HBR Project-Paper - HBR Case Summary Feed R&D or Farm It...

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HBR Case Summary: Feed R&D - or Farm It Out? 1 BUS 300-01 19 October, 2018 Summary of Case Lars Inman is CEO of RLK Media, a high-end consumer electronics company produced in the United States. Much of the company’s success was built upon brand equity status from consumers’ appeal to handcrafted, high quality and premium products. In a recent meeting with Keith Herrington, RLK’s chairman, Keith expressed concerned about declining margins and has given the task for Lars to turn the company around in a year. Keith is attributing the changes in the external environment and has requested that Lars evaluate what consumers want. In the changing environment, customers are choosing other quality and competitively priced products in their competitive market. Lars proposes an idea by Ray Kelner, chief scientist and founder of RLK Media. Ray has developed an iVid headset prototype that features directional sound. The new innovation has the potential to propel the company, however, the prototype is in need of additional resources in software development. To fully develop this new innovation Ray has requested to hire a team of software engineers. Lars, having to deal with the current financial situation has decided to explore outsourcing in Asia. Lars traveled to India and met with Inova Laboratories, an R&D outsourcing company. After a meeting with Inova, the contract proposal included a 5% royalty and promises to have a team together in two weeks and manufacturing in under 12 months. The partnership with Inova would yield the software skills needed for RLK at one-fifth of the cost they would spend in the United States. Critical Issues and Decisions The critical decision for RLK Media is whether they should keep research and product
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HBR Case Summary: Feed R&D - or Farm It Out? 2 development in-house or outsource. RLK Media has to carefully consider their internal environment with changes and if broadening their scope in the external environment will offer the boost their company needs. Relationship to Course Content This case involves decision making in the external and internal environment of RLK. By evaluating these environments we evaluated the options and discussed the advantages and disadvantages of outsourcing research and development. RLK is dealing with changing
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  • Winter '18
  • RLK

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