Why Is Netd Having Problems Commercializing Some of Its Ideas?

1. Why is NetD having problems commercializing some of its ideas?

The main problem of NetD was the inability to take early-stage ideas from implementation to manufacturing. This was due to three factors.

Firstly, NetD’s employees were spread over various departments and their engineers or inventors originated from different backgrounds. This means that the team of inventors work together on one idea, each with his own task given. Therefore the inventors only have a limited amount of knowledge about the whole project its functionality. Therefore, if one inventor is leaving the firm or is unavailable to the project, his know-how leaves as well. Now it is very costly to reproduce the knowledge of the missing team member and even more costly to find a person on the same skill level.

Secondly, taking an idea or a patent to a product ready to sell in the market is a very resource-intensive process. A product is an item that is reliably doing for what it is engineered and therefore can be sold without hidden risks like a product recall. An idea, however crucial for the development of the product, but needs more resources like time and money to develop a manufacturing side or marketing. NetD was very successful in creating various ideas, but then when R&D department sent their documentation to manufacturing department, the idea was not always implemented in the correct manner. As said in the case: “Even the best recipe doesn’t tell the cook exactly how to bake the cake”.

Last but not least, the consolidation of ideas between R&D and manufacturing is not always optimal. R&D is creating a high amount of ideas, but once they have an idea and once they have documented it, they don’t tend to think further about the possibilities of implementing this idea into a product because NetD has an own department for it. This idea is then simply sent to manufacturing and then the manufacturing department has to try and create a product enveloping the solution. This then creates unnecessary transaction costs if manufacturing realizes after a certain amount of time that the idea presented by R&D is not feasible and needs to be re-engineered.

All in all the R&D department has proven that they can invent break-through ideas, but their challenge of commercialization lies within the consolidation in between the different departments and the further implementation of ideas into a product that can actually create revenue.

No2:

How should Fogg deal with Riceman? Which of the following will you do if you were Fogg? Explain your choice.

Summarizing the case, it is impossible for NetD to be the owner of this patent because U.S. patent law states that only the real inventors own the patent. Therefore it is impossible to get a share of this idea by a legal prosecution. The Management has to play his cards carefully in order to archive the best outcome possible. Especially the offered licence of Riceman to NetD plays a significant role in this discussion. In the following, we are discussing the four opportunities NetD has to solve this IP problem.

First Option: Firing Riceman

NetD has the opportunity of firing Riceman because of a lack of loyalty. This would threaten the relationship between those two parties because the reason of firing Riceman could be understood as a personal offence of Fogg to Riceman. As a reaction to this offence, Riceman could withdraw his offer of a free licence of his new invention. Therefore the cost of taking any profit of the invention rises. NetD would lose an important edge against its competitors. Due to the fact that the invention is undevelopable without Ricemans know-how, NetD can not take