A Powerpoint presentation of the Comtec Corporation

1. Case study analysis #7 :
Comtec Corporation
Geoffroy LARDEUX
Minsoo KIM
Loïc VELO

2. Overview of the situation
 January, 1984
 Industrial microcomputers and specific software
 Cambridge, Massachusetts
 Amsterdam, Netherlands

3. Overview of the situation
 Sales difficulties in both domestic and international
market
 Profits are low and financial crisis looming
 Consultant in high-tech marketing hired to advise on
new marketing directions
 Consultant's recommendations run counter to VP for sales
and marketing strategy

4. Names and Positions
 Participants :
- Dr. Daniel Needham, President of Comtec Corporation
- Mr. Harry Otto, Vice-President of Comtec Corporation
- Ms. Roberta Malcolm, Consultant in high-tech marketing
 Mentioned :
- Mr. Max Mendel, Sales manager in Amsterdam

5. Documents
 Dialogue between D. Needham, H. Otto and R. Malcolm
 Exhibit 1 : Ad for the Comtec 100 Microcomputers
 Exhibit 2 : Sales of the Comtec 100, Third and Fourth Quarter,
1983
 Exhibit 3 : Comtec’s balance Sheet as of December 1983
 Exhibit 4 : Memo from H. Otto to D. Needham
 Exhibit 5 : Letter from Manchester Metals Ltd., to Comtec’s
Amsterdam Office

6. Exhibit 1 : Ad for the Comtec 100 Microcomputers

7. Exhibit 2 : Sales of the Comtec 100, Third and Fourth
Quarter, 1983
0
10000
20000
30000
40000
50000
60000
70000
July August September October November December
Domestic
International

8. Exhibit 3 : Comtec’s balance Sheet as of December 1983

9. Exhibit 4 : Memo from H. Otto to D. Needham

10. Exhibit 5 : Letter from Manchester Metals Ltd., to
Comtec’s Amsterdam Office

11. Existing Situation
Marketing Management Intercultural Economic Products
Strengths
Insist on the
quality of the
product
Two specific
areas
Has an office
in Europe
Successful in
U.S
Most
Powerful
microcom
puters
Weaknesses
Not enough
ads
Target the
wrong people
Can’t cover
the whole
market
Didn’t make
enough
profits
Not enough
European
clients
High
prices

12. Statement of Problem
How to avoid the lack of
competitiveness and the financial
crisis?

13. Option 1 : Keep Comtec’s initial Strategy
Advantages Drawbacks
- Make profits
- Has potential
- Recently entered on new markets
- Receive an order from Manchester
- Need more time to make new clients
- Not enough orders
- Takes some time to build
microcomputers

14. Option 2 : Lower products prices
Advantages Drawbacks
- Increase sales
- From high-range to mid-range
- Profits will decrease at the
beginning
- Lower the company label
- Have to reduce the salary or to
change the employees

15. Option 3 : Shift advertising and sales
promotion
Advantages Drawbacks
- Target the right customers
- A more modern business
- Increase profits
- Increase the number of orders
- Cost of this option
- Have to buy lists of primary
purchasers

16. Option 4 : Shift from hardware to a software
emphasis
Advantages Drawbacks
- Produce IBM-compatible software
- Save money
- A whole new market
- Loss of the hardware market
- Miss the order from Manchester
- Risky and expensive for the
company

17. Option 5 : Close down the European office
in Amsterdam
Advantages Drawbacks
- Concentrate only on the U.S. market
- Save money (cost of the European
office/No export charges in Europe)
- Loss of European customers
- Send a bad image of the company
- Bad reputation for European
customers?

18. Our recommendation
 We recommend : Option 3 + Option 4
Switch Market + Better Communication
A little bit dangerous and expensive but it
is an opportunity to become a successful company

19. QUESTIONS ?
 Option 1 : Keep Comtec’s initial Strategy
 Option 2 : Lower products prices
 Option 3 : Shift advertising and sales promotion
 Option 4 : Shift from hardware to software emphasis
 Option 5 : Close down the European office in
Amsterdam