Orbital Engine Company
CASE STUDY: Orbital Engine Company CONTENT
(1) Executive Summary P.3
(2) Introduction of Business Background P.4
(3) OEC’s objective P.4
(4) Key issues Highlights P.5
4.1 Two Wise Decision P.5
4.2 Large Car Manufactures Appeared not ready to adopt OCP Engines P.5-6
4.3 Marketing Lessons Can be Learned P.6 4.3.1 Marketing Mix and 4P s P.6
4.3.2 OEC’s Porter Five Forces P.6
4.3.3 Licensing and Joint Venture P.7
(5) Conclusion P.7
(6) References P.8
(1) Executive Summary
In this severe economic environment the management of time, in the meaning of the ability to pioneer the market with new products or services, becomes crucial. OEC was in the favourable position of being able to provide customer with solutions that incorporate the latest state of technology; however, OEC was slow reactions to shifts in customer needs and technological advancements which did not allow OEC to realize economies of speed, even though customers are willing to honour fast reactions with higher prices. Furthermore, being the first on the market with an innovative product creates a temporary monopoly and brand recognition. In this market situation the pioneering company is relatively free to set adequate prices in order to recover the usually considerable cost for research and development. Once other companies come up with similar products prices drop immediately, due to the increased competition. In this situation, it becomes much more difficult to repay investments in research and development. Finally, being innovate creates a positive image among customers and, thus, strengthens the competitive position of OEC in the marketplace.
During the process, OEC had experienced the changes and made some wise decisions. OEC is a potential company which has a lot of opportunities to diversify its products in cope with the market change through licensing, joint venture and product
(1) Executive Summary P.3
(2) Introduction of Business Background P.4
(3) OEC’s objective P.4
(4) Key issues Highlights P.5
4.1 Two Wise Decision P.5
4.2 Large Car Manufactures Appeared not ready to adopt OCP Engines P.5-6
4.3 Marketing Lessons Can be Learned P.6 4.3.1 Marketing Mix and 4P s P.6
4.3.2 OEC’s Porter Five Forces P.6
4.3.3 Licensing and Joint Venture P.7
(5) Conclusion P.7
(6) References P.8
(1) Executive Summary
In this severe economic environment the management of time, in the meaning of the ability to pioneer the market with new products or services, becomes crucial. OEC was in the favourable position of being able to provide customer with solutions that incorporate the latest state of technology; however, OEC was slow reactions to shifts in customer needs and technological advancements which did not allow OEC to realize economies of speed, even though customers are willing to honour fast reactions with higher prices. Furthermore, being the first on the market with an innovative product creates a temporary monopoly and brand recognition. In this market situation the pioneering company is relatively free to set adequate prices in order to recover the usually considerable cost for research and development. Once other companies come up with similar products prices drop immediately, due to the increased competition. In this situation, it becomes much more difficult to repay investments in research and development. Finally, being innovate creates a positive image among customers and, thus, strengthens the competitive position of OEC in the marketplace.
During the process, OEC had experienced the changes and made some wise decisions. OEC is a potential company which has a lot of opportunities to diversify its products in cope with the market change through licensing, joint venture and product
References: Kotler, P., Brown L., Adam S., Burton S, Armstrong G., (2007), Marketing 7th Edn, Pearson Education, Australia. Manley, K.J., 1994, Factors Leading to Offshore Manufacture of Australian Inventions: The case of The Orbital Combustion Process Engine, Murdoch University, Western Australia. Porter, M. E.: ‘Competitive Advantage. Creating and Sustaining Superior Performance’, 2nd Ed., New York et al: The Free Press 1998.