Transfer of Resources to Another Program
One of Intecolor Corp's products was being 'outflanked by overwhelming
competitors'. The Exec. VP wanted to get a group consensus among his managers to
'cut bait and limit our losses'. He says that, "Because of Business Insight
we stopped spending resources on a product that did not have a high probability
Joe Romasco is the Executive vice president of a $20,000,000 manufacturer of
industrial monitors and workstations. When asked why he purchased Business Insight
he says, "We probably would have hired a consultant if we knew one who was
well versed in our market niche. There weren't any we trusted. Business Insight
seemed to have the breadth of analyses needed."
In 1983, when the PC appeared, we recognized that survival was a virtue. Our
proprietary, unique color graphic terminals were clearly going to be replaced by
open architecture products and systems. The key was to survive, maintain
profitability and convert to a viable product in the markets we knew. Because of
limited R&D dollars we had to anticipate what technologies would be big enough to
give some growth, but not big enough to attract big company competitors.
About five years ago we chose the X-terminal product space as an ideal segment.
We defined a product that would provide X-terminal functionality with full server
capability and began development. Unfortunately we underestimated development time
and by two years ago, HP, DEC and IBM began to release similar products. The
whole organization had a blind spot and refused to accept the fact that although
our intentions were noble we were being outflanked by overwhelming competitors.
The challenge in a small company was to get group consensus to 'cut bait and limit
our losses.' This is when I introduced Business Insight to the process.
To facilitate the data collection process I gathered the Product Manager, VP
of R&D, the two lead development engineers and the director of sales together and
we jointly answered the Business Insight questions. The product showed that while
we wanted initially to be the 'price leader', by the time we began to ship we were
the 'high priced' provider and then we had to assure profitability so our price
strategy had to be 'skimming'. It became clear that our competitors would and
subsequently did absorb losses by discounting products with new technology to
build market share.
Using Business Insight, we went through three iterations with slightly
different and gradually less plausible assumptions until it became the group
consensus that we should drop the product. The resulting benefits were;
We stopped spending resources on a product that did not have a high
probability of success.
We made the decision as a group with minimal hurt
We focused our R&D on one of the offshoots of the project that had
a much better future... a very high performance industrial monitor. This product
has been very successful.
Finally, we have become aware as a team of a common set of analyses
tools and terminology that continues to communicate better on new
When asked, why should others use Business Insight?, Romasco said, "For
all of the above reasons. It is amazingly general, but easily customizable to
almost any product."