Skullcandy Developing Extreme Headphones Innovation Is the Case Study

Excerpt from Case Study :

Skullcandy: Developing Extreme Headphones

Innovation is the only way a business can be sustained in the changing world of technology -- especially the entertainment business. The process of innovation and market testing and the final marketing will determine the success of not only the new innovation but also the entire business itself. Therefore utmost care must be taken in determining the demand, and the market need of the proposed innovation.

Purpose of paper: The purpose of this paper is to research and throw light on the way innovation is being attempted at Skull Candy and the ways and means it can be improved and also the pitfalls that ought to be avoided and the future of the latest innovation attempt.

Overview of paper: This paper will scrutinize Skullcandy's size and growth rate, and the new product sought to be developed and the development team competency, and the way the employees react and the way they are employed, and the motivation of members. Further the entire process would be discussed to see the improvements that can be made.

2. Body

a) What are some of the ways that Skullcandy's size and growth rate influence its development process?

One of the most important requirement for innovation is sustainability and this comes in two flavors, one the creation of the innovation along with the cost factor, and second the marketing and sustaining of the market which again involves cost and product recreation which again is a form of innovation. The problem thus is two fold. If the financial side and the recreation of the product and curing defects are ignored, the major problem becomes the innovation team and the way the new product is created. Because it involves a lot of personnel with different talent cooperating the capacities and volatility of the lab becomes important, and a research conducted by Acemoglu, Rogoff; Woodford (2006) showed that the important factor is that in firms staff vary in their capacities to form, adopt and move these innovations, so winners and losers emerge as inevitable by-products of economic progress. The advantage of finding a certain model may be the stopping of decline in volatility. Basically the average time between changes of the firm's manpower and the output ought to be a clear indicator of success. "Where it is inefficient, the common time to regulate will increase, since currently the firm has to do replacement hiring less usually. The job flows and high firm level volatility mirror the restructuring, experimentation and adjustment processes at the centre of Schumpeterian theories." (Acemoglu, Rogoff, Woodford, 2006)

b) How would you characterize Skullcandy's new product development team structure?

Skullcandy development teams also have the managers of industrial design, marketing, and product management, and the Mix Master Mike. The staffs are involved in several projects all at once. The staffs do not receive rewards but recognition. The management definition of the team would be that it is a 'light weight team because of the loose structure and the fact that they report to one person. It is a small independent team and being small is good because "large teams create more administrative costs and communication problems, and have higher potential for social loafing." (Datta, 2011)

The important aspect is the where there is diversity there is a better possibility of innovation with the team members coming from various perspectives. In the light weight model the team member are reporting to the manager, but they are not compelled to spend all their time on the project. There are liaison personnel who coordinate the progress and provide information and this model is suited for projects that are based on derivative projects. (Datta, 2011) This project of skull candy is a derivative project in the sense that it tries to recreate a gadget suited to a particular environment. There is evidence that such a team can produce the desired article, but the problem is if the mass production will bring about economies of scale that can help in sustaining the market. That is because the marketing team and the financial outlay are not included in the innovation process.

c) What are some of the ways that Skullcandy's size and growth rate influence its development process?

Firms that expand depend on the economic system and the investment opportunities that come. To this end they have to innovate on new products, "but the revenues and return to the investments are uncertain." (Riccabonia; Pammollib; Buldyrevd; Pontac; Stanley, 2008) It depends on the "size of business opportunities and the implication is that for a firm of size S. is expected to be riskier than the sum of S. firms of size" which means that where there can be constant returns to scale and independent business opportunities, there is a possibility of a great attendant risk. (Riccabonia; Pammollib; Buldyrevd; Pontac; Stanley, 2008) The growth rate is determined by the market size which in turn is determined by market demand. In the case of Skull Candy the choice of innovation may make or break a company. For example a headset for radio and TV jockeys may be a great idea. But will it bring about the revenue necessary for the projected growth is another question. For one reason that as it grows, it will depend more and more on collaboration with other manufacturers especially the Chinese firm that is being used to create the prototypes, and manufacture. These will in the long run cause a ripple cost effect such that the firm must continuously grow just to maintain the current status quo. Therefore the major question remains: is innovating for jockeys a great idea? And is it sustainable? That must be what the management must try to find an answer.

d) How would you characterize Skullcandy's new product development team structure?

Innovation may originate from individuals, groups, and importantly a network of innovators who specialize in various segments. (Melissa, 2008) In this case the innovators have various backgrounds and are experts in their fields. It is a team that can be classified as a hybrid of the lightweight and heavyweight typologies with the members having a clear functional affiliation and only work on any given project part time. This has rare advantages in the sense that the management can assemble at any time for a given project, the personnel with special skills and with enthusiasm without disruption to their normal work or personal lives. (Melissa, 2008) Thus the reward being recognition the personnel are expected to contribute more and there being no rigidity to the work schedule it is clear to see that the freedom given will bring about a better result than a system with rigorous work routine which may make the process monotonous.

e) What are the advantages and disadvantages of having Skullcandy employees serve on several project teams simultaneously?

The advantages are that the employee avoids the monotony and that helps him or her become more creative. Also because he or she works in another project it is possible that some ideas from the other work also percolates to the innovation. The disadvantage is that being at two places the employee may be pressured by two managers in two different roles that may be exacting and inefficiency may set in such that the projects are both affected. It may also create tension and the factor of expectation in the employee such that he or she may be discouraged if her efforts were not recognized in both the teams. Lastly the roles played in both the teams may differ and while this helps in bringing out multiple talents of the employee it may create a 'role play' atmosphere where there could be discontinuity in work.

f) What are the challenges associated with measuring and rewarding the performance of Skullcandy development team members?

The inner craving for recognition in every human being will prompt the member to contribute their best to the team. But recognition may mean different things to different people. It may be individual or may be based on peer opinion, what the family thinks of the achievement, and of course the answer to the question -- "what is in it there for me?' That would soon take over the euphoria of recognition. There must also be a small tangible reward in terms of some value- an increase in pay, or a better title at work, or some form of compensation that goes beyond recognition to keep the morale. Otherwise the system may work for one project but may backfire in the next one.

g) If you were advising the top management of Skullcandy about new product development processes, what recommendations would you make?

Over and above the suggestion about innovation I would doubt if innovating for Jockeys alone is the right thing. What was the financial prediction? How much is the market? How many jockeys are there and how many are allowed to hose the equipments? Has the planners addressed these questions? It is doubtful. These considerations actually bring about the success of the project. In this…

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