Purdue University Segway Case Analysis - It is assumed that NPIs by established

Description

The paper should answer these seven points below and summarize them on 1-2 pages only. Use the question/answer format.

1- Essence of the Case

What is the gist of the case?

2- Theoretical framework

What theory/theories apply?

3- Key issues identified

What are the key issues identified from the narrative?

4- Analysis

The analysis is breaking up the components and putting all of them back together.

5- Alternative solutions

Multiple solutions need to be provided that are alternatives.

6- Recommended solution with logic

7- Summary of the case

 

Segway Case

 

1.            Concept: New Product Introductions

It is assumed that NPIs by established corporations will be carefully planned, emerge from a clear corporate strategy, and improve the bottom line. That’s not always the case.

There’s a chance our new CEO has hit on exactly what his company needs. If you have students whose Capstone strategy is to be a differentiator with a high-tech focus, or they’re using a product lifecycle model, then the CEO’s idea might work. But what if the team is already part way through the R&D cycle for a new High End product? What if the company has abandoned differentiated products to produce commodity products? Would they have the R&D competence to launch in the High End? The scenario gives each team a chance to argue the case, for or against, depending on their current circumstances.

Context: Who will buy this and at what price? The sinking of the Segway.

When Dean Kamen, award-winning engineer, inventor and businessman, said he was working on a new product that would replace the automobile, the hype was extraordinary. A year or so later the Segway was launched, a self-balancing, two-wheeled personal transportation device forecast to sell 1,000 units a week post launch – about half a million a year. Venture capitalist John Doerr said the Segway might reach a billion dollars in sales as fast as any product in history. According to Forbes, the Segway sold 30,000 units over the next six years.

While he was designing the product, Kamen said “the city needs a car like a fish needs a bicycle”. But the Segway demonstrated that while cities may not need cars, human beings – the customers who were required to buy the Segway – think they do.

In 2009, Time magazine voted Segway one of the Ten Biggest Tech Failures of the decade. There were many problems with the product:

•             At between $3,000 and $7,000 it competed with second-hand cars that offer protection from the weather and other vehicles.

•             Many city and state jurisdictions would not allow the Segway on public roads for safety reasons.

•             While a Segway operates both indoors and outdoors, you can’t take it upstairs and, at 100 pounds, it’s difficult to manage if you are not riding it.

•             It was too expensive – and too passive – to replace the bicycle, and too exposed to replace the car.

The Segway has found a purpose with fleet users who need to spend many hours on their feet: airport staff, police patrols, warehouse workers and tourist operations. As a product that was meant to replace the car, however, it was a total flop.

Commentators agreed the technology was brilliant – completely High End – but there was no market for it. As the HBR article Why Most Product Launches Fail says:

“Hearing opposing opinions can be painful—but not as painful as launching a product that’s not right for the market or has no market at all.” This might be good advice for our teams preparing their reports for Tom Harkness.