Elio Engineering Case Study

How can they transfer their technology into a real entrepreneurship product?

The case details Elio Engineering, Inc. case where “Paul” a bike designer is focused on. He developed the technology of the automotive seat, and during the early years of the production, he only installed them in luxurious cars, but with time he knew he had to come up with new technology that would penetrate the whole market. The technology is composed of drum and cable elements as opposed to gears. Even though it was tough to develop the technology, Paul managed to create it but, the company has not been able to expand their market and obtain a lot of profits.

Price competition and market entry

Price competition and market entry have been a challenge to the Company. The technology has also experienced difficulties because of the federal safety requirement, which sets strict minimum requirement. It requires a significant capital requirement in the assembling of the seats, and the material science needed which includes brake friction that involves a lot of temperatures. They are unable to enter the market since Tier supplier has a lower cost and their connection to the OEMs also blocks other technologies from entering the market.

Alternatives

Alternative 1: Elios technology should cooperate with a tier 1 supplier of JCI. Tier 1 supplier enjoys the freedom of enormous scale advantage in distribution and manufacturing. The company should therefore strive and enter the market as an outsourcing company so that all the capital investment that might be experienced is cut off. Its cooperation with tier one company will make the process cheaper and more comfortable in market penetration.

The company can enter the market and supply more of its technology by a joint venture. Elios Company can partner with tier 1 and tier 2 companies to develop seats and market them through an agreement that is licensed. However, the company will be in less control of the technology and on a low bargaining position, they will experience a lower profit margin.