ACA_TerraCog GPS Case

TerraCog Global Positioning

Systems:Conflict and

Communication on Project Aerial

Sahil Nanda - 211128Sanchit Aneja - 211130

Udit Anand - 211152Vaibhav Jain - 211155

Situation Analysis

Management Organisation Chart

Name Designation

Richard Fiero President

Emma Richardson Executive VP

Becky Timmons CFO

Ed Pryor VP, Sales

Harold Whistler VP, Design and development

Tony Barren Director, Production

Allen Roth Director, Design and Development

Cory Wu Manager, Software and Firmware Design

Alice Gorga Manager, Hardware Design

TerraCog has been a trusted brand specializing in quality hand held GPS products that have loyalty among sports enthusiasts

One of its competitors Posthaste , introduced a GPS prototype called “BirdsI” that is able to display satellite imagery

TerraCog did not see any threat until it started losing competitive edge and market share to Posthaste due the success of “BirdsI”

Situation Analysis

Situation Analysis Contd…

• TerraCog also plans to launch a GPS device with satellite imagery called Project Aerial to protect its market share

• Since product was to be launched without any delay, a redesign within existing GPS platform was proposed

• This resulted in increased production costs as well as degraded quality

Situation Analysis Contd…

• Sales team head Ed Pryor feels Aerial should not be priced more than $425 as company plans to recapture the lost market share

• Pricing team quotes a minimum price of $475 leading to conflict in decision making

• Responsibility of leading the group towards a decision lies

with Emma Richardson , a newly promoted Executive Vice President of the firm

Problem Analysis

• Short sightedness: TerraCog had started losing share to Posthaste, its rival in GPS devices

• Inter group conflicts: Their project Aerial had serious issues regarding pricing of the product

Problem Analysis(Contd.)

• Lack of Innovation: There was an inherent tradeoff between their value proposition and cost

• Delayed market Responsiveness: They were already late to the market and were launching at a market premium

DECISION ANALYSIS

Decision 1

• Launch Aerial with reduced margin(as suggested by Ed Pryor) at a price of $425

• Gain consumer confidence and recapture lost market share

• Continue Redesigning and improve the manufacturing process of the product to reduce production cost

PROS and CONSPros:• Immediate market presence (BirdsI and Garmin

already there)• Capture sales for holiday season

Cons:• Decreased margin• Pressure on manufacturing and design team to

reduce product costs

Decision 2

• Cancel product launch for now

• Recreate and redesign a new product with major reconfiguration i.e. focus on innovation

• Launch the new product in the market with a “ROAR”

PROS and CONSPros:• Maintain supreme quality• Surpass competitors

Cons:• Declining market share• High risk• Missing holiday season sales

Decision 3

• Cancel product launch completely

• Focus and capitalize on growth in untapped market

PROS and CONSPros:• Early mover advantage• Under served market: Great scope

Cons:• No share in Satellite Imagery GPS market• Brand image of TerraCog at stake

Decision 4

• Emma Richardson works one on one with Team Leaders to address underlying agendas

• Arrive on a consensus for price and then launch the product

PROS and CONSPros:• Better coordination• Basis for consensus• Aligns objectives and decisions

Cons:• May be too late to change the decision process• There may be no solution to some problems• Could be highly priced from customer’s

perspective

PLAN OF ACTION

We would recommend decision one:

Launch Aerial at a price of $425 and continue to redesign and innovate

Company’s differentiating factor is in the quality of it’s products and it should not compromise on the same

Why Option 1?• If decision 2 is chosen

o Further loss of market shareo Loss of holiday season sales

• If decision 3 is choseno The project is cancelledo Terra Cog will completely lose the Satellite Imagery GPS

Marketo Affect company’s image

• If decision 4 is takeno Emma may not succeed at controlling all the domains of the

company single handedly

PLAN OF ACTION contd.

• Make a common consensus among all departments to launch Aerial at $425

• Initiate an aggressive marketing campaign• Form an R&D team to redesign the product and take

the speed factor into account• Regular meetings conducted by Emma, so that each

department is updated on the project• This would help company to maintain its image and

recapture the market share

THANK YOU!