Failed product presentation -- Iridium

Group 5 Andres QuintanillaJianyu Yang

Xiaohui Zhong

September 2015

Outline

Product

Target Market

Key Failure Factors

Conclusion

Outline

Product

Target Market

Key Failure Factors

Conclusion

Product

Background The vision of Iridium was conceived in 1985

after the wife of Motorola Chief Engineer, Bary Bertiger, complained that she was unable to use her cell phone while vacationing in the Caribbean.

Bary Bertiger envisioned a technology that would allow effortless communication from and to any corner of the earth

Product

RECEIVER ANDRECEIVE ANTENNA

TRANSMITTER ANDTRANSMIT ANTENNA

SOLAR PANELS

ORIGINATINGGROUND STATION

DESTINATIONGROUND STATION

Figure1 ： Typical satellite communication architecture

Based on satellite communication technology Provide communication coverage for mobile phone users anywhere on the planet Be one of the first movers in the satellite

communication industry

Outline

Product

Target Market

Key Failure Factors

Conclusion

Target Market

Forestry

Aviation Construction

Disaster relief

Leisure travel

international business

executives

Satellite phones

Outline

Product

Target Market

Key Failure Factors

Conclusion

Iridium Historical Timeline

Source: Diane Stamp, Iridium Satellite – March 2005. Slide 2, Company Presentation. Taken from web on 12-24-2009: www.es.gsfc.nasa.gov/ses_data_2005/050802_Stamp.ppt

8 success factors

Speed Counts!!

Unique superior

Preliminaryassessments

Sharp & early definition

Spiral development

Build the voice of the customer

Critical success factors at a project level

8 success factors

Speed Counts!!

Unique superior

Preliminaryassessments

Sharp & early definition

Build the voice of the customer

Critical success factors at a project level

Spiral development

A unique superior product is the number one driver for success

1. Main benefits are important to customer (quality of audio, phone calls everywhere)

2. Offer customer new & unique benefits (any location, data services)3. Better value for money for customer (3,000 for the phone, 3 – 7

USD / minute)4. Superior to competing products in meeting customer needs (no

product in the market could do that…in 1987)5. Superior quality vs. Competitors (audio quality)

Begin Middle End Description ofKey issues 1987 1993 1998 the issues

1 Hi Med Low Eventually, traditional cellphones did something close to what Iridium proposed

2 Hi Med Low

3 Med Low Low Expensive phone & service

4Hi Med Low Eventually, traditional cellphones did

something close to what Iridium proposed5 Hi Hi Low

Quality of execution at the fuzz front end

Initial idea screening

Preliminary Mkt / Tech / Operation assessment

Voice of customer

Concept test with customer

Financial analytics

Quality of execution at the fuzz front end

Initial idea screening

Preliminary Mkt / Tech / Operation assessment

Voice of customer

Concept test with customer

Financial analytics

Critical success factors at a business level

Motorola had all the requirements identified by Robert Cooper as a Critical Success factors at a business level, but something completely different happened… Escalating commitment

Quality of execution of the value added chain

No spiral development !!

Key failure factors

Product Marketing Manufacturing Sale

Imperfect product brought a biginconvenience to the users.

The markethad changed dramatically after the long concept-to-developmentyears

Instable supply chainHappened when Iridium launched its service

Unreliable partners delayed setting up marketing teams and distribution channels

Key failure factors

Iridium Failed to:

Consider the time to build and implement the infrastructure to support its system

Truly understand the changing demand for the service and product it had to offer

Recognize how its ”escalating commitment” to the project blinded Iridium to actual costs and potential revenue

Outline

Product

Target Market

Key Failure Factors

Conclusion

Conclusion

•Execution: Standard project management advices to recognize all

deliverables prior to launch any project: test product, capacity

assesment 6

•Innovation framework: Motorola lacked a proper understanding of

the macroenvironment level (service providers and distribution

channels across the world) 6

• Complex projects should be evaluated as real options 7

•Project should have been executed as a technology development

project updating the relevance of it and the business case and

along the years 3

• Technology landscaping should be used to sense what other

technolgies become alternatives against project scope 5

•Management compensation must be tied to long term success of

projects 7

Conclusion

1. Bird, J. (1985). “Cellular Technology in Telephones,” Data Processing, vol. 27, no. 8, p. 37.

2. Christensen, C. (2013). “The Innovator's Dilemma: when new technologies cause great firms to fail”. Harvard Business Review Press.

3. Cooper R, (2006) “Managing Technology Development Projects”, Research & Technology Managment Journal, Industrial Research Institute

4. Fan Difu (2010) “Iridium international management case for Seminar in International Business” Tunghai University http://www.slideshare.net/Laoshi_Steve/iridium-20th-century-case

5. Johnston R, Bate D. (2003) “The power of Strategy Innovation”, American Management Association

6. Kahn L (2013) “The PDMA Handbook of Product Development”, John Wiley & Sons,

7. Kerzner, H. R. (2009). “Project management: a systems approach to planning, scheduling, and controlling”. John Wiley & Sons.

8. Lim, J., Klein, R., & Thatcher, J. (2005). “Good Technology, Bad Management: A Case Study of the Satellite Phone Industry”. Journal of Information Technology Management, 16(2), 48.

Reference

Group5