ANALYSIS OF A FAILURE

Guilherme Pacher

Silvia Podestá

Dhanashri WalimbeErik Andrade

-Timeline-

1994-1997 :Motorola decline in sales growthFirst envisioning of the idea

Iridium LCC is formed as a spin off of Motorola

Project development span

Motorola Group sales growth decline

Staiano appointed CEO of Iridium

OFFICIAL KICK OFFOF THE IRIDIUM SYSTEM

August 1999:final bankruptcy

Investments in building satellites

1985 1987 1991 19981996 1999

FunctionsPerformance

Meaning

Cost

Extra - Cost

Global connectivityReduced call delay

Better portabilityManageability

Economic

Business development

Physical

Limited access to thesattelite

Too many accesories

High weight and volume

Temporal

11 years development

Emerging digital phones

Economic

Lost of the satellite platform High switching costs

Cost of sale

Service provisionAccesoriesBrand damage

Manageability

EmotionalSense of securityReduced call delay

PsychologicalSocial status

Benefits

Efforts

Internal: flaws of the product (poor performances inside buildings, moving context, excessive weight, non affordable price, poor data capability..)

External: the huge time span of development prevented iridium to keep up with the changes occurring in phone market (rise of digital cellulars...). At ed in the development of only one technology/solution.

Misunderstanding of customers' real needs and expectations launch the concept was out-of date.

Too much money invested in the development of only one technology/solution

Iridium failure issues

Predictable failure? Why did they go ahead?

They thought technology was just for technology’s sake.

They overestimated the value of technolgy and the returns without thinking on the context evolution

No returning point, too much effort and money invested prevented them to back off.

They could have anticipated by considering the evolution of the market and the risk analysis.

BUT

Motorola gaining ?