Group - 13

Q1. What would you rate as the strengths and weaknesses of the way Hewlett-Packard
structured and supported the Kittyhawk development team?

Strengths -

• HP keeps its individual business units tightly focussed, on key market segments with
good to excellent prospects. And if the markets seem to not yield the desired results,
HP minimizes its exposure so as to avoid additional risks.
• HP culture deeply valued technical innovation, HP even employed MBO to focus its
business on financials and its employees on potential paths of innovation.
• HP’s product line offered higher megabytes as compared to its competitors.
• HP’s commitment to the architecture made it leader in UNIX computing.
• Low weight & Low power consumption by “super” subnotebooks by the Corvallis
Division.

Weaknesses -

• The flash chip demanded $50 per megabyte, which seems almost 10 times more
expensive than the average disk.
• HP’s projects had a lot of visibility, and support but if the project (Kittyhawk) failed
it would result very badly.
• The company tried to target markets which were yet to be matured and hence failed.
• The company developed a product based on technology and innovation, but it wasn’t
really required, and was opposite to the needs of the customer segment.
• One of the biggest weaknesses of HP was failing to capitalize on opportunities.

Q2. What do you think of the way the team set out to find a market for the Kittyhawk?
What correct turns, and what wrong turns did they make?
Ans: There were many correct decisions and few incorrect decisions that the team made
while finding a market for the Kittyhawk.
Talking about the correct turns/decisions, they are as follows:

• They started off the correct way by researching about the electronics industry, followed
by various companies that might be interested in their new product
• They also went on to analyse company’s forthcoming product
• They visited the Consumer electronics show, which is considered to be a correct
place for such findings
• They identified Nintendo as a potential client, given the product offerings of the
company and their market size
• They talked to company employees as well, in order to understand, where the
electronics industry is expected to grow
Now if we talk about the incorrect decisions, they were as follows:

• The team ignored the desktop and notebook computer sections, which were well
established markets and could have been potential customers of Kittyhawk
• They made the mistake of deciding the goals for Kittyhawk before actually assessing the
market
• They decided a strict deadline of introducing the Kittyhawk within 12 months and
breaking even profits in 36 months
• In an effort to lower the price to satisfy the customers, they compromised on some of the
promised capabilities that were incorporated to set the product apart in the market
• HP was unable to sell Kittyhawk for less than $130, it was a clear indication that they
were unable to meet the initially finalised goal.

Q3. What do you think are the root causes of the failure of the Kittyhawk program? Is
there any way HP could have avoided its fate by addressing those root causes?

Ans: The new product of the company, Kittyhawk, was an exceptional innovation in the
industry however; the management of the organization could not achieve the target goals and
objectives of the company as the product failed to secure the desired market share in the target
market of the company. This was because of mainly three reasons and these reasons were
unable to find right customers, unable to identify the market needs and failure of the company
to capitalize the right opportunities that was present before them

Right customers:
The management of the company failed to identify and target the most feasible markets in the
industries based upon their requirements and results in terms of revenues and sales of the
company are complete reflection of this issue. We can see in the case they have tried to target
mobile and PDA industry which was very young and was not matured at that time but was
expected to blossom in near future. But PDA market never emerged as expected. So, banking
on this industry proved blunder for the company.

Need of the market:

The management of the company relied on the innovation and the technological breakthrough
that the organization could achieve and although it did achieve that however, the end product
that the organization came up with was not the need of the market and that it was opposite to
the actual needs of the major customer segment of the industry.

Most of the target customers wanted product to be cheap with price around 50$. But company
was more focussing on rigidness which was mainly responsible for increase in cost of
manufacturing. And due to this company had to sold product at higher price and was not able
to penetrate the market as expected.
Failed to capitalize on the opportunities:
This was also a major issue as we can see in the case, management of the company failed to
capitalize the opportunities that was present for them. This is because they only tried to focus
on the proposed target market. One of the opportunities that they were not able to capitalize
was of Nintendo company. This was very good opportunity as they shipped around 1.5 million
cartridges per day during Christmas.

These are some ways company was able to avoid its fate if it had addressed these root causes:
• Company would be flexible in its manufacturing and should not have used rigidness in
all of its product. Basically, it would have manufactured two types of products one is
rigid and other is cheap. After doing so it would definitely penetrate into the market.
Demand of cheap product was very high. Some companies that were demanding this
cheap product was Nintendo and fax machine manufacturers.
• They would have diversified their target customers. Basically, they were only focussed
on PDAs and mobile industry. If they have diversified their target customers then they
might have avoided this fate.

Q4. Provide another example of a product (by any Indian or global company) that had
a similar fate.
Ans: Microsoft Zune was a portable media player that was launched in competition to Apple
iPod in November 2006. Its advanced version Zune HD was launched in 2009 but due to very
less sales in the market, it was discontinued in 2011. The product was a masterpiece and some
of its major features are:
1. Zune have built-in radio and has user-replaceable battery and the batteries were widely
available in the markets.
2. Zune is relatively cheaper and are available in different amounts from 4gb to 120gb.
3. The UI of Zune is very interactive and songs can be downloaded from Wi-Fi as well as
you can sync it with the computer.
Why does Zune Failed
Zune failed because of following reasons:
1. Lack of Innovation
Although Zune has all the features that a portable media player should have at that time
but there was nothing unique features which can distinguish it from other players in the
market.
2. Insufficient Marketing
The marketing team failed to set the Zune distinguish from other existing products
especially Apply iPod. Apart from this, the marketing team was unable to create a hype
for the product in the market due to which the reach of the products was limited to few
audiences only.
3. Bad-Timing
Zune was launched in competition with Apple’s iPod but after five years which quite
too late. Apple iPod had already captured the music and MP3 market by then. Hence
the launch time was late which made Zune to struggle.