Case | HBS Case Collection | May 2010 (Revised August 2013)

Delta Electronics Hybrid Power Train

by Willy C. Shih and Jyun-Cheng Wang

Abstract

Delta Electronics, the world's largest manufacturer of switching power supplies, hoped to enter the market for gasoline-electric hybrid power trains for automobiles by being a major component and subsystem supplier. While most public awareness of hybrid vehicles fell to the tier one integrated vehicle manufacturers, Delta felt it had an opportunity to enter the market via new automotive market entrants in China who had comparatively fewer capabilities and were willing to purchase major subsystems. Yet the company faced a dilemma -- a major customer wanted Delta to transfer ownership of key intellectual property as a condition of doing business. The case affords students an opportunity to consider whether a technological shift will enable what seems traditionally to be a highly integrated product design to shift to a modular architecture, and consider the implications for appropriability of returns.

Keywords: Investment Return; Intellectual Property; Emerging Markets; Industry Clusters; Partners and Partnerships; Electronics Industry; China;

Citation:

Shih, Willy C., and Jyun-Cheng Wang. "Delta Electronics Hybrid Power Train." Harvard Business School Case 610-098, May 2010. (Revised August 2013.)