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TerraCog Global Positioning Systems -Case Study

 

 


Table of Contents

Introduction.. 4

Background Information.. 5

Alternatives. 7

Alternative 1. 7

Alternative 2. 7

Alternative 3. 8

Alternative 4. 8

Solution.. 9

Recommendations. 10

References

Introduction

TerraCog is a high tech company which develops Global Positioning System (GPS) and similar products. This company has been in business since 1977 and since then they have built themselves as a manufacturing of a high end products.

TerraCog did not use to be first to market the new products but due to the high quality of the products it was not difficult for the firm to sustain the market and satisfy their customers needs which was all because of the high quality end products that they supply.

TerraCog has suffered from the market failure because of not realizing the entry of competitors that could win them (TerraCog).  After realizing the mistake, TerraCog set the meeting with the members of the firm but they could not come up with the concrete decision. In the report, 4 different alternatives are chosen along with the advantages and disadvantages of choosing the selected alternatives. Among the 4 alternatives, Emma Richardshon has to select the one alternative and act accordingly.

Background Information

The problem started to begin in TerraCog in October 2006 when Posthaste (one of the competitor firm) introduced BirdsI, a new GPS prototype. BirdsI displayed satellite imagery using static satellite photographs and attach them together to create one image.

When Posthaste introduced this product, TerraCog did not realize this product can bring their business down in the market. But by the spring of 2007, Terracog started noticing customers’ an inclination for a GPS with satellite imagery like BirdsI. After realizing their mistake and not to lose the market share, TerraCog started planning for their own satellite imagery GPS and named the project “Aerial”.

In spite of developing a new product, they decided to redesign their existing GPS product. For this, Emma Richardson was promoted as Executive Vice President to move TerraCog towards the greater operation alignment and to increase the cross-departmental co-operation.

The design team completed “Aerial” by the end of 2007 despite a low response from the production team. For launching the product, meetings were held among the higher member of the firm. The response from the meeting was mix regarding the pricing for the “Aerial”.

As “Aerial” was about to launch 2 years later than BirdsI, setting $550 for Aerial was too high to penetrate in the market.

Ed Pryor (Sales team) suggested the new product Aerial should be priced below $425 to capture the lost market share to the competitors.

Barren and Design team headed by Roth (Production team) suggested the price for Aerial should be $475 at the minimum.

Timmon (CFO) was conscious about the economic condition of their firm and he was not ready to set the price below $500.

Cory Wu (Manager) was not convinced with the price of  $475 because he did not think the changes were enormous.

After receiving the feedback from all the members TerraCog then set the meeting among all the key unit but in the meeting no effective decision was made.

The main problem in TerraCog was due to following things:

1.      There was no clear and specific agenda.

2.      The poor communication among executives created conflicts among groups.

3.      Lack of proper research as TerraCog was in a hurry to launch the product.

4.      Lack of common vision of all the units of the firm.

5.      Lack of proper and true leadership.

6.      No forecast.

7.      Lack of motivation and enthusiasm.

8.      Delayed market responsiveness.

9.      There was a task conflict among the groups. 

Alternatives

Below are Four alternatives from which Emma Richardson has to choose one among them and implement in the TerraCog.

Alternative 1:

Emma Richardson can launch Aerial as planned with low margin i.e. focusing on low price at $425.

If Alternative 1 is accepted: This will help build a foundation in the market again and grab the consumer confidence. There will be immediate market presence and TerraCog can capture the sales of their product.

Alternative 1 can be rejected because selling the product at $425, will not generate profit and there will be high pressure on the manufacturing and design team to reduce the product costs.

Alternative 2:

Emma Richardson can cancel the product launch for now and postpone to launch after maybe 6 months. During this time, they can recreate and redesign a new product with more focus on positioning. If they come up with a new product and they get success, that will be more than a comeback i.e. they will gain more customers very soon and they can easily penetrate the market place.

The advantage of choosing Alternative 2  is that they can maintain the quality and surpass the competitors.

Alternative 2 can be rejected because waiting for the new product and if that product do not get the market place, that can be a high risk to the TerraCog. 

Alternative 3:

Emma Richardson can cancel the product launch completely and start focusing and capitalizing on the growth of other GPS applications like cycling or fitness or any other.

If Emma decides to choose decision 3, it will be more stimulating technically to team members as well as team members will be motivated to get better in their work. This decision will help understand the market place too.

If Emma cancel the product launch completely and focus on other application, it will hamper the brand image as well as there will be no share of TerraCog in satellite imagery GPS market.

Alternative 4:

Emma Richardson can work one on one with all the team leaders and address the underlying agendas. This will help to find the suitable price of the product and then TerraCog can launch the product.

If Alternative 4 is chosen, there will be better coordination among all the members of the organization and everyone will align with the decision.

The disadvantage of choosing Alternative 4 is that it may be too late to change all the development process and it will take more time to stick on a decision by all leaders. The customers of the company may perceive the price of the product to be high compared to competitors. 

Solution

Alternative 2 seems to be an ideal solution to this  case problem i.e. canceling the product launch for now and postponing it for a few months. The company has its own brand image and the company should always stick to the quality of what it offers. TerraCog should not launch the product now because they can not compromise on what they have to offer. Customers of TerraCog are attracted due to their high-end quality products.

Recommendations:

Below is the recommended action plan after choosing Alternative 2 as a final decision:

1.      Even though, TerraCog will need more time to develop a new product but still, it can be designed with the proper research and deep knowledge so that they can identify the gaps between what is offered and what is desired?

2.      Emma has to start encouraging and motivating the teams and make them aware of how important the launching of this product is to the company.

3.      Emma has to start working one on one with the Team leaders to identify the underlying agendas.

4.      Emma should act as a mediator and start to increase the link of the communication between various departments.

5.      After proper research, deep knowledge, clear agendas, good communication, and motivation, the perfect product will be made which not only enhance the brand image of TerraCog but also will help to recapture its market share. 

References

Helper. (2016).WAC report on TerraCog Global Positioning System.  https://getmbahelp.blogspot.com/2016/11/wac-report-on-terra-cog-global.html. 1st June.2020. 5:10 pm

Paul,P. (2019). Terracog Global Positioning System: Conflict in the launch of project Aerial. https://www.scribd.com/document/424316777/Terracog-Case-Analysis .1st June.2020. 6:00 pm

Arora, P. et.al. (2012). TerraCog Global Positioning System: Conflict and Communication on Project. https://www.slideshare.net/puneetarora369/terracog-gps-11702909 .2nd June.2020. 11:00 am

Ghosh, A. (2014). TerraCog GPS- Project Aerial. https://www.slideshare.net/AnupamGhosh4/terracog-gps-conflict . 2nd June. 1:00 pm

Shekar, V. (2011). TerraCog Case Study. https://www.scribd.com/doc/62270644/TerraCog-Case-Study . 2nd June. 5:00 pm

 

 

 

 


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