Orbital Engine Company

CASE STUDY orbital Engine Comp any nitty-gritty (1)Executive SummaryP. 3 (2)Introduction of Business BackgroundP. 4 (3)OECs objectiveP. 4 (4) blusher issues HighlightsP. 5 4. 1Two Wise DecisionP. 5 4. 2Large Car Manufactures Appe ard not ready to adopt OCP EnginesP. 5-6 4. 3 merchandising Lessons Can be erudite P. 6 4. 3. 1Marketing Mix and 4P sP. 6 4. 3. 2OECs Porter Five Forces P. 6 4. 3. 3Licensing and knock VentureP. 7 (5) ConclusionP. 7 (6)ReferencesP. 8 (1)Executive Summary In this severe economic surroundings the commission of time, in the meaning of the ability to pioneer the market with newborn outputs or services, becomes crucial.OEC was in the favourable position of being able to provide guest with solutions that incorporate the latest state of locomotive engineering however, OEC was slow reactions to shifts in client accepts and technological advancements which did not allow OEC to realize economies of speed, even though customers are willing to honour fast rea ctions with higher prices. Furthermore, being the first on the market with an innovative product creates a temporary monopoly and cross out recognition.In this market situation the pioneering society is relatively free to bent grass adequate prices in order to recover the usually considerable embody for research and development. Once other companies come up with similar products prices repose immediately, due to the increased competition. In this situation, it becomes much more difficult to requite investments in research and development. Finally, being innovate creates a positive photograph among customers and, hence, strengthens the belligerent position of OEC in the marketplace. During the process, OEC had experienced the replaces and made some shrewd decisions.OEC is a potential company which has a lot of opportunities to diversify its products in cope with the market change through licensing, sum affect and product diversification. According to Porters model, incr eased bargaining authority of suppliers would corpus to increased costs for major input factors, exerting heavy pressure on the critical success factor costs. This withal enhanced bargaining ply of customers requires companies to consider customer needs to a larger extent. Basically, the same entrap derives from the increased rivalry of existing competitors within the same manufacturing.The severe free-enterprise(a) situation is even enhanced as the higher probability of new entrants increases the demand for low costs, flexibility, and economies of time. Finally, the market implies an increased threat of substitutes. Thus, OEC needs to remediate their cost and quality position in order to stay combative. (2)Introduction of melodic phrase background Orbital is an international developer of innovative technical solutions for a spic-and-span world. Orbitals innovative design and its product development and in operation(p) improvement services are attracted to the worlds car makers and closing curtain users of engines.Orbitals headquarter is based in Perth, Western Australia, and is traded on the Australian Stock Exchange (OEC). OEC is a pioneer for engine innovation that it keeps on trying to improve the product in cope with the market change and need. With its breakthrough of fuel injection and electronic combustion process (OCP) for two-stroke design, it benefits to twain vehicles and engines becomes cheaper in price and lighter in weight, which leading to a high-risk saving on the fuel consumption with lower liberation levels.This continue provides a discussion of the consequences of OECs wandering strategies and its activities that I think what OEC is make their perspicacious decisions on, why has OEC failed to commence its engine adopted by any major Car manufacturer at the time of the case, in pain of the engine having many apparent benefits, and what marketing lessons can be in condition(p) from the fact that some of OECs technolog y has been adopted by the makers of naval outboard motors in the US. At each point, I will distribute my recommendation and suggestion on the marketing point of views to help the company making decision. 3)OECs objective OECs mention objective was to pee the major car manufacturers in the US to adopt their new engine. (3) Key issues Highlights 3. 1Two Wise Decision (261) OEC had made at two wise decisions to bring about the major car manufacturers to adopt their new engine in the US. premier of all, OEC developed a pricing policy for its intellectual property at the early stage that it built up a series of demonstrate options for car manufacturers, such as General Motors, Ford, Fiat, Jaguar and Volkswagen to evaluate the technology and needs onwards converting into their final licence system.Kotler et al (2007, pp. 318, 590) mentioned that, A regularity of entering a abroad market in which the company enters into an agreement with a licensee in the foreign market, offerin g the advanced to use a manufacturing process, trademark, patent, trade secret or other item of value for a fee or royaltyMore and more for-profit and not-for-profit plaques are licensing their name to generate additional revenues and brand recognition. This brand recognition of licensing became one of the key profit generators for OEC.Secondly, OEC made another wise decision on control stick estimate with Brunswick Corporation, the parent of Mercury Marine in January 1995, became METEOR. This joint venture helped to develop, manufacture, market and sell Orbtals SEFIS to the global market for low emission two stroke engines, which was threatened by the US anti-pollution regulations (ULEV). Kotler et al (2007, p. 591) advocated that, The about common form of manufacturing-based entry into overseas markets for Australian firms is that of joint venturing. The local partner could provide access to the distribution network due to their cognition with the local marketing environme nt while OEC brought in their joint venture technology and production know-how. Since the first step of joint venture, there were legion(predicate) of other joint ventures happening which helped OEC to push the two stroke engine to the market in cope with the US emission standard. 3. 2Large Car Manufactures Appeared not ready to adopt OCP EnginesAfter discussing about the wise decisions, there were also obstacles for OEC to push their OCP engines into the large car manufactures. The core reason why OEC had failed to have its engine adopted by major car manufacturers was because OEC spent also much focus on R&D than really steering on analyzing its product was able to be adopted or pushed to the market. The marketing mix was unclear and OEC was failed to identify car manufacturers concerns and their potential interest of products.This insufficiency of knowledge of customers needs and pauperizations was leading to the failure. The market need was four strokes and OEC centre on t wo strokes. Kotler et al. (2007, p. 239) stated that, In order to design useful marketing mix strategies, the marketer must understand what factors within the organisation square up the purchase (or non-purchase) response of potential customers. OEC should first create a need-satisfying market offering and then found out the real-value for their customers. In addition, Manley (1994, p. 66) take a firm stand that, Learning is a particularly critical for Orbital in the awareness that the company was operating in a turbulent and complex environment as reflected in emission legislation reviews begin undertaken internationally the crook of actors in the global car industry and structural changes in the industry caused by the changing nature of international competition. In response, the companys innovation process exhibits organisational flexibility, anticipatory capabilities and responsiveness to change. Because of the above, OEC was not able to sell its technology to those large car manufacturers at that moment. . 3Marketing Lessons Can be Learned From this case study, there are several marketing lessons can be learned, such as marketing mix and 4Ps, Porter Five Forces, Licensing, and Joint Venture. 3. 3. 1Marketing Mix and 4Ps OEC had spent a lot of time and money on R&D on OCP and which neglected to understand what the customers need and want which is difficult to position the company to the targeted segmentation and its market. Because of that, OEC almost risked themselves into bankruptcy before 1989 if they could not gain the financial support from BHP and Australia Government.It is essential to under customers wants and need and then market the right product, right place, right promotion and right price. 3. 3. 2OECs Porter Five Forces According to this concept, the intensity of competition in an industry is rooted in its underlying economic structure (Porter strategy 1998, pp. 3). This structure is expressed by five basic competitive forces which en vision the ultimate profit potential of the respective industry. The five competitive forces are threat of new entrants, threat of substitutes, bargaining power of buyers, bargaining power of suppliers, and intensity of rivalry.As of June 1994, OEC already had acquired 854 patents and its applications, but it sat on it without provided development which missed out a lot of business opportunities as a pioneer in the market. Kotler et al. (2007, p. 101) asserted that, The implication is that the firm should influence the balance of forces through strategic moves, thereby strengthening the firms position. Alternatively, the strategists might reposition the firm so that its capabilities factors underlying the forces and respond to them, thus exploiting change by choosing a strategy appropriate to the new competitive balance before competitors recognise it. 3. 3. 3Licensing and Joint Venture Through OECs success in licensing and joint venture, it gave the company a business breakthrough to position themselves in a strong market place. Most of its dough from OEC is from licensing, development and supply agreements. In addition, investing and expanding the business in foreign countries, there are various laws and regulations that investors should pay highly attentions, and thus, cooperating with a joint venture company locally would be the most fast and easier manner to explore the market especially OEC has its technology know-how. 6) Conclusion To conclude, in this report, I have shown the effects of OECs marketing strategies on both wise and failure decision. These effects mainly consist of substantial alteration of the competitive environment in the form of unclear industry boundaries, increased rivalry, and a reduced relevance of traditional success factors. With the strategic marketing concept, it enables OEC to fence successfully in this altered economic environment. 7)References Kotler, P. , Brown L. , Adam S. , Burton S, Armstrong G. , (2007), Marketing 7t h 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, second Ed. , New York et al The Free Press 1998.