Santa Cruz Bicycles Case Study

The Santa Cruz Bicycles case study presents a big problem that the company faces in its research and development procedures (R & D). It is evident that the company did not have the best practice principles in its product development process (PDP). The research should have concentrated on creating an interdisciplinary mechanical engineering team that consisted of engineers and social scientists. This way, the innovation strategy would mainly focus on developing a product that offers a high value on its utility and service to consumers. Carvalho and Toledo (2008) mention that, this approach is practical since it enables a company to create a product or service that continuously satisfies consumer needs and generates a robust competitive advantage. The integration of research and development structures is an integral part of management practice. This is because the capacity and capability of a company to develop a product that provides solutions are linked to its ability to correspondence to the various stages of PDP.  Since Santa Cruz Bicycles had already identified the market needs for speed and comfort, the main weakness of their strategy was their inability to coordinate with specialties, determine the risk propensities and introduce policies to avoid them. Therefore, the company incurred a loss of time and money.

Case Analysis

The process of integrating the R&D and PDP is a common practice between different specialists and roles in a company with the primary objective; being to generate knowledge and use technological advancements in the different phases of product development. Carvalho and Toledo (2008) suggest that involving leaders that have specialized expertise in the technical and managerial department is an essential aspect of an organization’s managerial practice. Notably, the innovation of new products highly depends on the shared knowledge of various specialties within a company – with the sole intention of creating a product that possesses specific features that are appealing to the market. For Santa Cruz Bicycles, this integration approach would have assisted the company in saving time and cutting the costs invested in the new product. Past managerial experience from different projects would have enabled those working in the new project to use their technical skills and provide solutions.

Mechanical development projects require consistent consultation between managers to exchange knowledge and applying new technologies to a new project. The leadership at Santa Cruz was unable to communicate efficiently by sharing their past experiences with different representatives from various departments. According to Brühl et al. (2010), this practice is mainly beneficial during the integration process since it allows the specialists to generate new improvements and evaluate the performance of the new technologies applied. Furthermore, this also encourages extensive research and implementing new techniques from other R&D projects. The absence of a cross-functional team weakens the strategic planning and the initial stages of product development. Representatives from the R&D, PDP, manufacturing, marketing and distribution ought to be involved in the development process to evaluate and approve appropriate improvements. 

The pre-development phases are crucial for the marketing and R&D teams to synthesize research data and existing constraints. This will assist in the decision-making process for the products to be generated. Moreover, it justifies the involvement of various specialists during the PDP to avoid the transfer of operational issues and predict possible shortcomings in a design (Brühl et al. 2010). The Santa Cruz project is an example of a technological development project that required consistent consultation between marketing and R&D representative to accelerate the project and fulfil its requirements. The case study exposes a gap in the company’s organizational structure which further contributed to the lack of time and cost management. A well-organized marketing and production departments would have provided sufficient knowledge and governance linked to PDP.

Operational features of a project not only influence the outcome of a product but also expose the strategic position of an organization’s structure. According to Brettel et al. (2011), the implementation of new technologies allows a company to exploit the available opportunities and reduce costs. Hence, attain the economies of scale and scope concurrently. Santa Cruz Bicycles had a real advantage as they were already exploiting new market demands but their weak organizational structure cost them time and money. Gumusluoglu and Ilsev (2009) assert that achieving a common understanding between representatives is crucial during product developments – since the concerned parties tend to identify the activities that may hamper the process early and avoid it. If the technician at Santa Cruz had realized the downside of their design from the beginning, they would have avoided spending time on a project that would not fulfil the intended development activities. 

Conclusion

The Santa Cruz Bicycles case study presents a gap in the organization’s R&D and PDP structure. The lack of a robust integrated unit in these areas affects the company’s managerial feature which contributes to its inability to manage time and operational costs. It is vital for the company to implement strategies that ensure that the marketing, R&D, PDP and distribution specialists work together in the development of a new product. This will enable Santa Cruz Bicycles to create a product that attains its development goals within a manageable cost and time.

References

Brettel, M., Heinemann, F., Engelen, A. and Neubauer, S. (2011). Cross-functional integration of R&D, Marketing and Manufacturing in radical and incremental product innovations and its effects on project effectiveness and efficiency. The Journal of Product Innovation Management, 28 (2), 251-269.

Brühl, R., Horsch, N. and Osann, M. (2010). Improving integration capabilities with management control, European Journal of Innovation Management, 13 (4), 385-408.

Carvalho, J. L. M. and Toledo, J. C. (2008). The challenge of integrating applied research and product development process: case study product: Management & Development, 06(2), 173-181.

Gumusluoglu, L. and Ilsev, A. (2009). Transformational leadership and organizational innovation: the roles of internal and external support for innovation. The Journal of Product Innovation Management, 26(3), 264- 277.