Feed Rd-or Farm It Out

Feed R&D - or Farm it Out?

Webster University

Executive Summary

Ray Kelner, founder and chief scientist at RLK Media, began the company in 1985 out of a converted muffler shop in Waltham, Massachusetts. The company began creating high-performance audio speakers custom made speaker towers that sold for $20,000

(Norhia et al., 2005). A decade later, RLK Media had become a billion-dollar business after the first CEO differentiated the company with high-end expensive consumer electronics. However due to the acquisition of Opticon and the attempted entry into the home theater market without first developing a strategy and researching the market, RLK Media was in serious financial trouble. There are several key strategic issues associated with RLK Media: unaware of the company strengths, weaknesses, opportunities and threats; no long term strategy; no objectives; and requires a change in the culture to match the current market. Outlined are three possible alternative strategies that could be considered by RLK Media in order to regain market share and brand equity.

Feed R&D - or Farm it Out?

I. Current Situation

Ray Kelner, founder and chief scientist at RLK Media, began the company in 1985 out of a converted muffler shop in Waltham, Massachusetts. The company began creating high-performance audio speakers custom made speaker towers that sold for $20,000

(Norhia et al., 2005). A decade later, RLK Media had become a billion-dollar business after the first CEO differentiated the company with high-end expensive consumer electronics. RLK Media built its reputation and strong brand equity on the basis of strong innovation and quality work. When current CEO, Lars Inman, took control of the company, he led the acquisition of Opticon LCD Labs. This acquisition gave RLK Media the resources to enter the home theater market. However Inman did not understand the industry and underestimated the Japanese electronics giants ability to produce high-end...