Explain the difference between “devices” and “complete products,” as defined by Davidow, and the importance of this difference to the success of our high-tech venture.
1. Read the article “The Winning Strategy” posted in the Assigned Readings folder in Canvas Files.
This chapter is from William H. Davidow’s excellent book, Marketing High Technology – An Insider’s View. Dr. Davidow is an electrical engineer from Dartmouth (u/grad) and Stanford (PhD) who became marketing manager for H-P computers and then senior vice president for sales and marketing at Intel. The article is written from his perspective based on corporate experience. He understandably describes the engineer-inventor’s role in the laboratory as being distinct from that of those in the marketing department. In our high-tech startups, however, we engineer-inventors will not likely have the luxury of a marketing department, at least not in the early days (years) of our ventures.
As such, Davidow’s advice should be of particular interest to us in our startup leadership roles.
Think about the following questions as you study this article:
a. Describe market segmentation. Why is it an important element of a winning strategy?
b. Explain the difference between “devices” and “complete products,” as defined by Davidow, and the importance of this difference to the success of our high-tech venture.
c. As our customer base grows, it also evolves from early adopters to mainstream users.
What important characteristics do we need to know about this evolution?
d. How does the marketing of high-tech products differ from that of other consumer products?
2. Then, following the Case Method Overview (in Canvas Files) study the 4 sequential sections of the
Vermeer case:
• Vermeer Technologies (A): A Company is Born
• Vermeer Technologies (A-1): Hiring the CEO
• Vermeer Technologies (B): Realizing the Dream
• Vermeer Technologies (C): Negotiating the Future
The Vermeer product ultimately became Microsoft’s FrontPage web site creation program.
Think about how you would answer the following study questions during your analysis of this case:
a. Describe the evolution of Charles Ferguson’s original idea to Vermeer’s eventual product.
What market opportunities and competitive forces drove this evolution?
b. What were the sources and amounts of capital for Vermeer from its inception in late 1993
through the end of the (C) case in December 1995?
c. Describe the working climate within Vermeer during the time of the (B) case? Was this a company you would want to work for at that time? Why?
d. In terms of our above reading, The Winning Strategy, describe the market segmentation strategy pursued by Vermeer.
e. What was Vermeer’s marketing strategy as described in the (B) case?
f. Vermeer was facing 4 alternative courses of action in the (C) case. What were the pros and cons of these alternatives? What about the pros and cons from Microsoft’s perspective?
Be prepared to discuss this reading and case in class.
3. Following the guidelines in the Case Method Overview posted in Canvas Files, write a concise 2-page essay addressing the question:
Vermeer is facing 4 alternative courses of action in the (C) case. One of them is a buyout offer from Microsoft. What are the other three? From Vermeer’s perspective, what are the advantages and disadvantages of accepting Microsoft’s buyout offer? What course of action would you take if you are Charles Ferguson? Why?
Submit your essay as a PDF document via Canvas prior to class. This essay must be your own work
subject to the University’s Code of Academic Integrity.Case Method Overview
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