The Sony AIBO and the Product Development Process in the Consumer Electronics Industry Peter Favia May 1, 2003 Advisor: Richard Lethin

Motorola Sony Development teams comprised of members of every process a product goes through Team members sign into a “contract” as a commitment to meet their functional role Employees are autonomous and empowered to get done whatever is necessary Small development teams comprised of and run by engineers Team members have flexibility to make quick decisions and respond to changing variables Developers set milestones to meet within a certain time limit to keep development moving

IBM Rochester Sony Development teams began as only engineers, but grew to include marketing, design, and any process the product touches Aims to achieve “Six Critical Success Factors” through tailoring generic industry practices Responds to market changes by continuously innovating development process Small development teams comprised of and run by engineers Milestone system is a common industry development practice Flexibility given to team members allows them to respond to market changes

Matsushita Sony Encourages engineers to work together with marketing, manufacturing, and sales, listens to customer comments Previously employed the “fast- follower” development model to enter markets Recently established a venture capital investment center in Silicon Valley to seek out desired technology to gain leadership in certain markets No evidence of small engineer design teams collaborating with other departments, no pre- product customer collaboration Has always used innovation as its main corporate vision, in new or established markets Collaborates more often with major firms on large scale projects but invests very little into venture capital and prefers to do most research in-house

What Sony Faces for the Future Consolidated the business divisions’ R&D units under the central R&D lab Collaborations with other corporations is more frequent Hopes to introduce a line of interconnected broadband- networked entertainment devices Price undercutting on similar products by rival firms Copyright infringement problems Change in development team model Venture capital investment to quicken product development and lessen strain on R&D