Executive summary
Innovation Computers is a multinational information technology company located in the United States of America. The company mainly deals with the provision of computer-related services, both software and hardware development and innovation of computing technology that are frequently used by large enterprises, small and medium-sized enterprises, education sectors, healthcare facilities as well as individual customers. Innovation Computers usually carries out regular research on an annual basis on the available and new markets through its professional team of researchers alongside evaluating the amount of funds needed to venture into new markets.
Therefore, it has always been on the forefront towards seeking the best method of serving its customers and how to develop its business portfolio. Besides, Innovation Computers has demonstrated significant influence in the market both in the United States and globally. In order to keep up with the changing business environment, the company has improved the quality of its products. The latter strategy has significantly boosted its brand and image in the global market and other new market segments and therefore earning it immense profits.
The company has also been devising effective business strategies that target specific timeframe, volume of production and price s of products. These strategies have immensely improved the overall performance of the organization. In addition, its successful participation in the global market has become one of the development strategies that Innovation Company intends to carry out in order to increase customer preference, profitability and sustain competitive advantage.
To date, the company has been able to devise marketing strategies that have assisted it to move forward into new market segments, enhance demand for its products and overcome diverse challenges related to growth, competition, cost containment, personalization and differentiation that have affected it over the years
Description of business and industry
Innovation Computers is a multinational company that plays a leading role in providing its customers and other businesses variety of quality products and efficient services which include Information Technology (IT) infrastructure and modern computing technologies. Besides, Innovation Computers also offers global services in imaging, personal computers, printing and accessory devices. Since the company is located in the wider North America, it has acquired an immense market base beyond the local US market borders.
To date, the company has expanded to Asia, Europe and Australia, and also improved its provision of products and services by coming up with new and innovative ideas in the field of computing. Its market share and industrial concentration is high. This is due to its marketing strategy of product differentiations and the ability to raise and lower its commodity prices. Although it is faced with threats of products substitutes from outside the company, Innovation Computers overcomes the challenges of accessory substitutes by making frequent replacements
The company has witnessed significant growth in its market share that has been accompanied by success in the business. This has been accelerated by innovation. In addition, its focus on innovation has attracted many other great and successful companies in its trading portfolio. This has been attributed to the adaptive enterprise and corporate marketing strategies which provide the type of technology and services as well as the efficient marketing practice to apply.
Industry overview
Innovation Computers is a multinational informational technology company in the US which provides services, solutions, software, technology and technological products to large enterprises, small and medium-sized enterprises, education sectors, healthcare facilities and customers. Presently, the company sells and distributes products like computers for businesses and homes, servers, digital cameras and printers. Besides, it supplies software and hardware, support, implement and design IT infrastructure.
SWOT Analysis
Strengths
Innovation Computers has shown a great influence in the market both in the US and globally. Since its inception in 1993, its position in the competitive global market has been increasingly becoming strong. For instance, the company closed its market shares at $53.15 in April last year. Also, a report from the NASDAQ indicates that in the previous year, its strength in terms of brand profitability was witnessed by immense demands of its products by companies such as Travelers, Mercedes and Workhorse as indicate in figure 2.
Since 2006, Innovation Computers has steadfastly kept rising in the market sector and in the year 2008, it rose above shark and Galileo Companies, which were before PC leaders in the PC market (See Appendix I). Secondly, Innovative Computers brand and image is well recognized and prominent both in the US and in the international market.
Turskis, Zavadskas and Peldschus (2009) posit that the influence that a good brand has in the market plays a pivotal role in marketing a business, improving sales and increasing profitability. Therefore, to keep up with the changing market environment, Innovative Computers adjusts its brand to cover a broader market area than just a segment of one business and another earning it immense profits (see appendix II).
Weaknesses
Although Innovation Computers has displayed its strength in the market in quite a number of ways, there are some sections in the provision of products and services that are not felt in the market.
For instance, its major competitors like Constellation PC and Shark Computers major are providing managing consulting services and other software products that Innovation Company does not. This has made the company’s presence in the market not to be strongly felt as compared to its competitors. However, Innovative Computers is in the process of addressing this problem through formation of partnerships with consulting companies like Thomson eXimius.
Opportunities
Innovation Computers Company has been able to use the available opportunities in the market to improve its offerings of products, technologies and services. To begin with, it has increased its provision of IT services in the market and made its presence to be felt in the cloud computing market. Secondly, the company is planning to expand imaging and printing solutions portfolios. Its expansion strategy include growing imaging solutions segment from print services in the commercial markets to new growth opportunities which involves printing in areas such as outdoor signage, industrial applications and graphic arts.
Threats
Innovative Computers has been faced by diverse threats both from the local and international markets. There has been a decrease in demand for certain IT products in the market a factor that is feared may grow in the coming years. This decrease might impact negatively on Innovation Company even though demand for its products is at the moment still high.
In addition, the information technology segment among other markets segments is faced with a threat of economic slowdown. This may tremendously affect global markets and more so impact negatively on this company. In 2009 the global spending was predicted to have declined by 4% in the IT market and this figure has since then been increasing.
Secondly, Innovative Computers is faced with the concerns of a fast growing hyper competitive global market environment. Its strong competitors include companies like Synergy, Galileo and Shark. It is worth noting that Shark Computers has remained a formidable competitor of Innovative Computers despite this company overtaking it in sales and demand for products.
Market opportunity analysis
Innovation Company has been able to devise marketing strategies that have assisted it to move forward into new market segments, enhance demand for its products and overcome diverse challenges related to growth, competition, cost containment, personalization and differentiation that have affected it over the years. Strategic management scholars indicate that different businesses have diverse strategic orientations in marketing that reflect in the manner in which they are willing to organize their control mechanisms, prioritize resource allocations and take risks.
Innovation Company analysts indicate that the company’s effective marketing strategies have enabled it to move forward in its strategic sectors like developing of quality computer machines and software. In its marketing strategies, the company has implemented flexible practices, reengineered its marketing processes and eliminated inefficiencies in managing production, inventory, handling logistics and managing its products as a business strategy to grow locally and globally.
Market profile
Devising effective business strategies that set effective timeframe, volume and product prices which improve the overall performance of an organization and its successful participation in the global market has become one of the most burning ambitions that managers in companies that intend to increase customer preference, profitability and sustain competitive advantage have assumed.
As business in the local and international market is becoming more diverse and competition increasingly intense, Innovation Company has formulated an effective market profile to determine prices of its products. It has selected markets in the US, Europe and Australia, a move that has turned out to be one of the effective ways in which it has been able to compete favorably.
Customer profile
It is worth noting that Innovation Computer Company is involved in production of products and services in large scale. As a result, in order to narrow down its wide customer base and reach only the potential ones, the company has a developed a customer profile.
Even though it has a large customer base, the company’s management explains that it is able to concentrate on production marketing and advertising and therefore focus on cost reduction and quality. Scholars argue that by concentrating on a smaller unit, all the procedures become easier to focus on and therefore maintaining a highly responsive unit to consumer demands and market dynamics.
Key competitors profile
Innovation Company has over the years been effective and efficient in offering quality products and services to its customers due to the high competition it faces from other giant competitors like Shark and Galileo Companies. Zavadskas, Turskis and Tamosaitiene (2010a) point out that without competition, a company may lack incentives to provide best and quality products to consumers. Indeed, competition enhances efficiency and offering of quality products and services which is what most customers require.
However, too much competition in the global business arena hinder has hindered the company from making maximum profits, research and development as well as technological development. In addition, competition has forced the company to lower its prices so as to stay in business. This has in turn affected its ability to maximize profits. As such the company has sought to understand its competitors profile and determine its sales and shares as indicated by the figure below.
Due to intense competition in the global market today, many businesses have resorted to develop certain competitive moves to aid them gain competitive advantage and still sell at low costs. Selih et al (2008) point out that over the years global strategies for most multinational companies have revolved around competitive moves across countries.
Innovation Computers has been able to expand its market segments and penetrate in different countries including the US, and establish itself as a computer company. Research indicates that its effective global strategy via competitive moves has been properly strategized by its management team. Selih et al conclude their argument by exemplifying that effective strategies are vital as by moving across countries, a business enhances its bargaining power and save cost since costs vary in different location.
Marketing plan and sales tactics
Developing a global marketing strategy has become an important requirement for multinational businesses that are set to achieve benefits in terms of growth and profits. Setting up of a global strategy requires a business to focus on key dimensions such as competitive moves, marketing approach, value added activities, product offering and market participation. Kaplinski and Janusz (2006) argue that integration and sharing are key components of a global strategy that maximizes the performance of a business in international markets.
Innovation Computers has been able to diversify its product offerings and establish a good business brand in the US and Europe. Its quality brand and good reputation have given it an opportunity and an advantage and made it to transfer its products to developing and developed nations. It is impetrative to point out as exemplified by Innovation Company that in order to enhance a global business strategy, an organization must incorporate a multi-domestic strategy since this maximizes a business’ local profits, revenues and competitive advantage. This in turn will aid it in enhancing its worldwide performance.
Kabadayi, Eyuboglu and Thomas (2007) point out in their publication, the performance implications of designing multiple channels to fit with strategy and environment that a global strategy, unlike a multi-domestic strategy developed and tailored to work locally, focuses on applying a uniform market approach worldwide. Agreeably, companies can achieve huge successes by adopting a particular marketing approach. However, it is imperative to point out that within a marketing mix, not all elements must be uniform.
For instance, Innovation Company’s success has not only been brought about by adopting a common computer logo, advertising theme and market positioning for its appliances, but by also using different brand names for the product depending on a market segment. Zavadskas et al (2008) concur with Kabadayi, Eyuboglu and Thomas’s arguments, but point out that an effective market approach should take into account that inasmuch as a uniform marketing approach is a key global business strategy, market segments and marketing environments are also important components that should be considered.
Research and development
Each year, Innovation Computers through its professional team carries out research on available and new markets, the amount of money needed to venture into the market and how best to serve its customers and how to develop its business. Innovation Computers Company intends to invest up to about four billion dollars each year for the purpose of research. It has been able to get into new markets and offer better products and services through its inventions of solutions and new technologies and a variety of products.
The investigative activities as well as research and development (R&D) that Innovation Computers carries out in terms of products to achieve greater performance has been on marketing and value addition platforms. It is instructive to note that both platforms deal with products such as computers and other related hardware and software. The company has used its strategic marketing and technology as tools to reduce production and development cost, and to create economies of scale. As indicated earlier, the company has used over US$ 40 million for research as well as to improve its products and technology.
Besides marketing and value addition, another area of research has been on creating new products, technology and improving on the existing products. This research will cost the company up to US$ 70 million. Finally, to expand and advance their technologies, the company has embarked on corporate research on strategy and engineering based on dynamic performance, life-on-board, environment-CO2 and safety. Concerning the latter, the company has turned its focus on safe electric machines as a strategy on zero-emission technology products.
Product line
Production strategies in Innovation Company have been made efficient through its management team that carefully control manufacturing and procurement processes so as to ensure that excellent and high quality products are manufactured. It is imperative to note that most of its products are made and exported from the US.
Due to this, the company has set up strategies that ensure all its production facilities are efficient and its operations effective. Goetschalckx and Fleischmann (2002) point out that like many other computer and technology companies across the world, the company faces numerous manufacturing challenges, but manages to be successful due to its business strategy of managing and owning full scale operations,. Those operations encompass distribution, manufacturing and design.
In the market segment, products and services produced by Innovation Computers like computers, printers, hardware and software have been recognized by its customers all over the world in terms of value and quality. The 15% improvement on productivity by Innovation Production System (IPS) has borrowed extensively from research it has carried out on quality. As such, the company has come up with an integrated manufacturing system (IMS) that it has used to produce computer and IT products which it has then distributed to markets in America and outside America in areas such as in Spain, Mexico and South Africa. On the other hand,
Distribution
Using an efficient international distribution channel has become an important element of strategic management and a key component in supply chain development that ensures unimpeded and safe provision of products in the markets. Scholars on logistics science point out that there are diverse supply channels in today’s economy that move products from industries into the global market. Ustinovichius, Zavadskas and Podvezko (2007) point out that a distribution channel that a business adopts must be effective in ensuring that products are moved from sites of productions to where they are consumed. Various theories such as the general trade theory, organizational supply management theory and congruency theory almost unanimously agree that an efficient international distribution channel maintains intensity, low costs, demand flexibility, process capability, strategic risk and competitive advantage.
Exclusive distribution
Scholars of supply chain and logistics argue that practicing constraint is an important aspect in international distribution channel that ensures greater availability and limited losses during a distribution process. Borrowing from the theory of constraints developed by Eliyahu Goldratt, it is worth noting that by severely limiting intermediaries in a distribution channel, a company can maintain service outputs and control service levels that resellers offer. Zavadskas et al (2010b) point out exclusive distribution minimizes costs and maximizes channel control and goodwill.
In agreement, Zagorskas and Turskis (2006) point out that a satisfactory and complete relationship between a producer and an intermediary in an international distribution channel is made easier when intermediaries are few in a given area than when they are many.
Innovation Computers has over the years used exclusive distribution in its market segment outside the US for the purpose of reducing costs. Exclusive distribution involves dealing arrangements that are limited and restricted in which an agreement is made by resellers not distribute competing brands. As such, through exclusive distribution, producers obtain knowledgeable and dedicated selling of products such as cars and other capital goods.
The channel of producer to an agent to a wholesaler, retailer and to a consumer
Innovation computers is seeking to enter fresh markets in Asia and has therefore adopted a producer to an agent to a wholesaler, retailer and to a consumer channel that moves products and services from a producer to a distributor who then supplies them to a wholesaler. Products from the wholesaler are then distributed to retailers where consumers finally access them.
Ginevicius and Podvezko (2009) point out that this is an efficient distribution channel in the international market as it saves time and allows for investments in terms of money. It is because the task of selling products is delegated to distributors or agents by an exporting company. As such, retailers or wholesalers are contacted by an agent represent ting a company who then sells products and receives a commission. It is imperative to point out that a distributor in this channel can be an independent company that buys a manufacturer’s products then uses the exporters or its own brand name to sell the products.
Financial plan
Though numerous methods of performance management exist, there lacks a consensus on the most effective model that organizations should take in planning for finances. However, Bivainis and Zinkeviciute (2006) argue that organizations take the models that have the ability to give them precise results and generate clear models of improvements.
Bivainis and Zinkeviciute further give the example of balanced score card benchmarking which is used by institutions of leaning to determine achievement of different standards. The balanced score card is also increasingly being preferred for its comprehensiveness and wide applicability. The latter is based on assessment of four indicators that determine the ability to assess organization’s progress in line with its goals; learning, customer perspectives, business processes and financial growth.
One of the best ways in which a business can effectively sustain and maintain its growth in the competitive market is by ensuring that it sets up an efficient financial plan and seek new market opportunities through its brand. Antucheviciene, Zavadskas and Zakarevicius (2010) point out that with developments in globalization, consumer’s tastes and preferences as well as behavior are increasingly changing and this greatly impacts on the performance of a business. It is on this front that Innovation Company has sought to maintain its presence in the market through sustaining a brand of quality and innovative products.
Besides, research indicates that consumer behavior in the US as well as in Europe is changing faster, and this massively impacts on businesses in this market. Even though consumers of Innovation Computers products and its retailers in the market have regarded its commodities as the best in America compared to its competitors, changes in the market affects its sales and forces it to sell at a relatively low price. Therefore, it is has developed a comprehensive financial plan for research and development, to improve on existing products and to seek new opportunities of winning the loyalty of its customers through creation of new and innovative products.
Conclusion
To sum up, the discussion has focused on Innovation Computers Company whose products and services includes provision of IT infrastructure, modern technologies and solutions, imaging, personal computers, printing and access devices. From the analyses, the company faces stiff competition from its competitors and has there expanded its market activities to new regions. In addition, the company has invested in research and development to enhance organization learning, bring into play innovation and seek improvement of brand quality.
References
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Appendices
Appendix I
Appendix II
