OVERVIEW OF PALM HONG KONG
A. Company Mission / Corporate Objectives
Palm Hong Kong aims for sustainable growth as a broad market leader in mobile computing as well as for segment leadership. In both cases, the Palm Hong Kong brands will play a crucial part. Palm Hong Kong is able to establish its broad leadership usually by acquiring other strong mobile computing companies and their products, which are then combined into a new, larger company (1989). Offering training to its employees, improving the company operations, and the introduction of new technologies then reinforces the positions of the various Palm Hong Kong products. This practically results in economies of scale that is able to create a distribution network for both the local and international Palm Hong Kong products. If a market is already in the control of other mobile computing companies, Palm Hong Kong devotes its attention towards the development of a premium segment with its various Palm Hong Kong products (1995).
The mission of Palm Hong Kong is to secure the growth of the business in a sustainable manner, while at the same time constantly improving the company’s profitability. The strategy to achieve this involves four elements:
B. Overview of the Industry
Gone are the days when employees work on their desks for eight hours a day. Today’s employees want to utilize their productivity tools and interact with different individuals and groups in different settings. The technological advancement in wireless technologies has allowed workers and employees to access communication tools in new settings.
Research from Cahners In-Stat/MDR revealed that there are more than 78 million remote and mobile workers in Hong Kong alone (2001). It also states that the provision of access to mobile business applications and wireless access to the Internet to the workers and employees will be key priorities for business. On the other hand, a study by Access Markets International (AMI) Partners Inc. predicts that more than half (67 million) of the Hong Kong domestic workforce will be mobile by 2006 (1997). This should create an enormous demand for wireless data/Internet solutions.
C. Overview of the Macro Environment
The four common political trends that have emanated in Hong Kong simply verified that the people in this country are aware of the possible benefits of the modernization of telecommunications and mobile computing. The overall economic outlook of the country suggests that they are ready to embrace the new technologies that could be possibly brought about by Palm Hong Kong.
RENEWAL OF STRATEGIC ENVIRONMENT (1995)
A. Product-Service Market
Beginning in 1995, Palm Hong Kong products started including smart-phones and handheld computers. These were equipped with a Personal Information Management (PIM) software and other note-taking applications (2001). A range of additional features including high resolution coloured screens and wireless capabilities ensured that there’s a Palm Hong Kong product designed to meet the needs of clients anywhere in the world.
B. Design Philosophy
Hand-held computers are different from a laptop. Palm Hong Kong products focus more on the management and access of information rather the creation and editing of documents. For this reason, Palm Hong Kong has developed a unique set of guiding principles – simplicity, wearability and mobility. Total commitment to these principles makes Palm products very user-friendly to its customers (2001).
C. Customers
A majority of Palm Hong Kong customers are professionals who rely on mobile gadgets and expect seamless handoffs every time they make calls. For instance, a customer phones in a service request from the Hong Kong airport while boarding a plane bound to Paris the same day. The technical people of Palm Hong Kong will immediately work on the service ticket of the client. And when that client arrives in Paris, he / she would be able to call the Palm Hong Kong service center and pick up exactly where he / she left off.
D. Competitors
Palm, Inc. is the world’s leading producer of hand-held computers. Interestingly enough, Palm, Inc. has an even larger share in the market for hand-held computer operating systems. Around eighty (80) percent of hand-held computers in the United States operate on a Palm operating system. Microsoft is the only major competitor with a share of sixteen (16) percent. The hardware market gives Palm, Inc. a market share of sixty (60) % (2002). Of the major competitors, Sony Corporation and Handspring are both using Palm’s operating system, and hold about 7% and 14% market shares respectively. Other competitors, such as Compaq and H-P, use Microsoft’s operating system, but both companies have below 10% market share. Palm, Inc. has had so much success in the consumer market, but the future goals include selling more products to corporations (2002).
RENEWAL OF GENERIC STRATEGY (2000)
Palm Hong Kong’s generic strategy in the mobile computing market changed for the better at the start of the new millennium and began pursuing product differentiation. True enough, the differentiated Palm Hong Kong products were able to satisfy the needs of customers through a sustainable competitive advantage. This allowed Palm Hong Kong desensitize the prices of their products and instead focused on the values that generated not only a comparatively higher price but also a better margin.
Figure 1. Porter’s Generic Strategies.
RENEWAL of BUSINESS STRATEGY (2001-2005)
At the start of the year 2001 up to the present, Palm Hong Kong has been making an effort to increase awareness of its various Mobile Workforce solutions. These are actually solutions for people who rely on carrying computers around as part of their jobs. The first part of this initiative revolves around the concept of sales in the mobile field.
The purpose of Palm Hong Kong in this effort is to show how they can help their customers and clients incorporate their Palm devices into their sales force automation strategy (1997).
The term automation of sales force may seem to imply that a person can automatically make sales, which is very far from the truth. More precisely, what the automation of sales force does is to automate the aspects of the processes involved in sales. Definitely, this would make it easier for the clients to keep track of the person to call, how and when to follow-up as well as the value of prospects.
Sales force automation is a good initiative to getting the difficult part away from these tasks. This would mean finding the appropriate software tools that would help the client organize his / her contacts and phone calls as well as remind him / her once in a while of meetings and missed calls. There have been existing solutions that enable sales professionals to track order history and status.
What is amazing is that some of the best sales personnel have been keeping on using paper DayTimers. True, they’re portable, but far less portable than Palm organizers. With these little Palm organizers, there’s no longer a need to bring along laptops or endlessly erase and write in paper planners.
There is no doubt that serious salespersons need a Palm device to help them to do their jobs efficiently. It’s so sleek that it can be slipped into a pocket or briefcase. Also, it can be easily carried anywhere and takes up little space that it can be easily hidden.
Therefore, the valuable information that sales people collect can now be synchronized with the pertinent information in the servers of companies. The organization will have access to important information about their customers and the sales staff in turn also will have access to the information that will help them sell easily.
A. Developing a New BUSINESS MODEL
The subscription business model has been widely used by Palm Hong Kong since the year 2001, but the application of this model has started to spread up to this time. Instead of selling the products directly, Palm Hong Kong nowadays is doing the process of selling their monthly or yearly access to mobile products and services. As a result, the company is able to convert a one-time sale of a product into a recurring sale of a service.
Effect on Palm Hong Kong
Palm Hong Kong benefits from this strategy because of the fact that they are guaranteed of a constant revenue stream. This significantly reduces the uncertainty and the risk-taking of Palm Hong Kong. Also, most of the time, the subscription pricing structure is carefully designed in order to make sure that the revenue stream from the recurring subscriptions could be significantly higher than the revenue coming from simple one-time purchases. In most subscription schemes, it also induces the increase of Palm Hong Kong’s sales through disallowing the subscriber’s option to either accept or reject any specific Palm product. This triggers the reduction of customer acquisition costs, and allows the implementation of a personalized marketing or database marketing (2002).
However, subscription business models also have their disadvantages. Palm Hong Kong still needs to invest to a large infrastructure in order to help in the management and monitoring of subscriptions.
Effect on the Palm Customers
Palm Hong Kong consumers also benefit greatly from this strategy. If they will buy Palm products regularly, then they will significantly benefit from the convenience. However, they will only have to make one particular Palm purchase decision, then they will just simply have to wait for the Palm product to arrive. This model will be of great help for those consumers who are in search for structure and constancy in their hectic lives.
BENEFITS OF RENEWED MARKETING STRATEGY
Because of Palm Hong Kong’s successful implementation of its marketing strategy, the following benefits were achieved over the years:
· Financial Stability
Financial stability is crucial especially in the pursuit of research and development activities. In the mobile computing industry, it is important to remain updated with the latest technological developments to be able to stay competitive in the market.
· Excellent Product Performance and Price
The designing of the best mobile products comes as a result of well-funded research and development activities. The strong performance of mobile products in the market could also be linked to their cost-effectiveness. However, the company has to be aware of the positioning in terms of process so as to maintain satisfactory profits margin and remain competitive in the market.
· Effective Distribution of Products
High brand awareness among the buyers has created the need for aggressive marketing, and access to strong distribution channels is critical for the introduction of new models (2001).
· Economies of Scale and Scope in manufacturing and research and development arising from its numerous facilities situated in Hong Kong and other countries worldwide.
· Unique Quality Technology
Palm Hong Kong’s commitment to research & development activities has always been one of its top strategies to remain competitive in the market.
· Differentiated Products
Through the production and marketing of differentiated products originating from their research and development activities, Palm Hong Kong is able to create its own firm-specific advantages. The continuous pursuit of research and development processes enables Palm Hong Kong to produce a steady stream of originally differentiated products which makes it difficult for competitors to find substitutes. Because of this differentiated approach, Palm Hong Kong is able to market their products worldwide, which enables them in turn to maximize the returns on research and development expenditures.
RECOMMENDATIONS
A tie-up or merger with various local telecommunications company offers tremendous benefits in terms of access to the company’s subscribers, infrastructure and even its resources. However, Palm Hong Kong must not lose sight of its core competencies while pursuing these tie-ups. Otherwise, the image of Palm Hong Kong might be put in jeopardy.
Meanwhile, the collaboration of Palm Hong Kong with its major competitors can be seen as a ridiculous move at first. However, upon close examination, this move could pave the way for Palm Hong Kong to increase even more its market shares and revenues (1993). The bottom line is both sides would be able significantly gain financially in such an alliance. Palm Hong Kong’s strengths in product development combined with the financial capabilities of either Compaq or Microsoft can transform them suddenly into an unbeatable force to reckon with. One possible setback, however, is the differences in the cultures of the companies involved. Another possible setback could be whether any of Palm Hong Kong’s competitors has the need to form alliances.
The third option also focuses on alliances, but this time with either one of the suppliers specializing in manufacturing of mobile products or the product’s operating system. The benefits of these alliances should outweigh the costs in the long run.
In terms of appropriateness, all three options are able to directly address the current issues mentioned. However, the question remains whether Palm Hong Kong could be able to implement any of these options, and whether these options can be acceptable to the key stakeholders. Any merger or alliances may also involve the sharing of expertise. Palm Hong Kong has traditionally relied on the inside-out approach. It is important to note that any merger transactions would have many implications on the company’s values and culture as well as the resources. The key stakeholders definitely would be concerned with such options and need to be convinced of the positive aspects. Somehow, Palm Hong Kong will be able to overcome this barrier in managing strategic changes in the process of implementing any of the above mentioned strategic options.
CONCLUSION
The results of the analysis carried out on the renewed development stages of Palm Hong Kong indicated very significant advantages for the company, even amidst the threats of economic unrest. Therefore, we could conclude that Palm Hong Kong could still be expected to grow faster than average because of its effective marketing strategy.
The review of Palm Hong Kong’s capabilities and resources revealed very little inconsistencies regarding the company’s strategies. This is coherent with Palm Hong Kong’s traditional inside-out approach. However, the need to reconcile both the inside-out and outside-in approaches becomes imperative now for Palm Hong Kong.
The analysis of the environment, strategy and capabilities of Palm Hong Kong revealed certain gaps, most of which are biased towards the environment. However, these gaps paved the way towards determining a number of recommended strategic options to secure Palm Hong Kong’s international competitiveness.
Also, Palm Hong Kong has to find a balance between adherence to internal forces within the company and to the changing forces of the environment in order to implement such strategic options.
Credit:ivythesis.typepad.com
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