Compoint Australia

Introduction

Compoint Australia is an Australian company that had acquired 3 percent of the Australian market for pointing devices for computers including mouse, cursor keys, light pens and touch screens. It had just appointed a new CEO, Mr. Wally Silva who had ten years of rich experience working in IBM, to lead the company to grow further. In order to do that, Mr. Wally Silva implemented his ideology and philosophy of management into Compoint Australia that would enable the development of the companyÐŽ¦s long-term proactive strategic marketing plan. As Jain suggested, ÐŽ§The ideologies and philosophies of top management as a team and of the CEO as the leader of the team have a profound effect on managerial policy and the strategic development processЎЁ. (Jain p.53) Strategic marketing plan arises from the interplay of the strategic 3Cs, which are customer, competition, and corporation in a given target market environment. In addition, the 3Cs should correspond to the 4Ps in product marketing management. The conditions of the strategic 3Cs of Compoint are being analysed below.

Leadership and vision (Corporation)

After learning from IBMÐŽ¦s mistake, Mr. Wally Silva arrived with a vision to make Compoint Australia to have a greater marketing orientation because the company has been too production orientated like IBM where customer needs have not been seen as being important. A swift would provide a system of shared beliefs and values (corporate culture) that the company should revolve around customer needs in order to gain competitive advantage that is sustainable.

SWOT analysis

In order for Compoint to operate according to the vision that Mr. Wally Silva implemented into the company, Compoint has to know what are their strengths, weaknesses, opportunities and threats in order to develop objectives and goals that would help the company to strive towards the direction established. There are environmental factors that affect CompointÐŽ¦s operation in their chosen target market. Knowing these environmental conditions will enable the company to maximise opportunities and minimise threats. (Samuel, p.4) The marketing environments that Compoint Australia was facing could be separated into internal and external factors. Essentially, the internal environment would determine the strengths and weaknesses of a company while external environment determine the opportunities and threats.

Strengths

- Good Human Resources. Proactive Mr. Wally Silva knows the market well. He also would hire young MBA-qualified professionals from around the world who had the correct attitudes for an increasingly competitive globalised marketplace.

- Product differentiation through niche marketing (focus strategy)

- Lower production cost by outsourcing (cost leadership). Compoint has sub-contracted companies in Sri Lanka and India to produce mice to high quality specifications but at half the estimated cost of Australian production. But the company still has direct control over critical elements of the production process.

- Good financial situation. Cash flow had increased by over 50 percent in the five years since 1989, and was projected to increase by a further 22 percent to the end of the decade. Net income was to grow by 57 percent in the 5 years to 2000 with the large contract for the Sydney Olympic Games.

Weaknesses

- Production oriented. The company is currently too production oriented where there was little idea screening and no concept testing of product attributes using focus groups. Customer-needs have not been seen as being important and are assumed not to know what technologies are possible.

Opportunities

- Australian government had passed laws to protect workers from repetitive strain injuries. This workplace hazard was associated with user spending long hours before computers. Recently users were becoming more conscious of such downsides of computer use. Thus, a latent demand has emerged to minimise health risks while utilising the benefits from the use of computer. (Legal and cultural environment)

- Computer market is growing rapidly (Economic environment)

Threats

- Computer were on their way to becoming commodity items, with limited product differentiation, short technology life cycle and falling prices. Hence product innovation is the key to company growth (Technical environment)

- Strong competitors (Microsoft, Logitech and KYE) competing in a highly competitive market. (Competitive environment)

Objectives and Goals (SBU mission)

Since Mr. Silva has a vision to turn the company into a marketing oriented firm, he established objectives and goals that are realistic (provided by the SWOT analysis) to correspond with his vision. To cope with the threat and at the same time, capturing the opportunity given by the passing of the new laws and the increasing health consciousness of customers, a major objective that Mr. Wally Silva wanted is to develop an innovative pointer (mouse) technology, tailored to the particular requirements of Australian customers. To do that, he had to gain competitive advantage by optimally utilise the companyÐŽ¦s existing strengths, as strengths can become distinctive competencies for competitive advantage. Before Mr. Wally Silva arrived, the company already had cash flow increased by over 50 percent between 1989-1994 and was projected to increase by a further 22% at the end of the decade. Moreover, net income was to grow by 57% by 2000 with the large contract for the Sydney Olympic Games. Nevertheless, Mr. Wally Silva obviously felt that if his objective is to be fulfilled, the projected growth wasnÐŽ¦t enough for the companyÐŽ¦s long-term strategic marketing plan beyond 2000. Thus, given by the rapid growth of the computer market, he established goals to have cash flow grow by at least 40% instead of 22% with also net income doubling instead of 57% by 2000.

Competitor analysis (Competition)

The market leaders in the computer accessory market were Microsoft, Logitech and KYE (Genius). Each of them used different strategies to gain competitive advantage in order to compete in this highly competitive mouse retailing market. For Microsoft, they used the advantage of its software reputation (brand) to help the sales of their mice and often bundled its mouse with Microsoft program. However, Logitech competed by the product