Beyond the Borders
- Beyond the Borders
- Strategic issues presented in the case
- Marketing analysis
- Combination of outsourcing and in-sourcing
- Research and development issues
- Risk of in-sourcing
- Win-win partnership
- Corporate control
- Long-term implications
- Employees' morale and brand reputation
- 'Hot group' advantage
- Implications of outsourcing R&D for middle managers
Lars Inman needs to turn RLK Media around in twelve months. With no marketable product on the table, his only option is to get their new iVid gadget in the market. He is faced with the decision whether to in-source or contract out its software development. This paper explores the different strategies available to the company and the various issues associated with these strategies as well as their implications to middle management.
Nothing exemplifies globalization more than the way most businesses create their products. Today, we can have a device designed in the United States with software created in India, a hardware made in China and the final product assembled in Taiwan. It is no longer enough to be the best in the land, today companies are playing in a much bigger field-the world. The RLK Media case presents a company torn between its core competency and the allure of contracting out.
According to Premji, the ?company's survival depends on the success of a single product that it doesn't have the expertise to develop? (Nohria, Huston, Brown, Hagel III, Lipman-Blumen, & Premji, 2005, p. 28). Lars Inman views the iVid as a make or break strategy. They have to produce it one way or the other. The only question is, should the management bring people in or should they bring the development out? This paper explores the strategic decisions RLK management needs to resolve and the different strategies proposed by some experts as well as the management issues and their implications to the management.
The case presents several strategic decisions the management need to contend with. These issues include outsourcing, in-sourcing, innovation, marketing analysis and Premji's proposed collaboration method.
[...] As the chief scientist, Kelner is afraid to loss control of the design his team had labored for. The team had been used to doing everything themselves that the idea of letting another firm take over their design is threatening. Long-term implications Although Inova claims to be open for collaboration, their experience with Pycosonics show that there are limits as to the kind of intrusion they consent to. The firm values its ?autonomy? as much as RLK Media and they would make sure that collaboration remains within specified boundaries. [...]
[...] Managers need to have a clear understanding of the nature, extent and consequences of outsourcing to the company in order to enlighten their people and prevent wrong insinuations that might lead to deeper problems. Contracting out research and development would expose the company to another firm. Middle managers had to ensure smooth transition of new roles expected from the workers. They need to help the people change their mindsets and look at the bigger picture. Outsourcing also implies that middle managers need to collaborate with their new partner firms and ensure that the conditions of their contract are met. [...]
[...] Innovation RLK management and the experts who analyzed the case all agree that the core competency of the firm is innovation. RLK Media's strength lies in pioneering some of the best electronic products in the market. The company prides itself of having the most creative and hard-working engineers. The company's atmosphere stimulates ingenuity and diligence. Their latest invention, the iVid is a new technology with the potential to be the next hottest gadget in the electronics industry. In a highly competitive and fickle industry, being the first to deliver is always an advantage. [...]