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.
“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 ends with five different options for technological and business strategy, along with pros and cons of each strategy. Regarding the “Making SMal Big: SMaL Camera Technologies” answer the following QUESTIONS
In Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy:
a. Does the kit sold to the OEMs have weak or tight appropriability? Explain on both a component and product basis.
b. Regarding each of the major components, which are in the prepardigmatic phase and which are in the paradigmatic phase?
c. Was the product itself in the prepardigmatic phase or in the paradigmatic phase?