Case of Profitless Pc

Case of Profitless PC (Group Submission)

1. With which of the experts do you agree regarding his or her analysis of Praxim’s Solution?

All the experts have put forward certain drawbacks of the Praxim’s solution in their advices.

The following are the highlighting comments of the each of the six experts which we find relevant to this context: -

1. Geoff Moore: He conveyed that Praxim has failed to meet customer’s expectation on traditional grounds. He also pointed out buying risk as a differentiating factor between High-tech marketing and consumer packaged-goods marketing as an argument against Linda’s solution. For High-tech, customer’s desire for assurance branding is very high. Thus for a commoditized market, market leader will have far greater advantage over others. Further, countering Linda’s proposal of brand awareness, he pointed that market share is better metric for market indicator that brand awareness for this industry.
2. Donna Dubinsky: She conveyed that Linda’s proposal involves long term investment and high risk. Thus, failure in consumer segment will impact business on commercial segment also. She suggested that Linda should explain how Praxim will gain competitive advantage by following of the five strategies. (Product Differentiation; Customer Service & User Friendliness; Alternate Distribution; Price; & innovation).
3. Larry Keeley: He pointed out that it is a classic case of value migration when momentum has shifted from manufacturing & retailing to customer support. He described the disadvantages of moving out of consumer business. Then Praxim will lose out on volume leading to cost disadvantage on commercial segment also and Investors might take this as a sign of slow business. He recommended selling through internet as alternate distribution channel. He also highlighted the requirement of proper market research for both branding and product development which was missing in Praxim’s case.
4. George Quesnelle: He highlighted that better understanding of present brand equity is necessary for Praxim. Market research on buyers as well as end users is of utmost importance to identify Praxim’s strength & weaknesses. This data will also help on on-board other internal stakeholders for devising a strategy. Selection of market (Mass or Niche) should be based on product attribute and market research. For such high capex project, pilot implementation is absolutely necessary.
5. Scott Ward: He identified that Linda’s proposal failed to capitalize Praxim’s present reputation and brand associations. He highlighted that commodity strategy would be unsuitable for Praxim based on their present product attribute of high quality and premium price. He suggested that branding strategy should be distinctive and quantifiable which was missing on Linda’s communication as well as present situation. Further, fundamental questions of market research remain unanswered through Linda’s proposal.
6. Philip Pifer: He expressed that branding is not enough to address Praxim’s situation. Praxim need to showcase both its product’s functional value and emotional benefit and both are missing in present scenario. Further, the promised value should be consistent with product offering and product differentiation in market. Good segmentation and targeting strategy should be Praxim’s primary focus in order to survive the intense pricing competition. He mentioned that offering a commoditized product is a losing proposition. Effective market research should be the main priority for Praxim in present situation.
   

Issues identified and possible solution for revival

Instead of agreeing to any particular expert, we have identified the key issues to be addressed in the present scenario and suggested possible revival strategy

1. Issue of Commoditizing PC: As pointed out by experts, it is a losing proposition in a highly price competitive market. Further, they will be losing their core strength of being fast and powerful machine by commoditizing it. Thus, it is necessary to possess key differentiating factors to survive in this market.
2. Lack of Segmentation, Targeting & Positioning strategy as well as Competitive Advantage:

Presently, most of the Praxim board members are of the belief that an innovative product sells on its own. This is a false notion but, surprisingly Linda’s proposal also fails to address this issue. Her proposal has no clear focus on segmentation of customers and identification of target customers and defining a clear positioning strategy. The ideal approach on the five strategies of competitive approach should be: