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Kittyhawk

In: Business and Management

Submitted By ellrimbo
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Question 1. How successful is HP’s disk drive business (DMD) at the start of the case (1990-1991)? How important is the disc drive business to HP? Is it getting more important or less important?

The DMD business is not a successful unit in the eyes of Hewlett Packard, which prides itself on being the market leader for every product it enters. The revenue for this department, at the time of the case had been declining year over year, from a high of $533 million in 1989 to $280 million. The business is not important to HP revenue-wise, as it is a niche player in a very crowded field. On the other hand, the unit does allow for some level of halo effect as the leader in high-capacity, fast access drives which are used for high end engineering workstations and network servers. The unit provided high profits for the division.

The division is getting more important, at least from the case readings, as the company wishes to gain traction in the Hard Drive market, where competitors have 10x more revenue. HP was looking at the unit’s profitability and technical expertise that would allow it to compete with Seagate and IBM, wondering why “don’t we have 20% market share.” The organization believed in innovation fueling growth, as it was able to do with RISC based processors in the UNIX market while other companies preferred the status quo.
Despite overall rising corporate and DMD revenues, DMD represented a decreasing percentage of HP sales (see linear trend line). [please note that DMD and corporate sales are scaled logarithmically , and the % DMD/Corporate is depicted on its own linear scale]

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Question 2. The Kittyhawk drive turned out to be a commercial failure. Never-the-less, HP did many things right in its planning and development. List and discuss what HP did right with Kittyhawk.

HP did a number of things correctly in its planning and

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