vha Twent

wrong?
The Singing Machine: How Success Can Breed Failure its
Machine in trouble. Rather than helping it liquidate
Many entrepreneurs learn the hard way to be leery of quick
was
moved to the
the retailers it contracted with
on

success. If a firm's products catch on quickly,

the ability to inventory,
and than $30 million in karaoke
next "hot" item more
execute properly becomes doubly important. Success is Machine's warehouses.
machines ended up in The Singing
fun-but if it comes too quickly, it's easy to get caught up in his company entered into
the euphoria and start making careless
decisions. That is Reflecting on the agreements that
Christmas season,
a maker of in its haste to get sales during the 2002
exactly what happened to The Singing Machine, Y. P. Chan, the company's new CEO, said,
"f's a classic
karaoke machines. ...One needs to be
karaoke business school case ot growing pains.
The Singing Machine started out making business deal
machines for professional singers, a relatively
small market. disciplined enough to walk away from a
which doesn't make sense."
products w e r e made in China, s o it had
a
The company's Quick success-every entrepreneur's dream-can
tairly small statt and amodest overhead. Ihen the company
had some good luck-karaoke caught on. Soon, it started rapidly erode into failure if a business becomes overly
its machines through Circuit City and Best Buy, optimistic about its products or services and starts chasing
selling deals that don't make sense. Execution intelligence is as
and looked a s
it though the sky
was the limit. In fact,
in the good times as it is in the tough times.
Business Neek named The Singing Machine the
number one important
hot growth company tor 2002, Questions for Critical Thinking
what
good, right? Wait till you read
All of this sounds
1. As we've said in this chapter, execution intelligence is
happened. Expecting continued growth, The Singing critical to entrepreneurial success. How did execution fall
Machine loaded up on karaoke machines for the 2002
short for The Singing Machine? What would you have
Christmas season, geting as many machines as possible on done differently to execute properly to ensure the early
retailers' shelves. But the big retailers were savvy, and SUCcess of this entrepreneurial venture?
protected their own selfinterests, despite the popularily of
karaoke machines. For example, one retailer demanded that 2. The Singing Machine's experiences suggest that the
The Singing Machine place their machines on its shelves on external (business) environment affects a venture's
What could The Singing Machine have to
ait consignment basis. It wouldn't actually ifbuy machines,
the success. done
would affect its
would only display and sell them, and they sold, great! anticipate how the external environment
business? Do you think The Singing Machine is unusual
it not, The Signing Machine would have to take them back.
Another retailer demanded that The Singing Machine in its failure to caretully study and understand the etect
provide it a guaranteed gross profit margin, essentially of the external environment on its operations?
shielding itself from any risk.
"

the Blues,
As it turned out,
the karaoke craze waned in late 2002. Source: J. Bailey, "Success Has Karaoke Maker Singing
And, ater the Christmas season was over, and The Wall Street Journal, July 29, 2003, B7.
Singing
man h..