REV: DECEMBER 4, 2006
CLAYTON M. CHRISTENSEN HOWARD YU
Pitney Bowes Inc.
Jim Euchner,1 Vice President of Advanced Technology at Pitney Bowes, returned to his office after another long meeting at which the agenda was to determine whether a sufficiently large market existed to merit investing in another new product idea that his group had developed. He muttered to himself, “Why is this so hard? It seems that there’s never enough data for us to enter a new market until after someone else develops it. Then it’s too late!” On the corner of his desk sat one of the fruits of their labors, a Stamp Expressions™ postage printer. Stamp Expressions™ allowed customers securely to print on-demand postage in their homes or offices that featured their own corporate logos or photographs. This was Pitney Bowes’ latest attempt to target the small business segment. For better or worse, the Stamp Expressions™ product concept had changed significantly after it had left Euchner’s shop, as various people and groups in the company had influenced its design and business plan. The business model had been through as many iterations as the feature set of the product had gone through. He wondered whether all this iteration was productive. Was Pitney Bowes betting to win or just minimizing risks? On the eve of Stamp Expressions’ launch, Euchner could only hope that history would prove these changes to have been for the better.
In 2006, Pitney Bowes was an 86-year-old company best known for making postage meters. Inventor Arthur H. Pitney patented his first “postage stamp device” in 1901. Seven years later, entrepreneur Walter H. Bowes incorporated the Universal Stamping Machine Company to sell stamp-canceling machines to the Post Office. The two inventors merged in 1920, creating the Pitney Bowes Postage Meter Company. The company pioneered the concept of metered mail, in which companies that generated high volumes of mail could print postage on their envelopes at high speeds, instead of having to glue stamps individually on each piece of mail. Early customers included National City Bank in New York (later known as Citicorp) and The New York Times. In the 1920s and 30s, Pitney Bowes successfully exported postage meters outside the U.S. market, introduced a smaller, less expensive model that sold well during the Great Depression, and launched the meters that were able to weigh and print the appropriate postage amount on each piece to be mailed. 1 Pronounced “Īk’-ner”.
_______________________________________________________________________________________________________ Professor Clayton M. Christensen and Doctoral Student Howard Yu prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2006 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.
Pitney Bowes Inc.
Pitney Bowes’ inventions, including the mass-market postage meter, electric mail opener, and automatic mail-sorting machine, grew the value of metered mail to $190 million during the 1930s. By 1949, postage paid through metered mail accounted for 36% of all U.S. postal revenues. Pitney Bowes joined Fortune Magazine’s list of 500 largest companies in 1962. The company was consistently ranked among the companies receiving the most new patents every year. In 2006, Pitney Bowes had over two million customers, more than 3,500 active patents...
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