Feed R&D or Farm it Out SWOT Analysis
* RLK’s excellent brand equity
* Reputation for high-end audio-video design, domestic U.S. production and unique creative culture * Innovation as a core competence
* Employs the best mechanical and electrical engineers and designers in the business Despite competition (Psycosonics especially), RLK has a unique product development expertise located under one roof, a prototype that's proof of concept, and an audio technology that no other competitor is integrating into the product.
* Evaporated margins due to high cost of R&D and loss of market share to Japanese and other competitive competitors * Lack of innovative and new products in the market
* Lack of software engineers to keep up with increased demand for software based consumer electronics Different opinions in management: Lars (CEO) is leaning towards outsourcing R&D, while Ray (Founder) completely opposes outsourcing in order to protect brand equity and innovative quality
* Opportunity to conquer and regain a top position in the market through its innovative new product, iVid * Huge cost savings of outsourcing—just 1/5 its domestic cost, thus leading to higher margins and profits * Successful relationship with Inova laboratories can pave the way for future outsourcing jobs and contracts with Inova, thus reducing costs for future product offerings * Further outsourcing contracts with Inova allows for further software based electronic development processes to meet increased demand in the market. * Due to the breakup of Inova’s contract with RLK’s competitor Psycosonics, there may be an intellectual property leakage from the Psycosonics project into the iVid project. RLK will benefit from this tremendously.
* Erosion of brand image due to customer realization of RLK’s outsourcing initiative (no longer produced in the U.S.) * Unmet expectations:...
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