“Making SMal Big: SMaL Camera Technologies” is an innovative product that made s
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Question
“Making SMal Big: SMaL Camera Technologies” is an innovative product that made significant profits in the first year but then quickly was attacked by competitors. The evolution and technology of the product in detail. It ends with five different options for technological and business strategy, along with pros and cons of each strategy.
During the period of Carlyle's ownership, SMaL Camera Technologies, Inc. was a developer of CMOS imaging sensors and camera modules. In February 2005, the company was acquired by Cypress Semiconductor (Carlyle.com, n.d.). SMaL Camera Technologies has a turbulent technological aspect; the management made some bad decisions that caused in falling revenues due to lack of product marketing. Their marketing abilities were not correctly built, and instead, they decided against in-house manufacturing and distribution. Startups must be managed very differently, and their management has to make meaningful choices in the first few years of operation that determines the firm’s direction. Though startups are at a disadvantage (resources, visibility, and age) when it comes to commercializing a disruptive technology, they also have significant advantages over critical and stronger firms, who rarely go disruptive and prefer market-pull strategies. They can maintain low visibility till they have all the resources, manufacturing and distribution facilities in place, then hit the market; first entering a niche market making fewer profits and then going mainstream.
-The dream of annual revenues past $100 million can dilute its research-oriented approach to a market-oriented approach. The organization was focusing more energies and resources on branding and promotion without building their marketing capabilities. The commercialization and launch of the product were not well executed. The competitors jumped in before the company could start consolidating making revenues. The options offered by competitors had many new add-ons though was not as slim and small as the SMal, the technology was superior regarding having better picture quality, flash, etc.
-The SMal camera units were easily copied as many new competitors quickly entered the segment within one year of its launch in the market. SMal could not efficiently commercialize their product also due to lack of marketing capabilities. They were also late in giving the facilities which the competitors added to their products as the competitors had the advantage of copying, improving and adding innovations. The second year could not generate the same revenues as the customers’ demands changed and the company could not adapt fast enough due to lack of workforce and resources.
-Going to the CES show was a wrong decision as it got the competitors on a high alert and they immediately starting developing similar products. The option of maintaining low visibility while they had consolidated their resources of manufacturing and distribution should have been followed. They should have done the market launch with full preparation and proper market research.
-The strategy of having an external marketing setup did not go in favor of SMal camera as it was not good for their brand image. Further, the SMal had lost touch with the customer who wanted better facilities like a flash and better quality of the picture which was not possible with the current credit card size camera. There go to market approach lacked the facility to get customer, competitor and market feedback. The time lag to innovate and adapt was slow due to lack of input and resources.
-The idea of having only external manufacturing facility again created a negative for the organization as it was dependent on a third party for its supplies, the technology became vulnerable and accessible to the competitors, the external manufacturer cannot innovative and has time lags so new ideas could not be executed immediately.
Exploring the Limits of the Technology S-Curve, Architectural Technologies:
QUESTION
a. At what point on the S-curve is the architectural development of the SMaL camera at the time the article was written?
b. What strategy should be pursued to make this architectural technology successful?
Explanation / Answer
a. Basically there are 4 phases on a S Curve:
At the time this article was written, SMal camera was at the initial stage i.e. the ferment stage on the S-Curve. It had been in the market for just 2 years and still competing for a market hold. Competitors were acting fiercely over the company.
b.SMal camera needed to work on its R&D to create a sustainable edge over its competitors. In this article, the product of the company seems to get easily copied by the competitors. They need to work on their product and create a niche for itself. Also, the marketing strategies can be put on hold until a competitive edge is established.
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