The company also being part of the selling business, which includes several kinds of businesses: 1. Computer dealers: focus on a few main brands of hardware, usually offering only a minimum of software, and variable amounts of service and support. These are usually old-fashioned, that is1980’s style computer stores which usually offer relatively few reasons for buyers to shop with them. Their service and support is not very good and moreover charge higher prices. 2. Chain stores and computer superstores. These include major chains such as CompUSA, Computer City, Future Shop, among others.
They usually have more than 10,000 square feet of space, and offer decent walk-in service, and are often warehouse-like locations where people go to find products in boxes with very aggressive pricing, and little support. 3. Mail order. The market is served increasingly by mail order businesses that offer aggressive pricing of boxed product. For the purely price-driven buyer, who buys boxes and expects no service, these are very good options. 4. Others. The industry has other channels through which people buy their computers, thus a variations of the main three types. a) Industry Participants
The national chains are growing rapidly. For instance CompUSA, Computer City, Incredible Universe and Babbages. This growth has been attributed from national advertising, economies of scale, volume buying, and a general trend toward name-brand loyalty for buying in the channels as well as for products. The local computer stores are threatened. These are small businesses, owned by people who started them because they liked computers. They appear to be under-capitalized and under-managed. Margins are squeezed as they compete against the chains, in a competition based on price more than on service and support. Market Analysis
The home offices in New York City are an important growing market segment. From the recent research in U. S. A. Majority of home offices are growing at 9% per year. Focus HighTech. Com estimate in its activities for the home offices in the market service area to improve. Home offices include several types. The most important, for Focus HighTech. Com focus, are the home offices that are the only offices of real businesses, from which people make their primary living. These are likely to be professional services such as graphic artists, writers, and consultants, some accountants and the occasional lawyer, doctor, or dentist.
There are also part-time home offices with people who are employed during the day but work at home at night, people who work at home to provide themselves with a part-time income, or people who maintain home offices relating to their hobbies, Focus HighTech. Com has declared that it will not be focusing on this segment. Small business within our market includes virtually any business with a retail, office, professional, or industrial location outside of someone’s home, and fewer than 20 employees. Focus HighTech. Com estimate 20,000 such businesses in our market area.
Strategies and Implementation Summary 1. Emphasize service and support. Focus HighTech. Com should apply the IS/IT strategy to assist it in differentiating itself from the box pushers. They need to establish their business operations, offering a clear and viable alternatives for their target market, to the price-only kind of buying. 2. Build a relationship-oriented business. Build long-term relationships with clients, not single-transaction deals with customers. 3. Focus on target markets. Focus HighTech. Com need to focus on offerings on small business as the key market segment we should own.
The companies values, training, installation, services, support, knowledge have been differentiated in their segment. 4. Differentiate and fulfill the promise. Focus HighTech. Com can’t just market and sell service and support without placing their value chains in place, they must also deliver as well. They need to make sure they have the knowledge-intensive business and service-intensive business they claim to have. a) Marketing Strategy This is the core of the main strategy, it should make use of the IS/IT strategies as it involve; a) Emphasize service and support b) Build a relationship business
c) Focus on small business and high-end home office as key target markets Pricing Strategy Focus HighTech. Com must charge and apply IS/IT strategies appropriately for the high end, high quality service and support they offer. The company revenue structure has to match their cost structure, so the salaries they pay to assure good service and support must be balanced by the revenue they charge. The company should deliver and charge for service and support. Training, technical service, installation, networking support among others should be readily available and priced to sell and deliver revenue.
Promotion Strategy Focus HighTech. Com highly depend on newspaper advertising as their main way to reach new buyers. As company change strategies, they need to change the way they promote themselves: i. Advertising ii. Focus HighTech. Com will be developing their core positioning message: “24 Hour On-Site Service – 365 Days a Year With No Extra Charges” to differentiate their service from the competition. The company has promised to use local newspaper advertising, radio and cable TV to launch the initial campaign. iii. Sales Brochure iv. Focus HighTech.
Com collaterals have to sell the store, and visiting the store, not the specific book or discount pricing. v. The company should improve their direct mail efforts rapidly, reaching their established customers with training, support services, upgrades, and seminars. vi. It’s time to work more closely with the local media. Focus HighTech. Com willoffer the local radio a regular talk show on technology for small business, as one example. Sales Strategy a) The employees/staff need to sell the company, not the product. They should sell Focus HighTech.
Com, not Apple, IBM, or Compaq, or any of their software brand names. b) They should sell their service and support. The company need to serve their customers with what they really need. References 1. Ricahrd, C. G. (1999), Business Management, London: Rout ledge& Kegan Paul. . 2. Davidson. J, (1999). International business, 4th Ed. Nairobi: East Africa publisher: 3. Daniel, M and Peter, N. 1996, Business-to-Business Marketing, New York: Palgrave Macmillan 4. Henry Stewart; Journal of Database Marketing: The Magic of Business-to-Business Segmentation (2003) vol. 10. 3: Henry Stewart Publications.