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Case Study No. 1 - Laran Jessica

A small IT company called PageForU faces increasing competition from other similar companies offering lower prices. As competition grows, the company struggles and considers options like lowering prices, focusing on marketing, or developing new services. The recommendation is to examine competitors, fill market gaps, innovate products/services for existing customers, and constantly innovate to stay ahead of shifting online markets and keep customers interested.

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Jessuel Larn-eps
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263 views4 pages

Case Study No. 1 - Laran Jessica

A small IT company called PageForU faces increasing competition from other similar companies offering lower prices. As competition grows, the company struggles and considers options like lowering prices, focusing on marketing, or developing new services. The recommendation is to examine competitors, fill market gaps, innovate products/services for existing customers, and constantly innovate to stay ahead of shifting online markets and keep customers interested.

Uploaded by

Jessuel Larn-eps
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CASE STUDY

A small IT company faces big competition

Jessica E. Laran
I. FACTS OF THE CASE
In December 2001, Zsolt and Peter founded their own business. Its first base was in
Kaposvár, a small city in South-West Hungary. They decided to name the company
‘PageForU’ which refered to the main activity of the company. In order to get into the
business, the first step was to come up with a marketing plan. Neither of them had previously
studied how to create a proper marketing plan. They read about it in several books and
articles and finally the two young entrepreneurs managed to prepare a one-year marketing
plan which included a definition of the target audience, detailed action plans, different
scenarios and a maximum and average budget plan for all the activities. The company mainly
targeted freelancers and self-employed people who might be interested in promoting their
portfolios online. The price was fixed. Since they did not face stiff competition at that time,
they could ask for a high price for their services.

In 2004, the two young entrepreneurs came up with new services to offer. One of
them was to provide assistance to people who had accidentally erased hard drives and needed
to retrieve all or some of the lost information. Another new service was website hosting and
maintenance. The focus changed from providing a one-off service to a continued involvement
with the customers. The company grew bigger and bigger. Zsolt and Peter decided to move
the business to a better office where they could welcome the customers. However, the
competition was growing. Plenty of small companies were set up in 2003-2004 and offered
their services for similar or cheaper prices. For Zsolt and Péter it was clear that in the long-
term they had to lower their prices in order to survive in the market. However, Zsolt knew
that PageForU already had a good reputation and even with the same prices the regular
customers would not chose another service provider. Online advertising had become more
and more popular since the company was established. There were customers from all over
Hungary and both of the founders were extremely busy running the business.

The problem was mostly with the marketing of the company. In the beginning the
target group were freelancers and other artists who wanted to sell their products or services.
But with time the marketing plan relied more and more on word-of-mouth advertising and
with the competition they faced, this was not enough. Also other companies offered the same
services for much lower prices. They hired Szonja, who had excellent skills in programming
and joined the team in 2007 and turned out to be an excellent colleague. Zsolt also hired an
external consultant to research the market. The results of this showed that they were still in
the high price range in the market. But as taxes, such as flat-rate healthcare contribution,
selfemployment tax, as well as the overhead costs were very high, they did not want to lower
their prices. In addition, more and more ‘do it yourself’ software emerged with which users
could create and manage their own websites.

After some months of looking for solutions and researching the market, Zsolt decided
to quit the business and look for a change. He was not motivated enough to control this
business with its income fluctuating from month to month. There were too many competitors
in the market and it was hard to make the same profit as back in 2002-2004. Péter continued
running the business on his own –with the help of Szonja - and later a bigger business in the
market offered a very high price to take over the company.
II. STATEMENT OF THE PROBLEM

How will PageForU Company continue running the business despite dealing with too
many competitors in the same field?

III. OBJECTIVES

1) To formulate strategy and interventions to continue running the business.


2) To study the market trend and pattern in the business.
3) To develop best marketing strategy for the business.

IV. ALTERNATIVE COURSES OF ACTION

1) Focus on cost reduction. When the financial situation of the organization is in dire
state, reducing company expenses and refraining from extensions of temporary
employment contracts can achieve a significant decrease in the costs and increase the
financial capacity of the company.

2) Set competitive pricing. This doesn’t necessarily means cutting your prices. You can
find alternative ways to price your products or services to appeal to more customers.
Like for example, you can offer payment installment plans for big services or create
new minimum subscription terms for new customers and for the old customers, you
can give bonus points or discounts based on their level of engagement with your
company, such as repeatedly render your services. This can widen your potential
market reach and imbue you with a quality your competitor doesn’t have. This what
we call flexibility of the company.

3) Develop best marketing strategy. It helps in discovering the areas affected by the
company’s growth and thereby helps in creating an organizational plan to cater to the
customer needs.

4) Strengthen the internal organization. Improving the quality of management and staff,
improving the primary and supporting processes, and devoting more attention to
innovation and renewal enhances the internal organization and improves the
organization ‘s ability to deal with changed circumstances and profit from them.
V. RECOMMENDATION/ CONCLUSION

Competition is healthy for businesses – it will force you to innovate, staying ahead
of the curve. Yet that rivalry can also be intimidating. You don’t want to back down, but you
aren’t sure how to combat competition. Every company deals with this problem, and what
success comes down to here is developing a plan that helps you better serve your customers,
accurate branding, and supporting your team.

I recommend that it is important to begin by examining the competition in the


marketplace. First, take a hard look at things your competitor does. Second, look to see what
your competitor doesn’t do, and then try to fill in that part of the market. One option you
have to continue supporting existing customers is product/service development. Introduce
new or better products/services to existing markets. Continue development on your existing
products/services, like your bestsellers, in order to renew your commitment to current
customers to the best of your abilities. Through product/service development, you can expect
to outperform competitors and keep your customers happy. And lastly, is keep innovating. In
today’s world, it is crucial to iterate, iterate, and iterate. That should be your marketing team’s
mantra in today’s constantly shifting world of online media. As pointed out earlier, your new
and old markets benefit from innovation as well. By constantly innovating, your team will
stay focused on the goal while keeping your customers interested in your company.

There are a million ways to combat competition in business. With these ideas in hand,
you can be sure that your customers will keep coming back again and again. Remember, an
unsuccessful idea is only failure if you stop trying.

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