ASSIGNMENT-5 (E INK CASE STUDY)

1. What did E-Ink do right?

Sol) E-Ink went through many stages where things could have gone drastically wrong had these

strategies not been implemented:

a. Formation of SWAT teams to address short-term issues like speed and power-consumption.

b. Reducing staff which brought the company a $3.5 million revenue.

c. Shutting down the fabrication plant in Woburn as the production was too small and it had

already fulfilled the research goals.

d. Partnering with Toppan Printing was a master-stroke as it was well connected with Sony,

which E-Ink viewed as a potential customers for selling eBooks.

e. Restricting to supplying ink as a sub-component to display makers rather than building the

complete display module.

f. Shutting down Ink In Motion, cancelling the watch contract, and focusing on paper-like

graphical displays for electronic publishing devices for Sony.

g. E Ink chose to become a materials supplier company supplying the display component when it

could alternately become a licensing company, a sub-assembly supplier, or a product supplier.

h. Collaboration with Philips which not only infused money, but also worked with E Ink to

prototype and assess glass-based eBooks and PDA displays for future.

3. What business model would you pursue?

Sol) After generating enough (increasing) revenue in the years 2004-2005, I would have E link

as a licensing company apart from a materials supplying company which it already was, as the

typical “cost per unit licensing” was about $3 with a gross margin of 95% and a sizable market

size of $45 million. Also, the incremental investment required to break even was very less ($5).

Only materials had a higher value chain position in terms of gross margin at 50%. As an added

advantage, E Ink already filed 26 patents.

4. Where was E Ink on the Technology S-Curve?

Sol) From the time E Ink started off in 1997, it had very few display makers that it could sell its

display component to, until the mid-2005, where it was working with half a dozen display

makers that were into the plastic matrix backplane production which is a drastic improvement in

the technology and its sales. The period from 1997 until 2004 can be considered as the phase of

old technology and the period after 2005 as the phase of new technology in the S-curve.

Also, when E Ink dropped their signage and watch customers to bet the farm for making radio

paper for Sony in 2003 and the company had generated enough revenue by 2005, they

considered returning to both the processes, which can be marked as a new technology in sales in

the S-curve against shutting them down as old technology and as a result, sales.

By entering the segmented business in 2005, it expected a $10 million annual revenue in the next

few years, an exponential improvement from previous years.

Thus, the period between 1997 and 2004 can be considered as the period of old technology and

the period after 2005 as the period of new technology in the S-Curve, be it in the parameters of

sales, revenue or performance.