color kinetics incorporated: answers to case questions
1. What Should the Decision Criteria Be in Selecting a Target market in 1999?
There were four primary decision criteria that should have been considered in the determination of the selection of a future target market for Color Kinetics Incorporated in November 1999. The four criteria were (a) the appropriateness of the technology for the market, (b) the cost to the company of the development of the technology, (c) the cost of implementing the market strategy in relation to the selected target market, and (d) the near-term revenue-generating potential associated with the selected market. In actual application of these decision criteria, compromises would be required to develop an optimal combination of the outcomes associated with the four factors (Christensen, 1999; Moore, 2000).
2. Which Market Should the Company Target in 1999?
The case material delineated five options that were considered by the Company for the target market in November 1999. The market selection options were (a) expansion in the current target market, which comprised of "'retailainment' and visual merchandising markets" (Narayandas & Carvella, 2001, p. 9), (b) expand up-market into theatrical and entertainment markets, (c) expand down-market into consumer product mass markets, (d) expand into niche markets, and (e) expand through original equipment manufacturing sales an by licensing (Narayandas & Carvella, 2001). The market that should have been targeted by the Company in November 1999 was the theatrical and entertainment, which was an up-market expansion strategy.
3. Why Is the Company Technology a Good Fit for the Selected Market?
The Company technology was a good fit for the entertainment industry because it represented an improvement the quality and the efficiency of the technology that was relied upon in the theatrical and entertainment market. The theatrica...