Computer Company Business Plan
Essay Preview: Computer Company Business Plan
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Current Market Status
Target Markets and Brands
XYZ analyzed available market research data to identify target segments that would be profitable and fit with our strategy. As a result, we identified three initial target markets – the Cost Cutter, Workhorse, and Traveler. Use patterns and demand data for these customer segments are shown in Appendix A.
Customers in the Cost Cutter segment desire an economical product – essential, easy-to-use functions at a low price. We have developed the Charger brand for this market – a nicely equipped model, yet the lowest priced in the industry. Our efforts to provide an affordable model have awarded us 69 percent of the market share for this segment. This market is attractive because of its high demand and high margins. The cash flows we are generating from the Cost Cutter market are helping us fund manufacturing and sales office expansion.
Customers in the Workhorse market are looking for more functionality than the Cost Cutter market, but still at a reasonable price. Like the Cost Cutter, this market offers high demand and even higher margins. We have designed the Trojan model for this market. This product has more functionality than the Charger model, and also carries a higher price tag. However, the Trojan is still one of the lowest priced models in the industry. We currently hold the second largest market share for this segment, at 30 percent.
Traveler customers are looking for a portable computer with mid-range functionality and price, similar to the Workhorse. Even though the demand in the Traveler market is significantly lower than the other markets we are competing in, we felt it was a good niche market for XYZ because customer wants are similar to Workhorse customers. We designed the Nomad for this market, a product with similar features to the Trojan, but slightly higher in price due to the additional functionality for portability and strength to withstand the rigor of travel. Customers have responded well to the Nomad, and we currently lead this segments market share at 29 percent.
At this time, we have chosen not to compete in the smaller Mercedes and Innovator markets. While the customers in these markets are willing to pay much higher prices, they are also looking for many more product features. The research and development and production costs to manufacture an acceptable product for the Mercedes and Innovator markets would be significant.
Geographic Regions Served
XYZ Enterprises started as a worldwide company and plans to continue our expansion. We built our manufacturing facility in Brazil to take advantage of low production costs. We also began operations with a Web sales office in Brazil and have recently opened brick and mortar sales offices in the countrys two largest cities – Sao Paulo and Rio de Janeiro. We are currently the only company competing in Brazil, and we are positioning ourselves to dominate that market.
In addition to Brazil, XYZ has sales offices in Chicago, New York and London. We are targeting cities in each region that have the highest potential demand in order to maximize the return on our sales office investments.
Competitor Analysis
XYZ is currently facing three competitors in the worldwide computer markets. These competitors are competing globally in virtually the same target markets as XYZ. A detailed competitor analysis is included in Appendix B. A summary of each competitors current operations is outlined below.
Strategic Business Solutions (SBS) is the current industry leader in financial performance and market share. They have developed products targeted to the Workhorse and Traveler markets. SBS currently has sales offices in the United States and Europe. Their current sales force is less productive than XYZ, but they have built enough operating capacity to meet much more demand than XYZ. Their additional strengths are competitive pricing and effective advertising. SBS is also experiencing low production costs with their manufacturing operations in China.
3B Computer Corporation is currently trailing XYZ and SBS in both financial performance and market share. Like SBS, 3B is targeting the Workhorse and Traveler markets. 3Bs manufacturing facility is located in the US, and they have sales offices in the US and Europe. Their lower performance can be attributed to higher production costs and fewer sales offices than the competition.
Innovation, Inc. is currently trailing all other companies in the industry in both financial performance and market share. Innovation is targeting two markets with lower demand – Traveler and Innovator. They have built their manufacturing operations in the US and have placed sales offices in the US and Europe. Innovation is trailing the other companies in the industry due to the lower demand segments they are targeting, increased production costs, and lower sales force productivity. They do have strong ratings for investment in the future, indicating that they are positioning themselves to be more competitive in future years.
Company Analysis
XYZ has developed several strengths that we will continue to maximize to help us develop a sustainable competitive advantage. These key strengths are:
Strong focus on investing in the future
Industry leader in manufacturing productivity
Among industry leaders in workforce management and productivity
In addition to the strengths outlined above, we have also identified several weaknesses that the company must overcome to be successful. Our key weaknesses are:
Workhorse is our primary target market, but our brand design does not meet minimum requirements
Brazil Web office revenue is not sufficient to cover operating costs
Stock-outs due to high changeover time for three products
Industry Analysis
By analyzing our industry, we have identified key opportunities that XYZ needs to take advantage of to remain competitive in the marketplace.
Consumer demand is increasing due to increased use of computer equipment
Lack of lower performance, lower cost brands being offered in the marketplace
Demand for computer equipment is worldwide
We have also identified several market