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GENERAL FEEDBACK ON BACK BAY BATTERY SIMULATION Excerpts from the Simulation’s Teaching Note The Division Manager’s Dilemma The Division Manager at Back Bay Battery faces the classic innovator’s dilemma. While Back Bay has a successful business that is generating reasonable profits in NiMH batteries, a new technology in the form of ultracapacitors looms on the horizon. For its existing customers, ultracapacitors are a long way from meeting current customer needs which prioritize things like energy density, selfdischarge rate, and cost. Certainly none of them could envision dropping in ultracapacitors as a replacement anytime soon. Back Bay Battery has been spending to reduce NiMH self‐discharge, leading to substantial improvements over the last two years. Not making an investment in self‐discharge performance would potentially cause the company to be disadvantaged relative to its competition. It could spend R&D money in other areas as well. Process improvement is most likely to lead to manufacturing yield improvements and lower product costs. If it wants to keep improving energy density, that is probably one of the more expensive and longer‐ range R&D programs it could choose. Another pressure facing the Division Manager at Back Bay Battery is that the product manager at a major power tools manufacturer, who happens to be one of Back Bay’s largest and best customers, has been encouraging the company to focus on its specific needs for an upcoming refresh of its consumer power tools line. The customer is looking for higher power density and lower unit battery costs, as it is feeling market pressure from Asian competitors. He has been shopping for competitive NiMH batteries sourced in China and has made clear to Back Bay the importance of remaining price competitive. The NASA demonstration of an ultracapacitor‐powered drill caught