Outsmarting local competition wins global recognition

Outsmarting local competition wins global recognition

The late Speaker of the U.S. House of Representatives Tip O’Neill once said, “All politics is local.” Rigol Technologies, a Beijing instrument maker, may have written that statement’s corollary: “All business is local.”

Founded in July 1998, the company launched its first product — a virtual oscilloscope designed to work with a PC — in less than a year. Its success led the company to develop complete, standalone oscilloscopes as well as to branch into other instrument-related areas. In 2006, the company introduced the DS 1000C digital storage oscilloscope, which won wide acclaim in China.

The scope was a breakthrough for Rigol, providing a small form factor, deep memory, wide bandwidth options, and low price. And its success also brought a common form of flattery: imitation. By 2007, Rigol was the No. 2 DSO manufacturer in China, producing over 40,000 DSOs a year. The same year, copies of the scope from a few Chinese manufacturers also began to appear. In China, where intellectual-property protection is still maturing, the practice of “knocking off” someone else’s design was common. (Rigol has since successfully sued the copyists.)

The rapid copying of Rigol’s products made the company examine its business strategy. Getting out of the low-end market was not really possible, given the importance of the education market to Rigol’s current and future business plans. The other possibility was to find a technical way to distance itself from the copyists. Wang Yue, the founder and president of Rigol, as well as the key system architect for most of the company’s major instrumentation platforms, decided to use Rigol’s R&D resources, buying power, and low manufacturing costs to create a product that even those who copied it couldn’t undersell.

Because Rigol uses off-the-shelf components, it is the world’s largest purchaser of commercial ADCs and other DSO parts. So it used this purchasing power to reduce parts costs. Believing it could double volume again as it pushed price down, the R&D team set out to create a fast turnaround project with a one-year product design cycle. The manufacturing team created a way to increase volume at little extra cost and at an overall lower average cost.

The result was the DS 1000E product group. The line not only is succeeding in its home market, but in Europe and the Americas as well.

Richard Comerford