Case OSD 7 – Opening the Valve

All these years, Valve was able to succeed in his business because the company's strategic
intent did not change. The company also used the Differentiation strategy to always find
innovative solutions whenever there was a slowdown in sales or demand for the product they
designed. The company's organizational structure is another unusual framework we're not
going to find easily, a flat hierarchy where every employee feels like Valve is their own
company. This will help to achieve great results, because when the employee takes ownership
of the company, he will do so for the company's success. He would take pride in any
successful result and hence gives his best performance, where as in other organisation
structures, there is always a boss who monitors the worker and this fear of the boss/ or any
evaluator will drive the performance of the company. However, Valve had a very open
approach, and made sure it employed the right people into the firm, by keeping in mind the
‘T-shaped’ approach. Also, technically, the open architecture of PCs was a great advantage
for Valve so that it never had to focus on the hardware while developing game consoles.
Now, the customers are looking for a new advancement in the technology such that they could
play the games in the living room around their friends and family, instead of shifting to the PC.
This requires Valve to shift towards hardware development to meet the consumer requirements.
Valve has been successful in the small projects of hardware cabal, but they were sceptical about
producing high fidelity project. Considering the challenges involved and the threat it poses to
the current open structure of the organisation, Valve should start with producing only
prototypes for hardware products and then outsourcing the production part to existing hardware
companies. Then, gradually Valve can adopt the Analyzer approach when it starts producing
its own hardware. This approach is basically balancing efficiency and innovation, where the
employees are flexible to new ideas and research, but also have a stable product line for tight
cost control.
So, Valve can launch its prototypes through other hardware companies, for the initial period of
time, like a contract period. By then, develop the production capability for the project and start
producing by itself after the contract period, when it knows the customers response to the new
technology is positive and successful.

Submitted by:
Prashant kumar(P40193)