Spc Products Company

SPC Products Company

Brief Summary of SPC Company

Son pan products company (SPC) is a leading Japanese company specialising in providing automating solutions for financial, insurance and manufacturing solutions. SPC also produces PC's, mid range computers and peripherals for the Japanese Market. SPC is well known in the Japanese Market as a software producer of very high quality. Due to Son pan's large range of hardware, software and networking solutions, it is also one of the largest systems in Japan. Due to the pressure to cut costs SPC has been looking to outsource software development for lower prices.

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Brief Summary of case:

Lakshmi Software:

Lakshmi software is a company with their headquarters in India. Lakshmi software is a low cost software engineering company. The company has had reasonable success working with European, particularly German companies and US companies. Lakshmi however realises that they have had very little success in the second largest software market in the world Japan. Lakshmi considers this to be a very important market and is seeking to further their success in Japan. One of Lakshmi's largest customers is Son pan and Lakshmi is hoping to use Son Pan to help them to increase their share of the Japanese market.

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The India Project team:

In order to streamline the outsourcing procedure, SPC has set up the India project team (IPT). IPT has been looking for a large end user project (where the user is a customer of SPC) to be outsourced to Lakshmi. The IPT also helps Lakshmi in understanding the business practices and culture of Japanese companies, which varies greatly to their western counterparts. Japanese companies give very vague specifications and give deadlines that can not be changed. The Japanese consider their customers to be god and agree to required schedules even if the specifications are not ready.

The Relationship between SPC and Lakshmi

SPC has provided Lakshmi with a few million dollars worth of business every year. Lakshmi also saves on their marketing costs due to SPC. Lakshmi is advantaged working with Son pan as it allows for them to state of the art technology that will give them an edge when entering new markets. SPC is the largest customer for Lakshmi. In order to expand their business in Japan, Lakshmi must ensure customer delight and prove they can handle large projects effectively. Lakshmi has noted that language will be a problem and has invested in translation services to enable them to communicate effectively.

The Current Scenario:

SPC has made it very clear to Lakshmi that they will not provide them with projects unless their productivity matches their own. The IPT enabled Lakshmi to improve their relationship with Son Pan. Lakshmi agreed to work under a 'Japanese Sub Contractor model'. Implications that related to this included Lakshmi having to take specifications in Japanese, conduct business in Japanese, have management available during Japanese business hours even though their management resides in India. SPC has started to talk to other suppliers because they have concerns about the quality being delivered by Lakshmi. Currently the Lakshmi's relationship with their customer Son Pan can be simply described as "delicate'.

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KOS is a division of SPC and is currently bidding for a large system development and integration project