Terracog Global Positioning Systems Case
TerraCog Global Positioning Systems Case
1. What causes underlie the current situation that faces Emma Richardson?
TerraCog’s competitor Posthaste is leading the market with their BirdsI product which produces actual satellite images. TerraCog is losing shares and now struggles to catch up with the new trend in GPS.
An impasse between the production, sales, and design teams on the price point of Aerial is blocking its debut to the market.
The launch of Aerial lies in the hands of Emma Richardson; under Richardson previous issues with inventory and quality created significant tension between U.S. headquarters and production in China. The pressure is on for Richardson to launch Aerial successful and she must bring production, sales and design teams to come to an agreement.
The cost to produce the Aerial is too high and the only way to still make a profit on it is to sell it at a higher price than their competitors, which is really hard to do.
They are unable to reduce production costs and so there is an unfavorable trade off between proposition and price.
Besides the price constraint, there is also a time constraint. They need six more months for quality purposes, but do not have that much time.
Short sightedness and lack of common vision, an intergroup conflict, and lack of clarity on price and positioning along with a hurry to enter the market.
2. What are the strategic and organizational implications for each of the company’s options?
One option to meet the selling point is to minimize production costs but sacrifice performance.
Go to market with current prototype: increases the selling point beyond what the market will bear. Customers may not buy