Cost Improvement By Design Innovation

Company : Agilent Technologies

Product : Optical Mouse for Personal Computers

Year of Introduction : 1999

Aspect Modified : Introduced a tiny Infrared Camera Sensor in the Mouse

Customer Value Created :

Optical mice have several benefits over track-ball mice:

* No moving parts in mouse means less wear and a very low chance of mechanical failure.

* There is no way for dirt to get inside the mouse and interfere with the tracking sensors.

* Increased tracking resolution means a smoother response.

* They do not require a special surface, such as a mouse pad, to operate.

* They are much lighter in weight, and ergonomically better suited.

* Full compatibility with PC maintained.

Cost Impact of reconfiguring the Value Chain:

The new type of mouse, due to its innovative design, has practically zero service and maintenance cost. Further the financial reaction makes it cheaper than it's predecessor, the track-ball mouse, because of material costs saved. The ASICs and CMOS sensor camera used in Optical mouse are ideal for mass scale production and hence per piece price of each are far less than the heavy lead balls previously used along with the mechanical sensors. The company can charge a premium for the value proposition it has offered to the customers even if the offered price was just less than that of the track-ball mouse.

Conclusion :

This case exemplifies how the product design innovation has caused a significant customer