Introduction
TerraCog was an organization that successfully represented the private business sector of high-tech industry. It provided global positioning systems (GPS) and other similar products that were always of excellent quality, which attracted a wide range of customers. The organization had never had issues with the competitive advantage and remained profitable. It adapted the products to the needs of the clients, which provided TerraCog with the opportunity to operate effectively and reach the top of the market even though its offerings were not the first ones in the field to reach the customers.
Being used to such working approach, the organization saw no threat in a new GPS prototype, which was created by its competitor. Posthaster made their product efficient, which allowed it to appeal to the clients. Unfortunately, TerraCog did not consider “BirdsI” to be a kind of GPS that can have a great impact on the representatives of the general public and turn out to be able to affect the success of the organization with its satellite imagery. As a result, this prototype became extremely profitable and highly valued by the customers before TerraCog realized that it is a threat to the company.
Trying to improve the situation, the firm decided to capture the market with its product that would have similar features as “BirdsI”. However, there is no time to prepare “Aerial” in a decent way, and the project turns out to be rather costly. Its minimum price is expected to be at least $475, which seems to be too high for the clients. Thus, Emma Richardson is asked to consider whether it will be beneficial for the organization to undertake this project or not (Beer & Yong, 2008).
Situation Analysis
Because of the tough competition, TerraCog started losing market share, which affected its position in the market adversely. As it turned out, the company failed to treat its competitors seriously and did not expect something wrong to happen until the moment it was too late. Finally realizing that something is to be done, the design team decided to create a product that would have the same additional feature as “BirdsI”. Still, such alternative requires substantial expenditures because there is no time to develop a new product decently. An expected high cost of the product will affect the margins negatively, so not all professionals are willing to undertake this task.
When considering this case, it seems that the only issue TerraCog should deal with immediately concerns the launch price of “Aerial”. However, the situation is more serious. Both departmental and individual objectives influenced the situation and led to the current state. The problem is in a poor leadership, which refers to the president and the management team.
Seniors are the ones who control everything, and they could have interfered. Another reason why the issue occurred is the inability of team members to cooperate with each other efficiently. Professionals have different views and cannot reach the compromise. In this way, the whole process of communication in TerraCog is poor. It lacks organization, which prevents the workers from being proactive. They could have discussed the appearance of “BirdsI” in the market and its potential threat.
The Problem
Leadership
The leader of any organization is expected to guide it and its members so that they always know what to do. Unfortunately, Richard Fiero turned out to be not able to do this. He could have made TerraCog react to the launch of Posthaster’s product when the situation was not yet critical. Later, the president made the decision considering the appearance of the device without consulting his team (Beer & Yong, 2008). It is possible that if the company initially adopted satellite imagery, it would not suffer from the competition so much (Fairholm, 2009). The president decided to launch the new product because the sales were affected. Still, he also should have consulted other departments to see if such approach can be company’s way-out.
Cooperation
TerraCog does not seem to have a common goal that is shared by all its employees (Beer & Yong, 2008). Each team member has a personal opinion about the things that are critical for the company. As a result, the organization cannot operate in unison, which leads to inner conflicts, spoils internal environment and makes the employees unwilling to work (Kates, Parris, & Leiserowitz, 2005).
The leaders of the sales, design and development, and production departments cannot reach the compromise regarding the current target of all operations. One wants to make compensation packages better; one considers that alternative projects should be approached instead of “Aerial” because it will not bring any success while the last one is focused on the opportunity to prove that he is still able to achieve good results.
Communication
The company does not have any communication patterns. It is a critical problem that deals not only with the way employees treat each other in both personal and professional aspects but also with the way this process is organized and encouraged. The meetings are not organized decently, as they lack fixed agendas that could be followed by all members to make sure that the issues, which are on the front burner, will be discussed.
In the same framework, the most vital information is not transferred decently. Those goals that professionals have and that departments are trying to reach do not align with the organizational ones. As a result, the company cannot streamline the process of reaching a particular target and pays equal attention to various goals at the same time, which is rather distracting (Banihashemi, 2011).
The Options
In order to improve the situation, TerraCog can try several options:
1) Launch the product as planned. The company can reduce the margin and place “Aerial” in the market at the minimal price. It will also continue improving it to reduce costs. In this way, TerraCog will immediately appear in the market and attract the attention of the general public. It will be likely to capture sales for some period of time. Still, low margin is a problem for the company. Moreover, manufacturing and design department will be under great pressure because they will be obliged to improve the product even though it might be not possible.
2) Postpone the launch to have time to improve the product. It might be better to make a pause and to enhance “Aerial” before allowing it to enter the market. The company may focus on positioning to attract attention to the product when it appears. In this way, there will be an opportunity to enhance the quality and excel competitors. However, the market share will continue declining, and there are no proofs that the product can be improved to reduce its cost.
3) Cancel the launch. It is possible to ignore “Aerial” and pay attention to those GPS applications that already exist. The company can improve and adjust them to remain in the stable position. TerraCog will not have problems with the application of a new product. Still, it will not be able to compete with organizations that focus on satellite imagery.
4) Richardson can cooperate with the leaders to find the resolution and define the most appropriate price to launch the “Aerial” as soon as possible. In this way, the cooperation and communication problems among the leaders will reduce. But it may be already not possible to alter the development process and the price may not appeal to the clients. Except for that, some issues may remain unsolved.
The Recommendation
Considering four possible options that can be utilized by TerraCog and their influence on the organization and its current situation, it seems that more advantage will be gained if it follows the second options. In this way, the company should cancel the launch for a short period of time, during which it will have an opportunity to improve “Aerial” and define its price. If the manufacturing and design teams consider that the possibility to achieve success in this way is extremely low, they can also provide some new ideas that can be used to substitute “Aerial”.
Currently, the organization is known for the high quality of products it provides. If entering the market with the thing is not efficient, TerraCog may spoil its reputation so that the number of its customers will reduce greatly (Iwu-Egwuonwu, 2011). Thus, it will be better if the company thinks about its advantage in a long run.
Action Plan
To follow the recommendation, resolve the issue with the new product and achieve success, TerraCog should:
- Conduct a market research. In this way, the gaps between clients’ needs and company’s offerings will be seen (Venkatesan & Soutar, 2014).
- Common goals should be spread through the organization to enhance communication and reduce the number of misunderstandings among the personnel.
- Adjust “Aerial”. The manufacturing and design teams should do their best to improve the product that is already planned. It will be also beneficial if TerraCog changes its approach. They can pay more attention to the positioning, for example.
- The employees should be motivated by their leaders to achieve success with “Aerial”. In this way, they can get to know why it is so critical to place this product in the market.
- The leaders of the teams should start cooperating with each other and with Richardson for them to be able to reach consensus, resolve the issues effectively, and be proactive.
- Richardson should become a link between the departments for them to have one more an opportunity to transfer information.
If the company follow the proposed action plan, it will be likely to prepare the high-quality product, which can represent TerraCog in the market. The image of the organization will not be spoiled and can be even enhanced, which will have a positive influence on the performance. As a result, the market share can be recaptured, which is critical in the current situation when TerraCog loses its ability to remain as profitable as it was before “BirdsI” appeared. Such approach will give the company one more chance. It will help to cope with each issue found during the assessment, including problems with leadership, communication, and cooperation.
References
Banihashemi, S. (2011). The role of communication to improve organizational process. European Journal of Humanities and Social Sciences, 1(1), 14-24.
Beer, M., & Yong, S. (2008). TerraCog Global Positioning Systems. Boston, MA: Harvard Business School Publishing.
Fairholm, M. (2009). Leadership and organizational strategy. The Innovation Journal: The Public Sector Innovation Journal, 14(1), 1-16.
Iwu-Egwuonwu, R. (2011). Corporate reputation & firm performance. International Journal of Business and Management, 6(4), 197-206.
Kates, R., Parris, T., & Leiserowitz, A. (2005). What is sustainable development? Environment: Science and Policy for Sustainable Development, 47(3), 8–21.
Venkatesan, V., & Soutar, G. (2014). Market research in Australian SMEs: An empirical study. Small Enterprise Research, 9(2), 17-31.