The Kittyhawk has never flown
In the early 1900s, Hewlett-Packard believed they had a chance to enter new markets. DMD, HP's Disk Memory Division, was providing 2.5" hard-disk drives, but it was behind other competitors in this market. Despite spending effort and don't succeed to reach the leader companies in established positions, HP's managers explored opportunities in what they believed would be the next-generation needs. The company focused on the emerging Personal Digital Assistant market, which at that time was thought to have a huge growth potential.
HP managers recognized the next-generation portable devices would need drives smaller then the 2.5" that were being produced. So they worked to develop the Kittyhawk, a 1.3" drive promising would be the smallest in the world. The new technology offered to provide smaller and lower-cost solutions for customers, thus the Kittyhawk would grow faster than the HD market becoming a significant growth leader.
Setting up the Strategy
Going ahead, the CEOs set up a heavyweight project team and created a separate, financially autonomous division for the project to ensure that the technological breakthroughs would be developed. As a result a drive with incredible shock resistance and low power consumption, weighting an ounce was created. This autonomous business unit was an intelligent strategy because this breakthrough model was fundamentally different to other divisions in values, working structure and resources. Not only the team had autonomy to develop the drive, but also to find new markets. On the other hand, HP senior management was the responsible for setting Kittyhawk's revenue expectations. The CEOs failed when they had raised a U$100 million revenue rate in two years after launch, a value three times higher than the original forecast. According to Christensen, because disruptive technologies initially serve emerging markets, in short-term they are usually financially...