Advent Corporation

| Group 1 |
Management of Technology and Innovation

Anto Abraham
Arpit Rastogi
Ritesh Jain
Sandeep Tripathy

073
077
112
114

Shalina Bhatia
Arun Ravindran
Suman Kumar Saha

119
138
245

Shikha Gupta
Suja Barua
Suseendran
Vishal Gagrai

300
306
308
316

Advent Corp
Founded by Henry Kloss in 1967 for manufacturing specialized
electronic products
Motto was to make the most efficient piece of equipment at the
lowest price to the customer
Initial objective was to create and market a large screen TV
system
Suspended development of the TV system and switched to hifidelity audio products due to shortage of capital
Group 1

Management of Technology and Innovation

IIM Kozhikode

Advent Corp
By 1970, Advent sold five products for home
entertainment use
Advent Loudspeaker
Advent Frequency Balance Control
Advent Noise Reduction Unit
Advent Tape Deck Model
Advocate Crolyn Tape

Licensed technology from Dolby Systems and

Du Pont
Group 1

Management of Technology and Innovation

IIM Kozhikode

Henry Kloss
Respected figure in consumer electronic
product design
Keen on strong financial control and
micromanagement of processes
President of KLH for 10 years and the driving
force behind their high quality products
Constantly worked on and refined the design
of the TV system

Group 1

Management of Technology and Innovation

IIM Kozhikode

Enactment (Modes of Experience)

Substance

External
Technology
Sourcing

Internal
Technology
Sourcing

Product
Development

Process
Development

Technical
Support

Competitive
Stance

Leader

Leader

Strong

Strong

N.A.

Value Chain
Stance

Broad

Narrow

High

Continuous
Optimization

N.A.

Resource
Commitment
Stance

High

Potential to
expand

High

High

Moderate

Strong

Innovative

Optimization

Management
Stance

Group 1

Strong,
Centralized

Management of Technology and Innovation

IIM Kozhikode

WHAT ARE THE KEY ELEMENTS IN ADVENT'S

STRATEGY? HOW SUCCESSFUL HAS ADVENT BEEN?
WHY?

Group 1

Management of Technology and Innovation

IIM Kozhikode

Broad

Differentiation

Cost Focus

Differentiation Focus

Cost

Differentiation

Scope

Cost Leadership

Narrow

What are the key elements in Advent's strategy?

Source of Competitive Advantage

Group 1

Management of Technology and Innovation

IIM Kozhikode

What are the key elements in Advent's strategy?

Blue Ocean Strategy
Advent focused on specialized area of audio market
Targeted the low competitive sector
Indulge in research directed at invention
Use existing inventions, usually off-the-shelf
Need seekers
Identified latent needs and opportunities for innovation
No market research
Brand Equity
Didnt believe in patent protection
Gain market share through brand equity

Group 1

Management of Technology and Innovation

IIM Kozhikode

How successful has Advent been? Why?

Recorded a net profit of $30,000 in the month of September,
1970 which was mainly contributed due to the launch of
M200
M200 was first of its kind and there werent any competitors

Audio Loudspeaker was one of the industrys best sellers

Best quality in medium price category

Response from nation-wide distribution and exposure

through trade press had been overwhelmingly favorable
Carefully chosen 150 dealers handled distribution of Advent products
across the country

Not many products in the pipeline

Absence of idea generation team
Group 1

Management of Technology and Innovation

IIM Kozhikode

What are Advent's distinct technological

competencies? Please construct a matrix showing
the technological competencies embodied in the
different segments of the audio business.

Group 1

Management of Technology and Innovation

IIM Kozhikode

Advents Technological Competencies

Ability to aggregate existing components in response to a
perceived customer need/product trend Architectural
Innovation
Ability to leverage knowledge and sensitivity to
Market trends, customer preferences
Technological progress, off-the-shelf products availability

Ability to use knowledge across complementary products

e.g audio players and noise cancelling devices

Simplification of design and production

Group 1

Management of Technology and Innovation

IIM Kozhikode

Technological competencies embodied in the different

segments of the audio business

End product loudspeaker, Tape deck (M 200)

Product differentiation through innovation
Identification of latent customer needs

Intermediate product (noise reduction units,

Crolyn tape)
Identification of existing issues and needs
Standardization of components
Simplification of design and production
Group 1

Management of Technology and Innovation

IIM Kozhikode

How is this different for the video business?

Competencies for video
business
More focus on end
customer in video as no
intermediate products
Scope for improvement in
technical know-how
optics, CRTs and display
technologies
Better trained sales force

Group 1

A means of finishing
mirrors at a very low
cost to support image
projection

Access to screen
technology which was
owned by Kodak

Research to develop
new ways of
prolonging the life of
the cathode ray tube

Indirect resources
such as building space,
raw materials, tools
and investment capital

Management of Technology and Innovation

IIM Kozhikode

What are the key issues and problems facing

Advent? Please prepare a detailed action plan.

Group 1

Management of Technology and Innovation

IIM Kozhikode

Issues/Challenges - External factors

No significant
economies of scale
existed in the industry
Success of large screen
TVs depended on
recorders capabilities to
reproduce quality
content

Group 1

Outsource
manufacturing and sales
to achieve economies of
scope
Complementary
products
Hence, collaborate with
recorder developers
And involve them from
initial phase of product
development i.e. idea
generation

Management of Technology and Innovation

IIM Kozhikode

Issues/Challenges - Strategic decisions

Operational Strategy
Decision to make or buy receiver
units
Distribution and marketing strategy
Dependency on dealer network to
sell the products
Difficulty in selling products with
sophisticated innovations
Uncertainty about distribution of
video products through audio
dealers

Absence of advertising and

promotional strategy

Group 1

Cost benefit analysis for

make/buy decision
Develop own sales force for
new products and outsource
sales for established products
Reduce uncertainty
Focus on core-competency i.e.
new product development

In-store displays, demo by own

sales force

Management of Technology and Innovation

IIM Kozhikode

Issues/Challenges - Future outlook

How to increase sales
while maintaining
specialized and
protected market niche

Collaboration on profit
sharing model
Relinquish control over
non-core competencies

Form ideation team

Institutionalization of
innovation process

Group 1

Members with different

skills and backgrounds
Discuss ideas with
suppliers and partners to
check feasibility and to
make necessary
modifications

Management of Technology and Innovation

IIM Kozhikode

Characterize Kloss's style as a general manager.

Does he need to change? How?

Group 1

Management of Technology and Innovation

IIM Kozhikode

Kloss's managerial style

Equity control 75% equity shares
Active involvement with R&D team
Reliance on experience and intuition about product
sales
One-man army
Idea generation centralized in just one individual
Closely supervised production operations
Determined even the assembly steps and production rate

Group 1

Management of Technology and Innovation

IIM Kozhikode

Change
Change required
To make the organization self-sustainable, independent of his
association with the organization
How?
Delegate powers and responsibilities
Build a core executive team better decision making
Succession planning identify and nurture future top management
Form ideation team
Members with different skills and backgrounds
Discuss ideas with suppliers and partners to check feasibility and to
make necessary modifications

Build capabilities in concept testing

To better estimate sales potential of a product
Build organizational capabilities, rather than depending on individual
Group 1

Management of Technology and Innovation

IIM Kozhikode

Thank you

Group 1

Management of Technology and Innovation

IIM Kozhikode