Case Study 1 Hewlett Packard – Kittyhawk Project

Case Study Assignment #1

Read and write an analysis of Case II-9, “Hewlett-Packard: The Flight of the Kittyhawk” from the textbook. Select one partner to work with and prepare an analysis of the case. In your analysis, include answers to the following questions:
a. What would you rate as the strengths and weaknesses of the way Hewlett Packard structured and supported the Kittyhawk development team?
b. What do you think of the way the team set out to find a market for the Kittyhawk?
c. What correct turns and what wrong turns did they make?
d. What do you think are the root causes of the failure of the Kittyhawk program?
e. Is there any way HP could have avoided its fate by addressing these root causes?

In June 1992, Hewlett-Packard (referred to HP hereafter) introduced smallest hard disk drive in the world named as the Kittyhawk. It was the first ever commercially produced hard drive in a 1.3 inch form factor.
The idea was conceptualized in early 1991 by HP’s management when it was eagerly trying to explore strategies for transforming their Disk Memory Division (DMD) as a market leader. Kittyhawk project team was led by Rick Seymour under the supervision of Bruce Spenner. From the inception of Kittyhawk, Spenner had been keen that the new technologies that had an enormous potential to cause new-market disruptions. He intended to create a disk drive feasible with any product that had microprocessor.
Kittyhawk offered a smaller, light weight and highly reliable solution for customers as the trade-off for reduced performance. But believing they had a chance to enter new markets, HP channelized their organization efforts on these new technologies. Some people from top management of HP got involved, creating separate, financially autonomous divisions and providing limitless access to necessary resources for the Kittyhawk to ensure that the technological breakthroughs would be developed and commercialized.

Strengths of project:
The Team -
Kittyhawk development team enjoyed the meticulous attention and priority of top management HP.
Apart from the financial and functional autonomy their ability to procure best employees from other divisions (even from the other high priority projects such next generation 2Gb project) shows the importance being accorded to this project by the top management of HP.
Technology-
Kittyhawk three unique technologies to be developed for its implementation. The intellectual property generated would benefitted HP in the future had it been successful.
Encashing Brand Name for Marketing-
Kittyhawk though perceived as internal startup had HP’s brand-name to venture into the market. This reduces the efforts by significant amount
No competition because First in the market-
Early launch had its benefit of having no completion in the market providing the product. This would have given HP an advantage time of atleast 18 months in the market to capture the customer base.
Low Debt-
Since the funding of the project was channelized from the profit of another division. The risk of debt was internal thus giving more flexibility.

The weakness:
Team Dynamics-
The Kittyhawk team did not comprised of people who had prior experience of developing new architecture. It only boasted of people who were risk-takers and were willing to take up challenging tasks.
Seymor, the head of Kittyhawk project, was an R&D section manager for DMD with a manufacturing background. He had no prior experience of developing a new architecture. He was selected as the role because of his reputation for quick thinking and action.
Similarly the marketing manager of Kittyhawk, Jeff white had joined HP only a few years back and was enjoyed a similar reputation.
Given the manner in which the team was formed that enthusiasm and risk-taking was given higher priority than experience and knowledge.
Market estimation-
It is commendable for the team to have delivered the product within the set deadline. But due to the lack of experience they were a bit overoptimistic of the prospects of such a drive. They did not anticipate the changing market scenario and the dependence of the success of their product on the success of PDA devices.
Lack of Talent retention-
A case where two employees returned back to their departement owing to refuseal for signing the creed ‘I am going to build a small dumb, cheap disk drive!’ portrays lack of professional and mature decision.
No ‘Plan B’-
The team did not had a backup plan and almost zero scope of customizing the product according to the needs and demands of different customers. This is evident from the fact that even the second generation of Kittyhawk (nearly 40 MB) could not accommodate the Windows OS. The team did not have fail-safe plan to compensate the unanticipated.

Ans 2.
HP had seemingly chalked out two methods for conducting the market study:
Analysis potential customer Requirements:
The team ignored the very important caveat the marketing manager of Nintendo told them. He asked them that they were looking for cheap storage but the team in order to fulfil their financial target ignored the very basic caveat. They decided to build a storage device for mobile and computing devices and then gradually work towards reducing its cost.
At the end of two years of launch they found themselves facing the same question as to whether they should be going for a $50 hard disk or leverage the advantages of Kittyhawk to improve their 2.5’’ drives.
Third-Party Market Research firm Opinion:
HP consulted an independent third-party market research firm to gauge the magnitude and other possibilities of the Kittyhawk project

Ans 3
The autonomous and convenient access to necessary resources helped the team garner a product before the conventional time.
Envisioning the future and developing absolutely new technology to support it such as overcoming the dataloss in case the disk falls from a certain height. The team went wrong on several counts:
The targeted a market that itself was trying to find a ground. There were no major players in the PDA segment and to design a product based on the requirements of a not so well established company in a not so well established segment spells doom for the product at the very start.
Lack of in-house management consulting.
Low compatibility with the non-HP products

Ans 4 . The design of kittyhawk project failed due to the following reasons:
Technical reasons:
1. The design was decided upon after consulting several possible customers. However, the final design boasted of features from all the customers but didn’t server the purpose of any one.
2. The peripheral devices that were envisioned to support Kittyhawk were still in their inchoate stage. In other words that market was not yet established to implement Kittyhawk at a large scale.
3. The team initially assumed that the competition in 2.5 inch market was too strong to be attacked directly and thus they leapfrogged to 1.3’ design.

Business:
1. The very intent behind developing a 1.3’ hard disk was wrong. The DMD wanted a product that could make them the market leader and bring them huge revenues. This goes against the very grain of any Business.
2. The team got it wrong when they decided to make a storage devices for mobile and computing devices and planned to get the price within the $50 barrier through economies of scale at a later stage. They did this because it suited their target of achieving a net revenue of $100 million in 2 fiscal years.

Ans 5.
HP could have gone with the idea of a $50 drive from the very start. The basic customer requirement as mentioned by the marketing manager of Nintendo was that they were looking for cheap storage
Further, HP could have introduced different versions of disk drive products.
Example: HP could have sold the shock-proof disk drives to Dayton Electronics Corporations and/or other package delivery companies. And selling non-shockproof to Fax machine companies, Nintendo, etc
Making the product highly compatible with the non-HP products.
Use in-house manufacturing for flexibility of scaling and establishing the market as demand grows.
Further, incorporating Kittyhawk in upcoming HP product line while supplying to OEMs until the right product is developed