The technology industry is a market of change, due to innovative breakthroughs. But for the firms in this sector, the challenge is to predict success. The disk drive industry provides some characteristics of how changes can cause certain types of firms to succeed or fail in choosing for instance a disruptive or a sustaining innovation.
HP was founded in 1939 by Bill Hewlett and Dave Packard. Their first product was an audio-oscillator, built in a Palo Alto garage. HP growth was driven by several innovations in high technology over so many decades. Today, HP is a leading global provider of computing and imaging solutions and services, which is focused on making technology and its benefits accessible to all. HP is still a company of inventors led by Carly Fiorina; Chairperson and CEO.
In 1992 Hewlett Packard had four major business organizations (Test and Measurement, Computer Systems, Measurement Systems and Computer Product). Among the different groups of the Computer Products organization, we could find the Mass Storage Product Group, which contained the Disk Memory Division (also called DMD), responsible for developing and launching disk drive models.
The Kittyhawk was a disk drive that HP designed to be the need of next-generation. In this study, we will try to answer the following question: how did an organization that appeared to do everything right eventually fail?
First, we will present the high-potential of the DMD and Kittyhawk project, through the disk-drive market, by characterizing the Kittyhawk innovation, and the HP way of management. Then, we will analyze the reasons for failure, defining sustaining and disruptive innovations and the market and strategic objectives that were taken. Finally, we will see how HP could have avoided this failure by suggesting some solutions.
[...] The target market In order to define their target, the Kittyhawk team members had to define high-potential areas of opportunity and threat. On the one hand, disruptive innovation markets are made of non- consumers or over served customers. This last kind of consumers are people complaining about overly complex product or customers refusing to pay premiums for previously valued innovations: they prefer low-end disruptive innovations that provide “good-enough” functionality at lower prices. The non-consumers are often locked out of a market because they lack special training or because consumption takes place in inconvenient settings: they prefer new market disruptive innovations that bring new benefits around convenience or customization. [...]
[...] The very top management of HP had supported the Kittyhawk team in every step of the project, facilitating any action or decision and putting at their disposal any resources they required. In order to implement a guideline for the way the team should work, literature on group development was created. This approach of the project on two levels gave the team a strong background to start the Kittyhawk adventure. II. The reasons for failure Although the Kittyhawk team was well-managed, the commercialization of the product ultimately failed. [...]
[...] Flexibility of a start up and resources of a big structure The team which had been dedicated to the Kittyhawk project combined the flexibility of a start up and resources of a big structure. Indeed, as the DMD culture was focused on getting higher capacity, the team had been separated from the rest of the division and was quickly considered as a priority project. This status gave the Kittyhawk team total autonomy to develop the drive, find new markets and cultivate a customer base. [...]
[...] The Kittyhawk wasn't able to meet either HP's Corvallis Division for their storage requirements; or Chicago's control requirements with the Kittyhawk II and its 43 MB of storage. Nonetheless, the Kittyhawk team found its real market which finally seemed to be divided in two groups: customers interested in Kittyhawk's ruggedness based upon its accelerometer technology (most prized attribute), customers who needed a cheap, simple drive priced at around $50. The Kittyhawk team got out of their laboratories and focused groups in order to create knowledge about new customers and applications; they made discovery- driven expeditions into the marketplace (Customers Electronic Show in Chicago). [...]
[...] It would have been possible to create a disruptive technology with the Kittyhawk and then chart its takeover of larger markets. In the first segment, the market entry point, they should have satisfied the fewest outcomes that were uniquely important to that small segment. For example, Nintendo had very few needs concerning this new product (capacity of storage and small price). At this point it was still a small part of the overall market and most customers were not yet interested in the product. [...]
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