The HP Kittyhawk case allows students to explore in detail why it is so difficult for established firms to succeed at disruptive technologies.
The Kittyhawk team developed a 1.3 inch disk drive: a disruptive technology in every sense. From a project management point of view, HP did everything right. They had set up an autonomous project team, and gave the project heavy senior management support. The team focused on the emerging personal digital assistant (PDA) market, which in the early 1990’s was believed to have explosive growth potential. As a consequence the team created a product that had incredible shock resistance and low power consumption, and weighed less than an ounce. In terms of field failure it was the most reliable product ever introduced in the disk drive industry.
HP created a remarkable new technology, but its targeted market never blossomed. Just at the end of the case as the clock was running out on the Kittyhawk team, Nintendo approached HP with its Nintendo 64 system with a slot for a 1.3” disk drive, and projections that it would sell several million units per day during the upcoming Christmas season. The problem was that they needed the drive for $49.95, and HP had designed the Kittyhawk for a different market at a cost of $250 per unit. The 1.3 drive was a potentially disruptive technology which could have been designed to a $49.95 price point, but HP had positioned it as a sustaining technology, as nearly as possible.
Whether a new technology is sustaining or disruptive is often a strategic variable rather than something inherent in the technology itself. HP took the market’s structure and the needs of the customers it had identified as givens, and attempted to push the technology far enough that it addressed those needs. A very different approach would have been to take the disruptive technology’s current capabilities as a given, and then find a market which valued the attributes of...