Team Fastsoft

Kittyhawk Case
What would you rate as the strengths and weaknesses of the way HP structured and supported the Kittyhawk Development team? Kittyhawks development team was well supported by HP in most of the conventional criteria. The team was able to benefit greatly from HPs corporate culture of decentralized development and emphasis on innovation which gave development teams a lot of freedom to pursue more ambitious projects. The team was led by Rick Seymour who had a reputation of being a manager who was more of a risk taker and visionary than one who just focused on the numbers. Seymour was able to get the Kittyhawk project approved as a high priority project, which meant the team was given a lot of decision making power and freedom to think outside the box. Because of the high priority status given to the Kittyhawk project, the development team was able to recruit basically any engineer that they wanted for the project and make many high level decisions on their own. Thus, the way HP supported the development team made it possible for the team to move quickly and decisively in developing the product and go at a 12 month development cycle pace instead of the typical 18 month pace. The team was also physically isolated from other HP DMD divisions which gave them further independence from the traditional product development process. The support Kittyhawk received from HP made the project appealing to many of the top engineers because they could innovate and move at the speed of a startup while still enjoying the funding of a large successful company. Thus, the development team was able to recruit all of the top experts at HP and there was no shortage of talented manpower. HP supported the team with lots of money taken from the revenue of other DMD product lines so the Kittyhawk development team did not have to worry about receiving adequate funding to achieve their engineering objectives1. The main weakness in the HP structure came from the fact that a largely engineering and development team was given a wide range of responsibilities. The development team was tasked with not only developing the product, but also developing the market in which this product could be sold. To make matters worse, this was a completely new and revolutionary product whose goal was to dominate a market which did not even exist yet. The development team was even tasked with cultivating a customer base for the product. HP supported Kittyhawk as if a market was already readily available. Because of the ease in which the development team was able to obtain manpower and financial resources, the Kittyhawk development team never had to work hard to answer hard questions and truly sell their idea to top management. The way the team was supported and structured encouraged the type of risky forward planning based on the idea that if they build it, people will buy it. Essentially, the support the development team received caused them to never really have to question the notion that the product could create its own market. The result of this was too much optimism which led to little time and effort being spent on developing a viable

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backup plan. In structuring the operation in a way such that the development of the market was left to the well supported development team, HP introduced a fatal conflict of interested into the system that ultimately led to an excellent but costly product being developed for a market that wasnt there1.
What do you think of the way the team set out to find a market for the Kittyhawk? What correct turns and wrong turns did they make? Although the marketing team for Kittyhawk did find possible markets for the Kittyhawk, their market research was rather insufficient, and in a sense, biased. First of all, Spenners belief in Hackborns favorite maxim, Never take a fortified hill, is not entirely wrong, but the team made a mistake in ignoring the fortified hills of the desktop and notebook computer market. It is hard to gain a competitive advantage by entering an already existing well-established market because the competitors within the market are too strong to attack directly. By attacking the entirely new market of PDAs, the company can easily succeed as a leading business with an innovative idea and proper marketing. However, at the same time the Kittyhawks marketing team was taking an immense risk by depending too much on the unproven, new PDA market, while completely ignoring the proven, existing market. If the team had at least considered the existing market with a big picture in mind, it might have found a suitable market that is already proven. Secondly, the team was too absorbed in its own optimistic view to be able to get a realistic picture of how the future market would be. The fact that they wrote a 3-page strategy document for such a huge project that ordinarily requires a 20-page strategy illustrates how wildly optimistic the team was. Communicating mostly with potential customers such as PDA developers, the team did not bother to consider interviewing the critics of PDA market. Since the PDA developers themselves believed in their own products success, the team easily got a misleading idea that PDAs were indeed the next-big-thing and the PDA market will emerge and succeed in the near future. Thus, the team overlooked other important limiting factors of PDAs development, such as a lack of other critical components of PDA, such as hardwriting recognition software. As a result, the PDA market never emerged as quickly as the team thought because the other technologies that PDAs depended on were not developed soon enough. In addition, depending on the market research

firm that was not very reliable, the team became more predisposed to developing premature optimism for their future market. White once commented about the unreliability of the market research firm, The research firm ended up talking to us more than anyone else. Naturally, they came to believe what we believed. What are the root causes of failure of the Kittyhawk program? Show by an Ishikawa diagram.

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What should HP have done in hindsight? It was evident by the end of the development project that a few things did not go HPs way. However, there were a few things that HP could have done to minimize this damage. We believe that the biggest failure of the Kittyhawk development team was the decision to pursue only two potential markets: the mobile computing market and the inexpensive drive market. By narrowing down the possible directions, HP was relying heavily on the fact that one of these markets would take off quickly to realize their initial goals. Unfortunately, the decision to go with the mobile computing market backfired, as that never materialized into anything significant. According to the case, almost every PDA manufacturer had very bad sales and many decided to retreat1. There may have not been any obvious signs that the PDA market would fail, but HP should have sensed this and tried to go after a different market. By committing themselves to a failing market, the Kittyhawk was destined to fail as well. In hindsight, the Kittyhawk development team should have not committed to this market, and either began with the inexpensive market or tried to find other markets. From Exhibit 7, we see that products such as Japanese Word Processors, Digital Cameras, and Cash Registers were significant contributors to production1. Thus, if the Kittyhawk team initially kept a more open mind about the potential markets, then they would have been able to avoid the PDA market failure. In addition, we see that even after the initial failure of the product, the inexpensive market still existed. The Nintendo executive as well as a fax machine manufacturer were still interested in a storage device for under $50. This being said, the Kittyhawk team could have alternatively focused on this market initially, trying to find the breakthrough that would allow their product to be sold at this low price, which was the biggest factor in their passing on this route initially. By going this direction, HP would probably still not reach its main goals, but they would not have ended up failure like what actually happened. In addition to looking at different markets, the fact that Seymour initially discounted the threat from the 1.8 inch disk may have contributed to the Kittyhawks downfall1. Because the Kittyhawk was skipping a generation to reach its 1.3 inch model, they were under the pressure to design and manufacture it before the 1.8 inch model came out. The other technologies that required a disk drive may not have been ready for the 1.3 inch model, as was the case with HPs Corvallis Division. They decided that the 1.3 inch device didnt have enough storage capacity. We can also see that the 1.8 inch drive market is still going strong in the present, as even as recently as 2007 Samsung was still improving upon the memory capacity of the 1.8 inch disk drive up to 160 GB2. This format is also the hard disk drive that the Apple iPod uses, which is currently a huge market3. Thus, if HP knew all of this information, they probably would have elected to not skip over the 1.8 inch drive and develop that size drive. Even though they would not be the first one in the 1.8 inch market, the

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future success of this size would have eventually been good enough to prevent a failure such as Kittyhawk.

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References
1. Christensen, Clayton M. Hewlett Packard: Flight of the Kittyhawk. Harvard Business School. Revised 23 Oct 2006. 2. Rothman, Wilson. Samsung Achieves 160GB 1.8 Hard Disk Drive, Beats Only Self. Gizmodo. 21 Aug 2007. Accessed 2 May 2009. <http://gizmodo.com/gadgets/harddrivin./samsung-achieves-160gb-18-hard-disk-drive-beats-only-self-291659.php> 3. Lev-Ram, Michael. Want the biggest iPod in the world? CNNMoney Small Business. 1 May 2009. Accessed 2 May 2009. <http://money.cnn.com/2009/04/30/smallbusiness/bling_your_ipod.fsb/?postversion=2 009050106>

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Project Update
At this time, we have contacted many important people regarding our project. First of all, we have an interview scheduled with David Baltimore. Although he does not do research on Stem Cells, he will be able to point us in the right direction. He is also very knowledgeable about the development cycle of biologically related products, so he can give advice on the possible development cycle of Stem Cell Therapy. Second, we have an interview with Dr. Martin Pera at USC. He is the director of the Broad Center for Regenerative Medicine and Stem Cell Research there. He is an expert in the field, and we hope to be able to get some insight into stem cells from him. We have also been in contact with Dr. Utpal Banerjee at UCLA. He also does research on stem cells, and will provide simply another opinion. Other important contacts include Dr. David Anderson here at Caltech. He is a founder of the Caltech startup StemCells Inc., and is one of the most important links to the corporate world. We have also been pursuing Dr. Marie Csete, who is the Chief Scientific Officer of the California Institute of Regenerative Medicine and is in charge of funding. Other contacts include Dr. Alan Trounson, President of CIRM, Dr. Woo Suk Hwang, who started a company involving stem cells, and other companies including Geron Corporation and NeuroGeneration. The most important part of this project is to do research on the potential development cycle of Stem Cell Therapy. As you know, the development cycle of biological related products can be upwards of 10-15 years. Because Stem Cells are still in its infancy, we will attempt to do secondary and primary research on the potential development cycle. Currently, we are in the basic research stage. In about 2 years, we will be in the preclinical research stage, and 3 years after that we may be in the clinical research stage. The clinical research stage may take more than 5 years, and only then will Stem Cells be widely available. The applications of stem cells are also in its infancy. Currently, Adult Stem Cells have many more applications than Embryonic Stem Cells, including blood, immune, and metabolic disorders all in the clinical stage. Experimental applications in the preclinical stage and potential applications in the basic research stage also exist. Based on all of this, we wish to figure out the hype v. the reality of the potential therapy as well as what forces drive its development. Currently, we believe that the forces at work include money, politics, other available treatments, peoples expectations, social/ethical issues, and other intangibles. We may find more forces, or we may deem that a particular one is not legitimate. In either case, primary and secondary research are key in these findings. Thus, moving forward, we will conduct the currently scheduled interviews, as well as scheduling many more especially with companies that are in the field. Hopefully the contacts that we have will be able to point us to other experts in the field that will be able to help us more. Additionally, we must do some interviews with opponents or skeptics of Stem Cell Therapy. These may be in the form of other scientists, politicians, or religious leaders in order to ascertain the political, ethical, and social forces that may be constraining development. Finally, more secondary research must be done to supplement the primary research that we are doing.