Introduction Ototo is a Singapore-based, family run technology company. It made money in the early 2000s from the manufacturing of OEM printers, scanners and facsimile machines for the Asian office market. In the past decade, the patriarch had started hiring R&D engineers to build its own product line as the OEM business becomes a struggle. These R&D engineers had been successful in launching Ototos first LED-based Monochrome Laser Printer in 2015. One year prior to the COVID-19 pandemic, Ototo has also managed to successfully launch its LED-based Colour Laser Printer to the market. After the first wave of the COVID-19 pandemic, the patriarch decided to bring in one of his children into the business as the Designated Successor (hereafter denoted by DS). The plan was for DS to plan and execute a new business plan. It was the patriarchs hope that a successful product launch will convince the non-family management that DS is a worthy successor. This will allow the patriarch to fade into the background and retire. DS had wanted to copy HPs success in the Zink printer, Sprocket. The patriarch was more careful and decided to hire an external consultant to study the market potential for Zink printers and provide recommendations for Ototo. The consultant was paid handsomely for the detailed work and this left a big financial hole in the budget for the R&D efforts for the Zink printer and the purchase of Zink paper supplies. In DSs hurry to create a new revenue source, DS had gone against the advice given by the previous consultant. The previous consultant had in the report strongly suggested against building this Fast Moving Consumer Goods (FMCG) product as Ototo did not have the wide distribution network, unlike HP. DS had thought otherwise and believed that Ototo could emulate the success of HPs Sprocket printer. DS had pulled R&D resources away from the development of LED printers to the Zink printer without consultation with the R&D Manager. DS also created a huge marketing campaign to promote its Zink printer. The Current Situation The company is currently facing a financial crisis. The banks are threatening to repossess Ototos assets as the company faces challenges trying to repay the loans taken out to finance the Zink business. After a good initial sales start, the Zink printer was plagued by reliability issues and this news quickly became a talking point among netizens. Comments such as a waste of money, bought a lemon, and stay far, far away was regularly posted and reposted on Ototos social media pages. Sales slowed down and Ototo is currently stuck with over 20k Zink printer units and 500k of Zink paper supplies in the warehouse. Besides meeting the banks' demand, the cost of storage in the warehouse is $10,000 monthly. The patriarch is keen to come up with a quick business idea to revitalise the seemingly ailing ship. He hopes that the new business revenue can come in to help with Ototos dire financial status. He is willing to take out S$2 million of his personal fortune to underwrite the next new venture that can provide a quick revenue source. One of the criteria of the new venture is that it must be deemed as an essential service. This is so that the business can continue to operate during the next public health crisis - Pandemic X. He had decided to appoint the General Manager (GM), who is a non-family member, to head the post-mortem investigation of the Zink business failure and then to lead the turn around with the new venture. In order to be deemed fair and not to handicap the GM, the patriarch has also approved the GMs plan to hire a new external consultant to assist in the report. On another front, the R&D Manager is facing difficulties in attracting and retaining talent in the R&D Department since the Zink printer fiasco. The engineers morale had been affected as they had to report to the R&D Manager and DS. Some of them were pulled out of their pet project - the new generation of LED printers with scanner and facsimile capabilities. They were asked by DS to work on the Zink printer with the backing of the patriarch. Several of the senior engineers have resigned and a few key engineers are showing signs of leaving. At a recent job recruitment fair at a local university, there were fewer than a dozen potential applicants from the graduating class visiting the companys booth and expressing interest. This was stark in contrast in 2016, when there were ten times more applicants for the three career openings after the rollout of Ototo first LED monochrome printer. This disturbing HR trend within Ototo is also playing on the patriarchs mind. The New Opportunity The patriarch has a former secondary classmate who ran a very popular Ayam Penyet store that is located in a shophouse. It is regularly pulling in $10,000 worth of sales per week. One of the key factors of success of this Food & Beverage (F&B) business has been the sweet chilli sauce, made from a secret family recipe. His classmate was thinking of retiring as his only child has a high paying job with a bank and has no interest in taking over from the soon-to-retire parents. During the initial discussions between the patriarch and his classmate, they had verbally agreed that the patriarch will to take over the Ayam Penyet business, and access to its secret chilli sauce recipe for S$1 million. The shophouse is on a long-term lease. The patriarchs plan was to use the next $500,000 to further grow the F&B. This foray into the F&B business will fulfil the patriarchs dream of having an essential services company when Pandemic X comes around. As the GM has been a safe pair of hands to Ototo for the last decade, the patriarch has decided that the GM will be the ideal candidate to lead this. The GM has been allowed to spend the remaining $500,000 in any way he deems fit; this would include the hiring of an external consultant to do a post-mortem of the Zink printer fiasco and also to develop the service aspects of this upcoming F&B venture.The patriarchs hope of getting out of this financial mess, restoring confidence with the banks, and finding out the root cause of his employees morale now lay squarely on the GMs shoulders.The Consultancy Project The GM has decided to hire a new external consultant to conduct an investigation into the Zink business failure and also to provide recommendations for the new F&B service business. Assume that you will be the external consultant that the GM of Ototo will hire to undertake this task. You are well aware that you should use the relevant frameworks and diagrams to help you prepare the report. Furthermore, you should supplement these with related research materials to back your report. These are the key points that you have learnt during your studies at SUSS.

Question 1a Conduct research on why innovation fails in a company and then examine four such reasons that are relevant to Ototos failure in the Zink printer business. Appropriate research should be carried out and the references should be included in the answer. (5 marks)

Question 1b Compare the user categories of the Innovation Diffusion Theories and suggest the likely category/categories of users who had bought Ototos Zink printers. Justify the selection. (10 marks)

Question 1c Analyse the reasons behind Ototo's talent recruitment challenges after their Zink printer product failure? Use the appropriate framework to answer the question. (15 marks)