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9/28/2011
Technological Innovation
Elio Engineering, Inc.
Robert A. Burgelman, Clayton M. Chrisensen, and Steven C. Wheelwright, Strategic Management of Technology and Innovation,, 5th eddition, McGraw Hill, ISBN 0073381543, 2009
Question 1
What is the Structure of the Automotive seat in 1998? How Attractive is it?
1
9/28/2011
Answer 1
Two tier 1 companies
– JCI and Lear
60% of the market
3rd place Manga
– 10% of the market
Mature industry with stagnant technology
Competition would be fierce with the 70% of the market controlled by three companies. New technology and cost reductions could help get a foothold.
Question 2
Describe Elio Engineering. What are the potential sources of competitive advantages? How sustainable are they? Why and why not?
2
9/28/2011
Answer 2
Describe Elio Engineering.
Elio Engineering was started by an individual who had an idea that could revolutionized the ABTS called “No Compromise seat”. No Manufacturing capabilities
– Including design for and testing
No capital to build-and-test. Relied on simulation software to provide proof of concept. Few employees with highly specific knowledge
Answer 2
What are the potential sources of competitive advantages?
The idea was well patented. Insider knowledge of the seating industry Not a supplier tied to one automotive company and market. The inventor was highly motivated and was able to find resources.
3
9/28/2011
Answer 2
How sustainable are they? Why and why not?
If Elio Engineering entered the market alone they would fail due to the lack of resources. The core value of this company is wrapped around one patent. They do not have the means to fully protect and produce the product by themselves which could lead to a larger company buying them out.
Answer 2 Seat Technology Comparison
Seat
Cost Seat Components/Mechanisms FrontSeat Seat Belt Advantages
Technological Innovation
Elio Engineering, Inc.
Robert A. Burgelman, Clayton M. Chrisensen, and Steven C. Wheelwright, Strategic Management of Technology and Innovation,, 5th eddition, McGraw Hill, ISBN 0073381543, 2009
Question 1
What is the Structure of the Automotive seat in 1998? How Attractive is it?
1
9/28/2011
Answer 1
Two tier 1 companies
– JCI and Lear
60% of the market
3rd place Manga
– 10% of the market
Mature industry with stagnant technology
Competition would be fierce with the 70% of the market controlled by three companies. New technology and cost reductions could help get a foothold.
Question 2
Describe Elio Engineering. What are the potential sources of competitive advantages? How sustainable are they? Why and why not?
2
9/28/2011
Answer 2
Describe Elio Engineering.
Elio Engineering was started by an individual who had an idea that could revolutionized the ABTS called “No Compromise seat”. No Manufacturing capabilities
– Including design for and testing
No capital to build-and-test. Relied on simulation software to provide proof of concept. Few employees with highly specific knowledge
Answer 2
What are the potential sources of competitive advantages?
The idea was well patented. Insider knowledge of the seating industry Not a supplier tied to one automotive company and market. The inventor was highly motivated and was able to find resources.
3
9/28/2011
Answer 2
How sustainable are they? Why and why not?
If Elio Engineering entered the market alone they would fail due to the lack of resources. The core value of this company is wrapped around one patent. They do not have the means to fully protect and produce the product by themselves which could lead to a larger company buying them out.
Answer 2 Seat Technology Comparison
Seat
Cost Seat Components/Mechanisms FrontSeat Seat Belt Advantages
References: [1] "Asset," http://en.wikipedia.org/wiki/Asset accessed 9/6 [2] John Reh, Earning Statement, http://management.about.com/cs/adminaccounting/g/earnsttatement.ht m [3] Earnings Per Share ‐ EPS http://www.investopedia.com/terms/e/eps.asp#axzz1XNvE3Ovb http://www.investopedia.com/terms/s/sga.asp#axzz1XNZsfosN http://www.investorwords.com/1719/EPS.html http://financial-dictionary.thefreedictionary.com/CLO 8