...Ttools case study The goal of this analysis is to understand the opportunity and challenges ttools faces and advise them on the best approach to go forward. Ttools has created a unique all –in-one stylus for PDAs which also functions as regular ink pen. They have a successful utility patent and are facing a few challenges in patent infringement, marketing & distribution. Ttools has to decide whether they should compete, negotiate or litigate against Palm/IDEO for their product. To choose the best option going forward, we will look at the each of the options in depth and analyse the potential impact on the outcome. Competing against Palm Currently ttools uses Palm’s distribution channels (InSync online) to target potential customers. Competing against them would require ttools to aggressively spend resources on marketing and distribution channels that currently don’t exist. As the case mentions, the total cost of manufacturing a single unit costs approximately $2 with a mark-up of $9.95, the extra resources would drive the profit margins much lower. With a lower profit margin and lack of resources to scale the market, Palm would certainly out size ttools in pricing and marketing/distribution with an abundance of resources and large market share. Negotiate with Palm To continue using Palm as their primary distribution platform, ttools would effectively nullify their patent to reach an agreement. InSync platform reaches 50,000 of Palm’s customers, total potential revenue for...
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...ttools (A) Case Write-up Summary: Hazzard invented a pen/stylus device, used for PDAs, which was a pioneer in the market. After the failure of trying to license his design to a manufacturer of pens, Hazzard and his wife Leigh founded ttools company to assemble and sell the pen by themselves in early 1998. Hazzards self-financed a utility patent application for their pen/stylus device before the device was launched. Prior to writing a business plan, the Hazzards’ patent attorney drafted a nondisclosure specifically for the meeting with Palm Pilot, who owned the largest PDA market share in 1998. Palm thought the pen would be a great accessory for the Palm Pilot and invited Hazzard to advertise through Palm email ad system. With the utility patent and marketing strategy, ttools got huge success once the pen/stylus was known by customers through email. In October 1998, Hazzard learned that Palm had contracted IDEO to develop next-generation Palm PDA and a pen/stylus device similar to ttools’. On June, 1999, the USPTO issued ttools, but the attribute of 3Com was not negotiable, they would not give up the product because of the patent issue. Recommendation: I would like to recommend the third path. Firstly, the IDEO’s design clearly infringed on ttools’ patent, there was no risk to fail on course. When it comes to business risks for ttools, I think Hazzard should not be too pessimistic, ttools was on the right side, and this would be a litigation between a startup and a big corporation...
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