Feed R or Farm It Out Essay Example

not cooperate with collaborating with Inova, 2) the long-term viability and risk reduction of any potential actions, prioritizing long-term benefits over short-term cost advantages, 3) the financial impact, such as revenue generation and cost savings, and 4) the ability to ward off competitors like Pycosonics to gain market share. Four possible alternatives have been identified and analyzed:

Alternatives Positive Negative
Alternative 1
Alternative 2
Alternative 3
Alternative 4

To regain leadership in product innovation, it is suggested that RLK invest more in research and development. Bringing in software-engineering talents can help improve innovation and creativity within the R department. This move could potentially increase RLK's brand equity, especially if the launch of their new product is successful. However, this option comes at a high cost as RLK does not have excess money available and may have to sacrifice funding in other areas to raise the estimated $6 million required. The success of this new product launch is crucial for the survival of the company, but it is not entirely within RLK's control, making this alternative even more precarious.

2. To take advantage of cost savings through outsourcing, RLK plans to collaborate with Inova on the iVid prototype. Both teams can work towards a common goal, facilitating communication and improving engineering design innovations. By working together, and with skilled teams on both sides, there is a high likelihood of success. Notably, RLK will also benefit from cost reductions from the start, which helps reduce the risk of potential market demand shortfalls.

Due to factors such as time differences and distance, there may be a lack of interaction between the teams which could lead to friction and become a problem for RLK. Additionally, there

are significant cultural differences between Ray's R team and Inova that could result in both teams being uncooperative and showing a lack of enthusiasm towards the project. Furthermore, outsourcing may put RLK's brand equity at risk as consumers expect products to be designed and produced in the United States.

To strengthen RLK's in-house capabilities in the long term, it's recommended to hire a few more software engineering talents and transfer some R leaders to Gurgaon for training. Increasing the number of software talents will satisfy Ray's request while enhancing the R department's ability to fulfill long-term obligations. Overseas engineers can assist in facilitating communication between teams and monitoring things at Inova. Despite expanding RLK's R department, Ray may still oppose collaborating with Inova. RLK may face losses if the partnership with Inova becomes problematic and Intellectual property is retained by them.

D) Explanation of Application of Course Concepts or Tools Used in Analysis

a) Inova and RLK form a Vertical Complementary Strategic Alliance by utilizing their respective skills and capabilities at different stages of the value chain to produce the iVid prototype.

b) RLK can create value and cost savings through financial economies by collaborating with Inova instead of investing a large sum of money in their own R;D department.

c) The decision to collaborate with Inova is a significant commitment of organizational resources and is difficult to implement or reverse, making it a strategic action. If RLK decides to collaborate, they may risk losing their intellectual property and potentially suffer long-term losses.

E) The alternative matrix presents various options for RLK to consider: a) investing more in R to

regain leadership in product innovation, b) collaborating with Inova to work on the iVid prototype and outsource for cost advantages, and c) hiring more software engineer talents to strengthen long-term in-house capabilities and transferring R leaders to Gurgaon for training. The impact of each option on RLK's R department, long-term viability, financials, and ability to ward off competitors such as Pycosonics are also analyzed. The outcome of the non-weighted alternatives matrix resulted in a total score of +1 for Option A and +3 for Option B. F) Based on the analysis, it is recommended that RLK should hire more software engineer talents to strengthen the R department and transfer some R leaders to Gurgaon for training with Inova. RLK should offer Ray a collaborative R model that he can accept, so that both teams can work cooperatively and obtain cost advantages as well as succeed in launching the new iVid prototype.

APPENDIX Concepts Used – Details Vertical Complementary Strategic Alliance and Outsourcing advantages and disadvantages. Efficient collaboration with Inova will reduce overall costs and enable RLK to become more flexible and responsive. The collaboration will also allow RLK to create better product differentiation for the new iVid prototype with the new ideas that Inova has to offer. However, failure of both R teams to cooperate may lead to long-term problems in the future. Effective communication is crucial for successful collaboration, especially across time zones and cultures. Multi-location development requires disciplined processes and documentation which may incur higher costs. Outsourcing value creation activities may lead to competitive disadvantage. Therefore, I recommend that Lars speaks to Ray privately about these issues and seeks his opinion. Lars should

also clarify that RLK’s survival depends on this radical change.

In order to convince Ray, Lars might consider moving him into a role that utilizes his skills but takes him out of the management position in R. Additionally, Lars and other members of the R team should visit Gurgaon to establish positive relationships with Inova and gain insight into their operations. To facilitate future collaborations, there are several factors needed to build long-term cooperative relationships, including mutual dependence, credible commitments, periodic renegotiation, and developing shared policies.

Utilizing long-term contracts is an effective way to establish mutually agreed upon terms and conditions for cooperation between Inova and RLK, ultimately promoting a harmonious partnership.