Hp and Plam

SWOT Analysis of a PDA product

by V S Rama Rao on November 18, 2007

We are considering here for illustration and explanation a company called Sonic and its products. Sonic has several powerful strengths on which to build, but has major weakness in lack of brand awareness and image. The major opportunity is growing demand for multifunction PDA that delivers communication-specific benefits. They also face the threat of ever-greater competition and downward pressure on pricing.

Strengths Sonic can build on three important strengths:

1. Innovative product: Sonic 1000 include a voice recognition system that simplifies usage and allows hands-free operation. It also offers features such as built-in cell phone functionality wireless communication, and MP3 capabilities.

2. Compatibility: One PDA can work with the hundreds of Palm-compatible peripherals and applications currently available.

3. Pricing: Their product is priced lower than competing multinational models all of which lack voice recognition which give an edge with price-conscious customers.

Weaknesses: By waiting to enter the PDA market until the initial shakeout and consolidation of competitors had occurred. Sonic has learned from the successes and mistakes of others. Nonetheless, it was found they have two main weaknesses:

1. Lack of brand awareness: Sonic has not yet established a brand or image in the marketplace, whereas palmOne and other rivals have strong brand recognition. This is an area we will address with promotion.

2. Heavier weight: To accommodate the multifunction features, the Sonic 1000 is slightly heavier than most competing models. To counteract this , we will emphasize our multifunction features and value-added pricing, two important competitive strengths:

Opportunities Sonic can take advantage of three major market opportunities:

1. Increasing demand for multiple communication methods: The market for wireless Web-enabled PDAs with cell phone functionality is projected to grow faster than the market for non-wireless models. There are more users with PDAs in work and educational settings, which is boosting primary demand. Also, customers who bought entry-level models are now trading up.

2. Add-on peripherals: More peripherals, such as digital cameras and global positioning systems, are available for the Palm operating system. Consumers and business users who are interested in any of these peripherals will see the Sonic 1000 as a value priced device able to be conveniently and quickly expended for multiple functions.

3. Diverse applications: The wide range of Palm- compatible software applications available for home and business use allows the Sonic PDA to satisfy communication and information needs.

Threats: We face three main threats at the introduction of the Sonic 1000:

1. Increased competition: More companies are entering the US PDA market with models that offer some but all of the features and benefits provided by Sonic’s PDA. Therefore, Sonic’s marketing communications must stress our clear differentiation and value added pricing.

2. Downward pressure on pricing: Increased competition and market-share strategies are pushing PDA prices down. Still, our objective of seeking a 10% profit on second-year sales of the original model is realistic, given the lower margins in the PDA market.

3. Compressed product life cycle: PDAs seem to be reaching the maturity stage of their life cycle more quickly