TerraCog Global Positioning Systems:

Confl ict and Communication on Project

Aerial

FORE School of Management

SUBMITTED TO:
PROF. SRIPARNA BASU

Submitted
by:
Anuja Prakash
251081
Section B

TerraCog Global Positioning System

Overview

Terracog was founded in 1977.

It is a privately owned company that specialises in high quality global positioning
systems (GPS) and fishing sonar equipment.
It began with manufacturing high end sonar equipment that catered serious fishermen
and boaters.
In 1990s the company launched its first GPS products.
Terracog products were famous for durability and value-added features like the
integrated compass and barometric altimeter.
In 2007 Terracog was preparing to enter GPS Sub-markets like cycling and fitness
application.

People Involved
Richard Fiero
Emma Richardson
Becky Timmons
Ed, Pryor
Harold Whistler
Allen Roth
Tony Barren
Cory Wu
Alice Gorga

President
Executive Vice President
Chief Financial Officer
Vice President, Sales
Vice President, Design and Sales
Director, Design and Sales
Director, Production
Manager, Software & Finance Design
Manager, Hardware Design

Current Situation

A competitor, Posthaste, had introduced a GPS prototype called BirdsI. This product
had become a huge success and was eating into the share of terracog.
To satisfy the new demands of their customers Terracog decided to launch the GPS
with satellite imagery by name Project Aerial.
Project Aerial had to be priced under $550 but due to hardware and other constraints,
it was not feasible without compromising on quality.
The departments are unable to make the decision on pricing for the product. Despite
many meetings unit managers failed to reach to an effective conclusion.
Emma Richardson, a newly promoted Executive Vice President of company, was the
final head to take the decision in this matter. But she is in dilemma of whether to go
ahead with the project or not.

S.W.O.T Analysis
Strengths

Weakness

1. Terracog has achieved customer

loyalty.
2. An established brand name.
3. Offers better quality products than
competitors.
4. The company boast the major market
share in GPS and sonar equipments.
Opportunity

1. Lack of innovation: redesigned

within the existing GPS platform.
2. Slow movers
3. Lack of true leadership.
4. Lack of proper research
5. Weak organizational structure

1. Terracog has opportunity to diversify

its product range with cycling and
fitness applications.
2. It has opportunity to position its
brand name appropriately.
3. The market is booming for GPS
related product and will provide good
revenue to the company.
4. Project Aerial could bring back the
lost market shares.

1. Stiff competition from Posthaste and

other companies.
2. Project Aerial: The entire focus of
company is on one single product,
failure of which would hurt the brand
name.

Threats

Porters generic strategy

Terracog follows the strategy of differentiation focus as they cater to a niche market. Their
target is mostly sports enthusiasts, hunters, campers, etc. Their product differentiates on the
basis of superior quality and performance in terms of navigation, value added features like
integrated compass and barometric altimeter. Their products had a history of introducing new
products which surpassed those of competitors in addressing consumer needs.

Miles and Snow Organisational strategies

Terracog has analyzer strategy as it is content to follow rather than to pioneer. They were not
the first to launch their flagship GPS equipment and nor did they come up with the idea for
satellite imagery. They prefer to look into the market responses rather than taking the plunge.
Only when they have seen the results they launch their better product.

Case Objective
To decide the best possible strategy to counter the competition posed by BirdI and to
recapture the lost market share.

Problems Faced
1. Ineffective group structure and lack of synergy. Due to the flat structure of the
organisation, hierarchy of authority is unclear and group could not come to consensus
due to lack of proper analysis.
2. Lack of communication: None of the meeting had any fixed agendas. Mostly the
Presidents agenda was to launch the product at $500 without heeding the challenges
that other teams faced.
3. Growing competition: Posthastes BirdsI had brought in a paradigm shift as the
consumers now expected the same features as that of BirdsI, leading to a loss of
market share for TerraCog.
4. Pricing: The price that the production team has come up with is too high and the sales
team believe that at this price they would not be able to sell the product as similar
products were available at cost well below what production team quoted.
5. Weakness in decision making process : Slow and late in addressing and identifying
the market demand. They just focused on their report which was based on quality of
the product rather than the reaction of the consumer towards their competitors
product. By the time they were in process of launching their own product, they had
lost two years.
6. Other product developments like in cycling and in fitness took a setback as their
resources were now deployed for Project Aerial.

Key Problem: The major problem at this point of time though seems to be how to regain
their lost position, this was mostly due to their loss of vision on customer needs. Lack of
proactive decision making had led to the loss in market share and decreasing revenues.

Problem Analysis
TerraCogs team failed to recognize the market potential when it evaluated the BirdsI
launch. They took BirdsI seriously only when they began to eat into their shares. To
compete with Posthaste it started its own Project Aerial. This had two problems: one
diverted resources from existing projects and inflexible product cost with high quality.
This was the result of loss of vision which led to a loss of morale at the company leading
to hasty decision making. Not conducting proper market research was one of them. The
earlier mistake made the senior management wanted to release their version of the
product, quickly and at a low price. This meant the design team had very little freedom to
innovate. Individual and departmental goals are needed to be align with Organizational
goals. Emma can work on setting up the common goals and individual benefits out of it.

Solution Available
1. Launch Aerial at $550 and then redesign so as to reduce cost: High price will not
help Terracog compete at competitive prices but they can target their product to
consumers looking into good quality, live satellite feed product. The company can
launch the product now and sell it at the premium price.

2. Launch Aerial at competitive price $475 and thus compromising on Margins: The
company has established its brand name and people are probably waiting for
TerraCog to come up with their version of the product. So the company can
launch at the product at its cost price to gain the lost market share and keep
working on improving the design and come up with a new better version. They
can earn profits from volume of sales than from margin from individual products.
3. Delay the launch by six months and come up with a new and advanced product:
This can be done by creating a task team whose sole objective will be project
Aerial. The customers of Terracog expects high quality goods delay of aerial can
help in delivering the quality it has set. This way the hard earned trust and loyalty
of their customers will not be lost. The product development team has assured that
it can come up with such product at a lesser cost in six months. Thus the customer
requirement is addressed to a large extent in this case. Also brand loyalty for this
category of product solely depends on features and quality offered.
4. Abandon the Aerial Project: The design team at TerraCog was working on new
products to tap into the unexplored GPS sub-markets like cycling and fitness. The
organization should focus on these products as the cost for Aerial is too high and
the product is not completely ready.
Solution Analysis: Of all the solutions mentioned above, the third solution seems to be the
most feasible as it will address the needs of the customer while maintaining their quality.
Moreover Terracog will be working on live satellite feed which is a vast improvement over
BirdsI. So they can regain their market share at a later date.

Contingency Plan
If the above solution doesnt work out then they can look into diversification into cycling and
fitness products

Exhibit 1

Exhibit 2
Problem Tree

Causes

No clear
strategy

Core Problem

Decreasing
market shares
of Terracog due
to BirdsI

Lack of task
teams

Lack of
Vision

Dilemma over
launch of Project
Aerial

Management
Conflicts

Solution Available
Reduced
Revenue

MEETING AGENDA PROJECT AERIAL

MEETING INFORMATION
Objective:

To take decision regarding the launch of the product Aerial.

Date:

11th March 2008

Time:

10 am

Called By:

Emma Richardson

Attendees:

Location:

Conference Hall

Emma Richardson

Harold whistler

Ed Pryor

Allen Roth

Tony Barren

Cory Wu

AGENDA ITEMS

PRESENTER

Backy Timmons

TIME
ALLOTTED

Final discussion on Aerial launch

Emma
Richardson

15 minutes

Delayed launch

Emma
Richardson

10 minutes

Pricing of product

Emma
Richardson

10 minutes

Time- Cost Efficiency

Emma
Richardson

10 minutes

NEW ACTION ITEMS

RESPONSIBL
E

DUE DATE

Production team needs more work force

Tony Baren

1 month:11th
March 2008

New software and firmware

Cory Wu

3 months:11th
Jul 2008

Design and development, to develop new

design

Allen Roth

3-4 months

Ed Pryor

4 months

Detailed report on market status

5

Tony Barren
Build prototype for market status

1 month