Peak Eletronics’ CEO: From Cassettes to Digital Tape Players

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Table of Contents

Introduction
The Role of Innovation and Nostalgia
The Case of Peak Electronics
Conclusion
References

Introduction

The digital revolution is an ongoing process that resulted in the rapid shift from mechanical technologies to modern electronics. This revolution has caused many problems for the digital industry, where each individual company has to decide which innovations it is profitable to introduce on the market. The case study, presented by Moorhead and Griffin, describes the shift from cassettes to digital tape players and how Peak Electronics and its CEO Lynda Murray handled this change. The goal of this paper is to outline the opinions that different branches of the company had on this issue and theorize what would be the best course of action to take.

The Role of Innovation and Nostalgia

The shifts that happen within the digital revolution take effect at rapid speeds and the internet provides an instrument for customers to find out about new technologies at an accelerated rate. This results in corporations that do not have enough time to research whether adopting a certain trend will be profitable for the business. On the one hand, allocating resources for creating a product whose commercial potential and technological structure have not been properly calculated can end in the business losing money. On the other hand, studies suggest that brands that “are slow to react and adapt their strategy and business model to change, fare poorly” (Epstein 2018). Another trend to consider is that any generation faces its own form of nostalgia, which is “a sentimental imagining or evocation of a period of the past” (Campbell, & Pallister 2019). A form of this notion that is particularly prominent nowadays is digital nostalgia for analog devices.

The Case of Peak Electronics

The Reality of the Situation

Peak Electronics was “the leader in making parts for standard cassette and reel-to-reel tape recorders” (Moorhead, & Griffin 2000) when they were confronted by the problem of digital tape players first entering the market. While the technology was still encountering legal issues in the US, the company was afforded time to assess the situation and make an informed decision. Lynda Murray, as the CEO of Peak Electronics, had the responsibility of making the final decision. In order to establish a plan of action, she consulted all of the departments in the corporation where opinions differed from each other. On the one hand, the marketing team supported the shift to a digital era as they correctly predicted the future of devices meant for listening to audio. The research and development team, who were getting bored with their current work with cassettes, hoped to pursue the innovation that digital tape players represented. On the other hand, workers were worried that the new devices were nothing but a passing trend. In the end, Murray acquired a list of pros and cons of introducing digital tape recorders as a product of Peak Electronics and had to make the decision herself.

The Best Possible Outcome of the Situation

The goal of this case study is to theorize what the plan of action would be if we were the ones to determine it. It is possible that the new technology of the time would be nothing but a passing trend. However, once its popularity would wane, another innovation would enter the market, building on the design of the previous trend. With this logic in mind and the prevalent opinions of the workers gathered by Murray, our decision would be to introduce digital tape recorders as a product. However, taking digital nostalgia into account, it would be logical for the company to continue the production of their older devices, albeit on a smaller scale.

Conclusion

Considering how volatile the digital industry is, it is hard to make the decision, pertaining to innovative changes that have no guarantee of having staying power. However, considering the failures of companies that chose to ignore trends, our choice for Peak Electronics would entail following the example of other corporations introducing new devices. Nonetheless, considering the power of digital nostalgia, we would also advise continuing producing older technologies for future generations.

References

Campbell, P., & Pallister, K. (2019). Netflix Nostalgia: Streaming the Past on Demand. Lexington Books.

Epstein, M.J. (2018). Adapting for Digital Survival. Strategic Finance, 99(8), 26-33.

Moorhead, G., & Griffin, R.W. (2000). Organizational Behavior: Managing People and Organizations. Houghton Mifflin College.

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