TTTech (A) Seeking Growth and Scale in New and Existing Markets
TTTech, located in Vienna, Austria, had pioneered an innovative new technology—time-triggered networks for embedded computer systems. By 2010, TTTech had grown into a US$25 million company by providing high-end technical solutions to customers with time-, mission-, and safety-critical requirements. Despite the completion of successful, high-profile projects such as these, TTTech’s overall growth had reached something of a plateau amid the global economic crises of 2009. Time-triggered technology was undeniably innovative but, in some cases, was more advanced than what was currently required by the company’s target customers. It was also sufficiently complex that the sales process was labor-intensive and usually had to start with engineering and then work its way up through product development to executive management. In TTTech’s primary industry segments, automotive and aerospace, customers were hesitant to make fast decisions, had extended design cycles, and were known for being relatively conservative when it came to adopting new technologies (partially due to the fact that TTTech’s technology affected its customers’ safety critical systems). Some were also facing difficult financial times, linked to the economic downturn, particularly in the automotive field. On top of these other challenges, many of TTTech’s projects required a high level of customization and a sizable service component that was not directly replicable from account to account.
The purpose of this case is to help readers: —Appreciate the difference between invention and innovation. —Understand the importance of managing complexity and achieving scale in the pursuit of profitable growth. —Evaluate strategic alternatives for optimizing performance in existing businesses and expanding into new markets.