The case is about a business project between IDEO, one of the world’s biggest product development firms, and Handspring, a newly formed PDA manufacturer. In order to attract a big volume of customers, Handspring requested for a product which can be ready for holiday season and is offered at a competitively low price. However, this appeared as a problem to IDEO as the time and price pressure may force the company to give up its legendary operating manners. In order to be a competitive player, any company must possess strategic core competencies in its business model.
It can be easily seen that production development process, comprised of prototyping and brainstorming methodologies, is the unique skill which differentiates IDEO from other development firms. However, if IDEO is to satisfy its client’s goal, the company may have to forgo implementing its competitive advantages: •Firstly, a time constraint in designing product would require IDEO to bypass many of its early development stages that the firm was particularly good at. It took 2 years for IDEO to complete the Palm V.
Thus, with only 10 months of product development, the company end up deliver a product which could not meet the expectation of quality and functionality. •Secondly, crucial to IDEO’s designing process is its “enlightened trials and errors”. All team members were familiar with the principle “fail often to succeed sooner” where limitless ideas and prototypes were generated in order to find the best solution possible. However, with Hawkins’ proposal of the “tried and true” technology, IDEO may have to sacrifice its long lived culture. Thirdly, the Handspring project also required Boyle’s team to keep secret of the Visor project. However, free communication had been a signature practice in IDEO’s core competency. Designers were often encouraged to talk to one another to exchange ideas and facilitate brainstorming sessions. Giving in to Hawkins’ requirement, IDEO may discourage its team members and reduce communication efficiency. Letting go of core competencies may bring about short term and long term damages to IDEO.
In the short term, the company may fail to differentiate itself from other competitors and lose its market share. In the long term, it would be difficult for them to sustain a strong position in the market as it can no longer implement value-creating strategies. In my opinion, the best alternative for IDEO is to confine to the prior deadline of Spring 2000 and not to compromise on innovation and design because IDEO is known for its innovation, simplicity and creativity in product development.