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Imagine that JRP Computing Bhd. has saturated the large firm market for its products and competitors are undermining its technological advantage. JRP needs to look to new markets for revenue. The CEO has suggested that it starts selling its software down-market to middle-market companies and at the same time the company enters into the consulting and installation side of the business for this target market. Discuss the risks and opportunities of such a strategy.

Imagine that JRP Computing Bhd. has saturated the large firm market for its products and competitors are undermining its technological advantage. JRP needs to look to new markets for revenue. The CEO has suggested that it starts selling its software down-market to middle-market companies and at the same time the company enters into the consulting and installation side of the business for this target market. Discuss the risks and opportunities of such a strategy.

Principles Of Marketing
Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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Imagine that JRP Computing Bhd. has saturated the large firm market for its products and competitors are undermining its technological advantage. JRP needs to look to new markets for revenue. The CEO has suggested that it starts selling its software down-market to middle-market companies and at the same time the company enters into the consulting and installation side of the business for this target market. Discuss the risks and opportunities of such a strategy.

Case Study: JRP Computing Bhd JRP Computing Bhd (JRP) is a leading provider of Enterprise Integration Software (EIS). EIS allows a firm to connect and integrate processes across all aspects. To fuel its dramatic growth, JRP has focused its organization entirely on product development (software programming for a suite of EIA products) and selling (making the sale and then moving into a new target) while outsourcing the installation and consulting aspects to the world largest accounting firms. This also makes JRP basically a product company whereas most competitors like Oracle and PeopleSoft, in its market space operate as solutions companies. One benefit of this focused strategy is JRP's product is generally recognized as 200% to 300% better than competitors' software, and thus adaptors are likely to have a one-to two-years advantage. In further contrast to the competition, JRP has used its partnership with the accounting firms to deliver a turn-key solution (It is a type of system built end-to-end for a customer that can be easily implemented into a current business process). and has focused this solution on a market comprised of the world's largest, global manufacturer and consumer product companies. The accounting firms, in tum coordinated a comprehensive collection of hardware, operating systems and complementary software firms. Installation and related consulting for ElS typically cost between RM100 to RM200 million but with the JRP software component accounting for only about 20% of the installed cost (the remaining 80% is spent on the actual installation, not counting the value of consumer's time). To incentivize the accounting firms to help sell its product (since, at least initially, the accounting firms had better reputation and controlled access to the target consumers). JRP has told its partners that it will never enter the installation and consulting side of the business (aside from installation and consulting that JRP does as part of its software support). By dangling such a large carrot in front of the accounting fims provided the continuing benefit of encouraging their continued support to JRP with their customers.
Transcribed Image Text:Case Study: JRP Computing Bhd JRP Computing Bhd (JRP) is a leading provider of Enterprise Integration Software (EIS). EIS allows a firm to connect and integrate processes across all aspects. To fuel its dramatic growth, JRP has focused its organization entirely on product development (software programming for a suite of EIA products) and selling (making the sale and then moving into a new target) while outsourcing the installation and consulting aspects to the world largest accounting firms. This also makes JRP basically a product company whereas most competitors like Oracle and PeopleSoft, in its market space operate as solutions companies. One benefit of this focused strategy is JRP's product is generally recognized as 200% to 300% better than competitors' software, and thus adaptors are likely to have a one-to two-years advantage. In further contrast to the competition, JRP has used its partnership with the accounting firms to deliver a turn-key solution (It is a type of system built end-to-end for a customer that can be easily implemented into a current business process). and has focused this solution on a market comprised of the world's largest, global manufacturer and consumer product companies. The accounting firms, in tum coordinated a comprehensive collection of hardware, operating systems and complementary software firms. Installation and related consulting for ElS typically cost between RM100 to RM200 million but with the JRP software component accounting for only about 20% of the installed cost (the remaining 80% is spent on the actual installation, not counting the value of consumer's time). To incentivize the accounting firms to help sell its product (since, at least initially, the accounting firms had better reputation and controlled access to the target consumers). JRP has told its partners that it will never enter the installation and consulting side of the business (aside from installation and consulting that JRP does as part of its software support). By dangling such a large carrot in front of the accounting fims provided the continuing benefit of encouraging their continued support to JRP with their customers.
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