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SITUATION ANALYSIS
Situation Analysis
Terracog was a successful privately held firm specializing in high quality Global Positioning system and similar products.
Even though TerraCog was always not the first to market new products, the company did not have any problem in capturing the market as the products were of high quality and effectively addressed customer needs.
When a competitor, Posthaste, introduced a GPS prototype called BirdsI that displays satellite imagery, TerraCog did not see any threat, which proved to be wrong. By the time TerraCog realized their mistake in judging BirdsI, the product was a huge success.
In order not to lose the market, TerraCog also plans to launch a GPS with satellite imagery dubbed Project Aerial.
As the product was to be launched without any delay, a redesign within existing GPS platform was proposed. However, the projected costs threaten to scuttle the project.
Sales team headed by Ed Pryor feels the new product Aerial should be priced below $425 to capture the lost market share to the competitors. As per the estimate of pricing team, price for sale would, at the minimum, be $475.
The price is quite too high for the sales team to consider. The key unit managers gather in a pair of contentious meetings that feature anger, finger pointing, blame and bewilderment, but produce no effective conclusion.
The responsibility of pushing the group towards a decision lies with Emma Richardson, a newly promoted Executive Vice President of the Company.
Should Emma Richardson go ahead with the Project Aerial or not ???
PROBLEM ANALYSIS
PROBLEM DEFINITION
No clear Agenda
Short-sightedness
Lack of enthusiasm
KEY PROBLEMS ??
Key Problems
and positioning
Inter
group conflict
DECISION ANALYSIS
Pros
Immediate market presence (BirdsI Decreased margin and Garmin already there) Capture sales for holiday season
Pros Cons
Surpass Competitors
High risk
Missing holiday sales season
Cancel product launch completely Focus and capitalize on growth in cycling and fitness GPS applications.
Pros
Cons
May be too late to change the development process There may be no solution to some problems Could be highly priced from customers perspective
Plan of Action
We recommend DECISION 2 Cancel product launch for now. Companys USP is the quality it offers. It should not compromise on that even if it lags in launching the product.
If decision 1 is chosen,
Very low margins May fail to reduce the cost of the product Ultimately drive it into losses.
If decision 3 is chosen,
The project is abandoned TerraCog will completely lose the Satellite Imagery GPS Market Hamper companys image.
If decision 4 is taken
the companys customers may perceive the product to be highly priced with compromise on speed, as compared to competitors.
Do a proper market research to identify gaps between what is offered and what is desired. Decide on a common goal and vision. Recreate and redesign a new product with major reconfiguration and moldings i.e. focus on positioning. Executives should start encouraging and motivating their teams. Make them realize the importance of launch of this product
Emma Richardson should start working one on one with Team Leaders to address underlying agendas. She should start acting as a mediator and a common link for communication between various departments. This would ultimately lead to launch of a perfect product which would not only enhance companys image but may also help it recapture its market share.