Hewlett-Packard: The Flight of The Kittyhawk

Hewlett-Packard:

The flight of the Kittyhawk

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Individual Case Analysis #1

Introduction

In the early nineties, the electronics instrument market was booming, especially the disk drives market that became an extremly valuable opportunity for the technological companies. Although, Hewlett-Packard Disk Memory Division was facing a strong competition with IBM and Seagate, the division has already a profitable position in the established market. The success of the company was based on their high performance drives, which have more capacity than the industry norm. Even though HP was likely to introduce one and two gigabytes drives, they decided to become a major player in the disk-drive industry with the Kittyhawk project. The disk drive was the smallest never seen on the market, it was 1.3-inch with a good resistance to impact and high performance.

Critical decisions from the management team

On a management team approach, the company took the right initiatives by creating an autonomous group separate from the rest of the division, Spenner gained rapidly the full support of its senior executives and he chose the best employees from the DMD division to work on the innovation project.

However, they did not respect the DMD priorities to develop a one and two gigabytes drives to stay competitive on the established market. Indeed, the development of the Kittyhawk has weakened the other division. It could be a risky decision to change the priorities because in case of failure of the Kittyhawk project, the all DMD division could be affected, and they may lose the great position in the established market and may lose the opportunity to go ahead of their main competitors.

Inadequate project charters

One of the big mistakes from the company was to set the goals and milestones of the project charter as if the new product was likely to be a huge success since its introduction in the established market. It is very risky to ask for such high profitable expectations during a short period of 36 months, when you do not even know how your final product will look like. According to these tight deadlines and high financial expectations, the company should address this product to higher hand customers to be more profitable. Moreover, the project parameters has been built in a way to respond to the initial creed that all engineers signed, “I am going to build a small, dumb, cheap disk drive”. However, the short deadlines and high revenues expectations forced the team to scarify the performance of the product that directly increased the cost of the Kittyhawk.

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