Growth Analysis of Systemsoft

The aim of this work is to define the best growth strategies for the company SystemSoft, and state on their suitability. Through the help of the Ansoff matrix three major strategies are going to be kept for SystemSoft Corporation.

Question 1:

Each company are faced by external business environment that is constantly changes, in particular technological organisations. Those changes can be minor, e.g. regulations, new small firms entering the market; however some changes can have a huge impact and consequences for a business; e.g. new technologies, fusion between two considerable competitors, or consumers changing tastes. All those alterations can create both opportunities and threats to a company’s strategic development and so have to react.

SystemSoft, being in the PC industry is faced with technological changes and have to innovate continuously to keep his technological leading position.

Strategic analysis of Systemsoft:

Systemsoft core products are based on three major lines: BIOS, Pc card and Power management. They are leading the Pc card market with 64% of market share, but in high competition for the BIOS and power management markets with only 20% market share.

“Its strategy was focused it technological leadership, strategic alliances, key customer relationship, further expansion into the desktop market and finding more markets for PC card software and power management technology.” (Case study)

Since 1991, SystemSoft is experiencing a huge growth. But since the company has been public in 1994, its has been facing some problems regarding growth strategies.

Ansoff's matrix is one of the most well know frameworks for deciding upon strategies for growth. Marketers who have objectives for growth use it. Ansoff's matrix offers strategic choices to achieve the objectives. There are four main categories for selection. (A.Aker)

Ansoff's Product/Market Matrix

This well-known marketing tool was first published in the Harvard Business Review (1957) in an article called 'Strategies for Diversification'.

MARKET PENETRATION:

Here Systemsoft has to market his existing products to his existing customers, or attracting consumers of their competitors or could convince consumer who are not attract on their product to be.

 Increase their market share

Going for market penetration involves SystemSoft to improve their competitive position. As stated in the case study SystemSoft is leading the Pc card market with 64% of market share, but is in high competition for the BIOS and power management markets with only 20% market share. The company can expand those two core products by innovating or if enough resources could buy Pheonix Technologies who is their only competitor, which has developed all the software that Systemsoft working on.

This action would attract all the customers of Phoenix Technologies to SystemSoft. This action involved a lot of investment, very expensive, the company should be declining to be able to buy it, and it is a really huge cost for Systemsoft, if the growth attempt to be mature then it can buy it might be to early.

 Increase their product usage

Systemsoft is selling to major OEM’s market and should develop it’s market penetration by selling same product to the different customer.

For example Bios product could be used also for notebook, not only for desktop.

 Increase their marketing communication

To implement the market penetration, SystemSoft have to improve its marketing communications skills. According to the case study, they are focusing on personal selling and trade shows. The only advertising is to distribute some data sheets.

By improving their promotions, like make more incentives or special events, SystemSoft would increase its market penetration, and gain more customers.

MARKET DEVELOPMENT

In this strategy System Soft has to market his existing product range in a new market. This means that the product stays the same, but it is marketed to a new target.

 New Segments

Moreover the company is selling as a supplier to four different segments: Hardware Component Manufacturers,