.” (Christensen 155). The expenses made by the managers were based on pure virtual goal that turned out to be a flop at the later stages. The combination of different claims of the product took place with the resources left vacant and thus resulted in the utter failure of the project launch. They failed in recovering the spent amount over the product as well as in marketing it. The latest introduction of the hard disk drives by HP gave explanation on the failure of Kittyhawk as “one of the key reasons that Kittyhawk did not succeed as hoped was that it targeted an emerging market and our predictions about customers’ needs in that market turned out to be incorrect.” (Audet 2). The analysis cites that the failure was merely a part of the strategic fault. Thoughts and Suggestions: The suggestions in the matter of failure of Kittyhawk were the managers should have been more practical in the matter of expecting the target market for the product. The goals set were independent of the current situation of the market which was a wrong step in the area of strategic planning and identification of the market. If they managed with controlling the expense while designing and manufacturing, they would have never ended up with zero economic resource. “When the ultimate applications for the tiny drive ultimately began to coalesce, the Kittyhawk team had no resources left to pursue them.” (Lazonick 258). Only after the introduction of the product to the market, they identified that the cost of their product in the market will never exceed $49.95 where they were expecting a cost of $250. This shows that their expectations were not worth up to their product. This suggests the fact of the requirement for a proper strategic utilization plan. They just spent their sources with a vague destination without assured market. They were trying to conquer the hopeful scope of a new technology at a far away future with no assurance of its occurrence. This illustrates their seeking of fortune in the imagination with eyes blinded off. The managers at least should have thought of a negative chance as well. When a plan is being made, one should be optimist to a great extent along with a small pessimism in it. If they had a small pessimism that the product may fail, they would never have spent in such a method of approach. Conclusion: The investigation on “Hewlett-Packard: The Flight of the Kittyhawk” helps a management student to examine the possibilities of the failure of a marketed product as well as the flaws that led to it. The inefficiency of the managers is being demonstrated in the case which remains as the negative examples for unsuccessful managers. The pessimistic requirement of an optimistic confident manager is seen while studying the case, illustrating how the project fails with pure hopes of the future market. The contemporary world always keeps suspense for future, so should trust the present and wait with fifty-fifty hopes. Works Cited Audet, Ross, et al. Hewlett-Packard: The Flight of the Kittyhawk (A). Web. 4 Dec. 2009. . Christensen, Clayton M. Hewlett-Packard: The Flight of the Kittyhawk (A). Harvard Business Publishing. 26 Jan. 2006. Web. 4 Dec. 2009. . Christensen, Clayton M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Press, 1997. Print. Definition-IDE (Integrated Drive Electronics). Search Storage.com. 2009.Web. 4 Dec. 2009. . Hewlett-Packard: The Flight of the Kittyhawk: Case Presentation. 17 Mar. 2008. Web. 4 Dec. 2009. . Hewlett-Packard: The Flight of the Kittyhawk. Doc Stoc: Find and Share Professional Documents. 2009. Web. 4 Dec. 2009. < http://www.docstoc.com/docs/3796584/Hewlett-Packard-The-Flight-of-the-Kittyhawk>. HP Kittyhawk 1.3” Microdrive: HP Kittyhawk Hard Drive. Web. 4 Dec. 2009. . Lazonick, William. American Corporate Economy: Critical Perspectives on Business and Management, Volume 4. Taylor & Francis, 2002. print. Olsen, Erica. Internal and External Analysis: SWOT Analysis. My Strategic Plan. 3 Dec. 2008. Web. 4 Dec. 2009. . One Inch No Clinch for IBM Storage Gurus. Digital Photography Review, DPreview.com. 2009. Web. 4 Dec. 2009. < http://www.dpreview.com/news/article_print.asp?date=9907&article=99070802microdrive_bg>. Strategic Management: SWOT Analysis. Quick MBA: Knowledge to Power Your Business. 2007. Web. 4 Dec. 2009. . Tom94022. HP Kittyhawk. CHM HDD Events. 17 Feb. 2008. Web. 11 Dec. 2009. . Read More