When Mick Mountz set out to build Kiva Systems, he knew he was
attempting to disrupt long-standing incumbents in the material-handling
industry--and he succeeded. There is no question that the company's
armies of mobile robots upend the normal pick-and-pack process in an
online retailer's warehouse. But Mountz explains that it wasn't enough
to envision the novel approach, invent the required technology, and
make it commercially viable--he had to do much more to help customers
take on the risk of buying an unprecedented solution. He had to price
it in a way that made his company, not the customer, bear the risk. He
had to provide all components of the solution so that Kiva would be
100% responsible for its performance. And he had to design his
organization to deliver the entire customer experience--from initial
marketing contact to after-sales service. It all adds up to a daunting
proposition for a new company--and begins to show why disruption is so
hard to pull off. When a company must defy so many of its industry's
norms to change the game, it's out there to sink or swim on its own.
What are the
sources of Kiva's success? How well does Kiva fit the Innovator's
Dilemma model? What was the big picture that the CEO saw when he
started the company?
How would you describe Kiva's
corporate strategy? How would you describe their marketing strategy?
Consider the five C's, four P's, and a concise product positioning
statement. Do you think Steve Jobs or Mark Zuckerberg used the five C's
and the four P's when they started?
What role does culture play in Kiva's success?
What are the steps, and who are the stakeholders, in the sale and installation of a Kiva system? Describe the DMU and the DMP.
What are the limits to Kiva's business model?
you are the salesperson for Kiva, what is the BEV calculation that you
would show the CFO of a prospective customer company (where V refers to
the number of warehouse picking and shipping employees)? Use the
information in the case, and assume that factory workers are paid
minimum wage of $10/hour. How does this assessment affect what size
company Kiva should target?
Why did Kiva sell to Amazon? Why did Amazon buy Kiva?