TerraCog Global Positioning Systems:

Conflict and Communication on Project Aerial

Presented
Presented by
by Group
Group 88
Case Overview-
Situation Analysis

TerraCog company Birds I Project Aerial

Specializing in high quality Competitor Company President
Global Positioning System launched new takes decision to
& Fishing sonar product with static implement satellite
equipment. satellite imagery imagery into existing
2007 Entry into New GPS platform.
segment.

TerraCog underestimate
Successful Business : Time constraint,
new feature & after
Captive skill of translating Understanding of
multiple discussion prefer
retailers & customers requirements, Cost
not to react to competitor
feedback into superior implications, Individual
action due to major
product design & Strategy, Lack of
changes & uncertainity of
functionality. Leadership, Team efforts…
trend.

High on durability, Value Customers started To take go-no-go decision

added features, superior demanding imagery,
navigation, strong loyalty Competitor gaining market
based on WOM. share. Action must.
Causes of Dilemma-
Problem analysis

Weaknesses in the Decision

making process (Clues:
Developing the Aerial Product,
Project aerial,)
Problem Identification:
Conflicting departmental  Whether to proceed
objectives (Sales, Design and with existing product
Development, Production)
 If yes, at what price &
what will be the
Conflicting individual objectives consequences of selling
(Allen Roth, Ed Pryor, Emma
Richardson, Tony Barren, at higher/lower price.
Harold Whistler)  If no, what will be the
consequences.
Ineffective Group structure
(Design of the group structure,
real team, compelling direction)
People Involved
Causes of Dilemma-
Problem analysis
Weaknesses in the Decision making process
What went wrong
• Decision to develop new product
was cancelled many times by the
team. However, Fiero & Pryor
revised the decision without
consulting other team members &
even Richardson was not part of this
discussion.
• Fiero & Pryor also took the decision
to redesign existing model assuming
that it will cost less than developing
new product.
• Pryor also decided that speed will
not be a criteria for tech savvy
customers, without understanding
the implications of it.
• Project decision was not appreciated
by development team because of
prior commitment & insufficient
Way ahead
• Top leadership should take the
decision after through discussion
with all stakeholder. In this case
Fiero should call a meeting to explain
challenges faced by the company &
seek opinions.
• Clear guidelines & procedure should
be layed. Every department should
be responsible enough to take
decision pertaining to their areas
only.
• Parameters should be decided &
quantified as far as possible.
Decisions should be based on both
quantitative & Qualitative data.
• Leadership must ensure that there is
no strong objection , if full
agreement is not reached atleast
Causes of Dilemma-
Problem analysis

Conflicting departmental objectives

What went wrong Way ahead

• Sales department was delayed in • All teams must be aligned to
estimating BirdsI impact, resulting in common goal, company mission &
revenue loss. Their goal was to gain vision.
market share & sales, however they • Fiero & Richardson should play the
concluded that it can only be role of leaders & work towards
achieved through adding satellite achieving consensus.
imagery & not by new product line • Add more points!!!
which design was working on.
• Roth was working on his own
agenda.
• Richardson did not take complete
charge of the project & assumed that
Production will workout the costing
on its own.
• Fiero was more concerned about
board meeting & assumed that only
Aerial can ease out tension at Board
meeting.
Causes of Dilemma-
Problem analysis

Conflicting individual objectives

What went wrong Way ahead

• Unable to figure it out • Add more points!!!
Causes of Dilemma-
Problem analysis
Ineffective Group structure
What went wrong
• Interdepartmental communication
was the major problem.
• Standard procedure of Product
Development was not followed.
• Sales could not communicate their
actual/precise requirements to
Design. In initial meeting price/cost
was not at all discussed.
• Design did not communicate lack of
time as major constraint. Roth &
Whistler could not explain the
impact of Project Aerial on existing
projects.
• Production department was involved
at the last stage of development
cycle.
Way ahead
• Cross sectional team should be
formed in the beginning of Project
Aerial. This could have improved
communication between all
departments.
• Product development processes
should be benchmarked and
standardized.
• Design should translate Sales
requirement into quantitative data.
Based on this product cost could be
estimated & reengineering could be
done.
• For project Aerial, reengineering or
benchmarking of BirdsI should be
done to understand cost structure.
 Decision Analysis- Options & implications

Go to Market with 475/- price.

Results:
No takers – Out of market- High
probability.
Low sale- Out of Market &
damage to reputation for
launching such product- High
probability.
High Acceptance because of
Brand name- Low probability.

Cancel the launch, proceed with

Go to Market while taking new category & workout cost by
a hit on cost & Margin. reverse engineering (& adding
Results: value) BirdsI product.
Revenue Loss- Not accepted Results:
by Board. Continued loss of sales in GPS
Difficult to sustain but can segment.
result in market leadership Another failed product tag on
& can provide time to Tony.
reconfigure the product
Failure for Richardson & rest of the
cost.
team.
Incremental losses.
No damage to reputation. Team
can come up with next generation
product.
Plan of Action

Cancel the Product Launch, do test marketing & redesign new

product

• By test launching existing product in select market, Company can gain deep
insight into customer expectation. This understanding can be incorporated
in new product development.
• Launching costly product when market is highly competitive will not be a
good idea.
• This will temperorly ease of burden from sales & provide time to come up
with next generation gadget.
• PLEASE ADD MORE POINTS!!