16/09: Case Advent Corporation

1. What are the key elements in Advent's strategy? How successful has Advent been? Why?
Blue Ocean Strategy
Differentiation Strategy (Niche Market)
Backward approach of product development
(customer intimacy: high quality products)
Brand Equity
There is a high inherent risk level. After a downwards trend they were forecasting a much higher
sales level (40-50m)
2. What are Advent's distinct technological competencies? Please construct a matrix
showing the technological competencies embodied in the different segments of the audio
business. How is this different for the video business?

Teece Model
Advent is not patenting. Thus, it has high imitability but, their complementary assets are highly
held. Thus, by teese model , holders of assets gets the profit.
Their complementary assets are their dealership network (distribution) - off-the-shelf product
availability, technology sourcing, ability to leverage knowledge & sensitivity to improve
technologically according to customer preferences. They possess the ability to utilize their
knowledge regarding complementary products. Eg. Noise cancelling devices & audio players.

Henderson Clark Model

In any venture, Advent is never changing the core concepts. They have the ability to aggregate
existing components in response to a perceived customer need or product need. Thus, it is more
focus towards - architectural innovation.
For Audio Business:
Substance

Ext. Tech
Sourcing

Competitive
strategy

Leader
Leader (Ability
(Kodak & to innovate both
Du Pont) incrementally &
architecturally

Strong

Value Chain
Stance

Broad

Continuous
Optimization

Resource
Commitment
Stance

High

Management
Stance

Int. Tech
Sourcing

Narrow

Product
Development

Process
Development

Technical
Support

Different Segments of Audio Business

1.End product - Loudspeakers, M200
A.Using innovation to create a differentiated product at a moderate cost
B. Identification of latent customer needs
2. Intermediate product (noise reduction units)
A.Identification of existing issues & needs
B.Standardization of components
C.Simplification of design & production
How different for video business
Competencies for video business
More focus on end customer in video as no intermediate products are there
Scope for improvement in technical know-how-optics, CRTs and display technlogies
Better trained sales force

3. What are the key issues and problems facing Advent? Please prepare a detailed action
plan.
Their current strategy is to serve small complementary, niched market. In contrary, the television
market is large and highly competitive.
Operations: Their company isnt organised for large scale, cutting overhead, Economies-of-scale
missing in this industry
&
No patenting, licensing. It is not their core competence to produce in large scale and they are not
able to outsource it via patenting. So they are missing the high volumes and big profits.
Outsource the large-scale production of their products
Distribution: Different distribution capability required for the TV industry.
For the television they should inform the sellers and provide after sale services
Training of sales personnel (informing correctly the customer)
Promotion: No Advertising and campaign to promote their products
Start Advertising and campaigns
Decision-making - One man company. Based on his intuition and experience.
Build a board of directors and core innovation team. Take consultative approach. Data-based
decision rather than only intuition?
4. Characterize Kloss's style as a general manager. Does he need to change? How?

Is focused on emotions and gut feeling when taking decisions.

Might be able to reduce risk by becoming more analytic and trusting data and people to larger
extent
Missing of a long-term vision: Whatever ideas comes into his mind, he tries to develop it,
without having a clear vision about where his company is going. His main vision is to innovate
and this at all cost of marketing, large scale production,
He should provide his company with a clear vision, at this moment he doesnt determine the
way but exposes himself to where the innovations gets him. It is probably a good idea to focus
on the audio segment, where they have a large technological knowledge
Positive aspect: He has a good entrepreneurial mindset. He is able to predict market trends based
on his intuition and meet customer demand with new products.
Delegation, now one-man company
One Board of directors, one core innovation team, consultative-approach