Configuration FAQs

Click on a link below to access that FAQ (frequently-asked question) topic.


Bandwidth
Configuration and Call Center Activity
Early Minor Reconfiguration and Patent Royalties
Financial Implications of No Warranty
Focused Reconfigurations
Late-Stage Reconfigurations
Multiple Patent Violations
Packaging and Failure Rates of Sub-Assembly Components
Patent Royalties
Patent Royalty Payments: One-Time or Continuing?
Product Quality Perception Variations Across Regions
Raw Materials, Set-Top Box Configurations, and Product Quality
Region-Specific Configurations
Warranties and Sub-Assembly Component Failure Rates




Bandwidth

“How should I think about bandwidth in my set-top box product configurations? What does 'terahertz' really mean?”

Bandwidth is a 'more-is-better' product attribute. Terahertz is just a industry-specific generally-accepted metric describing the bandwidth performance of a set-top box product. Customers will always prefer more bandwidth, but they might or might not prefer it enough to offset your additional costs of engineering in higher bandwidth levels to your products. You need to conduct appropriate research to assess customer preferences for higher bandwidth levels and then compare that preference to your input costs of providing higher bandwidth.

revised 08/18/2005
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Configuration and Call Center Activity

“Does product configuration impact call center activity? Are some product configurations more service prone than others?”
Generally speaking, set-top box configuration doesn't impact call center activity in the sense that all configurations are equally service prone. However, there are important exceptions to this generality. Please view this video for details.

revised 05/04/2018
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Early Minor Reconfiguration and Patent Royalties

“If we reconfigure immediately by just one "unit" (e.g., change Bandwidth by 1), what are the patent royalty implications?”

Such a minor reconfiguration would violate all other firms' existing patents (in that category), since all firms' products are initially configured identically (in each category). Thus, there would be substantial patent royalties to pay with such a minor reconfiguration. Please refer to your LINKS participant's manual for specific details about patent royalty violation costs.

revised 10/08/2002
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Financial Implications of No Warranty

“What are the financial implications associated with not offering a warranty (i.e., of setting warranty equal to zero for a product)?”

There are no financial implications associated with not offering a warranty (i.e., of setting warranty equal to zero for a product). A warranty level of zero reduces upfront product costs and also reduces the downstream costs associated with replacement parts demand. Replacement parts demand doesn’t exist if warranty equals zero. Of course, end-users might view such a product configuration as less attractive than other competing products offering warranties.

revised 05/13/2002
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Focused Reconfigurations

“Can we focus a product reconfiguration on the customers in a particular channel and/or region?”

Yes, you can focus a reconfiguration on a particular set of customers. However, please remember that each of your products has a single configuration across all channels and regions. By focusing your product reconfiguration on some customers, you may be providing a less desirable product configuration to other customers in other channels or regions. Each product has one and only one configuration; products do NOT have separate configurations for different channels and regions at the same time.

revised 03/23/2000
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Late-Stage Reconfigurations

“Is it wise to configure in the late stage of LINKS?”

Your perspective should be long-term, continuously trying to improve the overall state of your firm. If it’s appropriate to reconfigure for business/competitive reasons, do so regardless of how "late" it seems to be in LINKS. Manage your business for the long run. Besides, you probably will be making a final presentation at the end of LINKS, and it’s always appropriate to be able to discuss how you’ve continued to improve the competitive position of your firm even in later simulation rounds.

revised 09/11/2013
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Multiple Patent Violations

“What happens if a reconfiguration violates more than one pre-existing patent?”

Patent royalties are paid for all patent violations at the standard rates described in the LINKS participant's manual. They are not pro-rated or shared if multiple patent violations occur.

revised 09/09/2004
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Packaging and Failure Rates of Sub-Assembly Components

“Does a higher "grade" of packaging reduce the failure rates of sub-assembly components?”

Yes.

revised 05/13/2002
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Patent Royalties

“Do we have to pay patent royalties of any kind if we copy a competitor’s product when we reconfigure?”

Yes, patent royalties exist in LINKS. Please refer to the LINKS participant’s manual for details about patent royalties.

revised 09/22/2004
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listed under "Financial and Operating Reports"
listed under "Product Development"
listed under "Reconfigurations"





Patent Royalty Payments: One-Time or Continuing?

“Are patent royalties payable only once, at the time of reconfiguration, or are there continuing payments as long as a patent violation exists?”

Patent royalties are payable once only, at the time of reconfiguration. There are no continuing payments.

revised 09/22/2004
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listed under "Financial and Operating Reports"
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Product Quality Perception Variations Across Regions

“Why do product quality perceptions vary across regions? After all, it's the same product everywhere (i.e., same configuration and same sub-assembly component failure rates).”

You are correct that a single set-top box product only has one configuration anywhere it is sold. Failure rates for a single product should be similar across regions, subject to typical random variations. However, customer preferences may vary across regions (and, potentially, across channels too). Thus, preference for particular configurations don't have to be identical from region to region. And, customers' dispreference for failure can also vary across regions, with some regions being characterized by customers who are more or less concerned with product failures.

revised 09/12/2013
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Raw Materials, Set-Top Box Configurations, and Product Quality

“What's the best level of alpha and beta to use in set-top box configurations? How do our alpha and beta levels affect the quality of our set-top box products?”
You’ll need to conduct appropriate research to assess customers’ preferences for alpha and beta in set-top boxes. Please view this video for details.

revised 04/26/2018
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Region-Specific Configurations

“Is it possible to have a region-specific configuration?”

No, a configuration is the same in all regions. Each of your brands may have only one configuration at a time.

With varying customer preferences across regions, the implication is that trade-offs may be required in meeting customers' heterogeneous preferences. It is, of course, possible to target a brand's configuration toward the preferences of particular customers. But, that might be to the detriment of other customers in other regions who prefer alternate configurations.

revised 04/06/2000
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Warranties and Sub-Assembly Component Failure Rates

“Does having a warranty (i.e., warranty>0) reduce the failure rates of the gamma, delta, and epsilon sub-assembly components?”

No. Warranties exist to reduce the risks that end-users face with products that fail shortly after purchase. Warranties don't reduce the failure rates of set-top box products or of any set-top box product’s sub-assembly components.

revised 10/20/2004
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