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TerraCog GPS: Conflict & Communication on Project Aerial

Case Overview

Founded in 1977
Manufactured high-end sonar equipment
Privately held company
Introduced GPS in 1990s
Mostly with adventure sports
Exceptional product design and reliability
Not the first movers
Good feedback system
High customer loyalty

Situation Analysis

In 2006, Posthaste launched BirdsI that displayed static satellite imagery


Industry is moving towards satellite based GPS from vector based GPS
Threat to the market share of TerraCog by 10%
Conflict between management

SWOT Analysis
Strengths

Quality and durability


Loyal customer base
Brand value

Opportunities
Diversification into other equipment
and segments
Market growth potential is high
Good brand name as to recapture
market

Key Problem Identification

Lack of vision
Pricing of Aerial

Weaknesses

Slow movers
Poor forecasting
Inconsistency in vision

Threats
Delayed launch of project
Underperformance of Aerial
Lack of innovation
Low cost substitute

Solutions

Launch the product at a premium price: Aerial could be launched at a premium price
as production department has already brought down the cost to the minimum level
possible. The product could be placed as a premium offering by TerraCog in the
market.

Launch the product at lower price: Aerial could be launched at lower price and the
loss incurred in the could be seen as an investment to capture market share.
Meanwhile, production department can find ways to procure cheaper raw materials,
and improve the ways of production.

Delay the launch of the product: Aerial launch date could be pushed forward and all
the departments would work in cohesiveness to come up with a more innovative
version of Aerial which would be less in cost.

Contingency Plan

Scratch the plan of Aerial: The whole project Aerial could be scratched off. New
projects such as cycling and fitness equipment could be focused on.

Porters five forces model

(High)

(Assumed to
be low)

(High)
(High)

(Low)

Problem Tree

Underestimation of
competition

Interdepartmenta
l conflicts

CAUSES
Incorrect
marketing research

Lack of Vision

Reduction in
market share

CORE PROBLEM

Delayed launch of
Project Aerial

EFFECTS